One of our MBA students raised a central question during my MBA class last week regarding the concepts of N=1 and R=G. His question was: Professor, does N=1 and R=G (Global) mean outsourcing to the Far East? My immediate response was an appreciation for raising this important question. My answer, though, was no, not necessarily. Still, I understand that the word "global" can be misleading in the current environment.

Let us take the example of a growing, privately-held business called Zazzle. This is a U.S.-based firm that allows customers to personalize a variety of products -- everything from T-shirts, blankets, and aprons to dinner plates, posters, postage stamps, coffee mugs, and buttons!

Zazzle provides a unique personalized experience for each customer to participate in the design of his or her product (i.e. "co-create," in the manner of N=1). It fulfills customer requests through partnerships with a number of local suppliers. The company also creates a platform for customers to sell their unique designs in a market.

Zazzle’s vast collection of digital images comes from content partners such as The Walt Disney Company and The Library of Congress, as well as leading individual artists and creative consumers worldwide. This is also R=G at the individual, customer level. Zazzle is leveraging the talent in individual customers.

So you can see why Zazzle's business model is different from some traditional business models in this domain, where firms usually make bulk purchases of mugs or T-shirts from offshore locations to leverage scale economies and cost benefits. Zazzle's business model is not much about outsourcing to the Ear East. It is the emergence of a new business model that enables co-creation with customers and leverages resources globally (as in the case of Zazzle, individual customers and a number of partners). "Wonderful experience. Best quality products and fastest delivery around!!! Keep up the great work!" says one customer in the company's customer testimonials.

Our thesis in the book is about this business-model transformation that is powered by digitization and appreciated by empowered customers. It is not a surprise that Zazzle is backed, financially and intellectually, by some of the initial promoters of Google. (Don't we often wonder how we lived without Google ten years back?) However, the focus should not be on the question, Is Zazzle our next Google? Our point is not about the success or failure of specific models, as that will depend on the execution. Our point in the book is that the manifestation of this change to N=1 and R-G is seen everywhere.

To come back to the original question: The power of digitization and imagination is enabling this evolution of new business models; it is NOT about myopic cost-based argument for outsourcing to the Far East. It is about building clarity on what N=1 and R=G mean for my business. Managers need to build internal capabilities in their business processes through social and IT architectures to progress in this new age of innovation.