Wednesday, November 27, 2013

Without a Crystal Ball



Considering Clayton Christensen’s introduction to The Innovator’s Dilemma and our conversation in class last week on organizational coherence, it seems that a key challenge as we begin to  shift from analysis to strategy development is how to leverage the power of hindsight while simultaneously acknowledging its limitations. In “The Coherence Premium,” Leinwand and Mainardi use Pfizer as a case study of capability coherence, citing the company’s decision to focus on demonstrable health benefits (via claim-based marketing) and subsequent tailoring of its products  toward this end (e.g. selling its confectionary line) as vital to its success. On the flip side, Christensen discusses the fall of Sears from retail giant to flailing merchandiser, noting the company’s failure to harness disruptive technology (namely online retailing) as central to its demise. But it is far easier to look backward and analyze trends among those organizations that have succeed and those that have failed then to look ahead and accurately predict the future. As Rick Lester, the late CEO of TRG Arts reminds, "Data is nothing more than a rearview mirror, and what's in that rearview mirror is limited by the decisions that we've made. It can only predict the re-occurrence of things that have already happened."

So how do we shift our thinking forward to imagine the unknown and how best to anticipate it? How do we take the plunge using what we know from the past and the present to craft a sound strategy for the future? And in particular, when we identify disruptive technology in the marketplace, how do we best react, not able to know exactly the path that disruption will carve?

In an attempt to better understand the concept of disruptive technology, I began to think of the industries my professional experience has touched upon—digital printing, on-demand publishing, simulcasts, digital streaming. All of these have interrupted the “content delivery methods” standard to creative industries, be they corporate or nonprofit, artistic, entertainment, or educational. In his New York Times article on the future of the media industry, Eric Pfanner writes, “Predicting the outcome of a revolution is a fool’s game.” But he argues that at this moment, we do know certain things based on the technological developments that have rocked the media industry, namely that “the convergence of digital media and technology will accelerate.” Given that prediction, Pfanner argues that a chain of other developments are likely to occur, from globalization of the media business to advances in translation services. For today’s strategist, the question then becomes how to steer a media enterprise?

Developing a strategy to successfully harness such disruptive technology, needless to say, is difficult. Christensen warns, “If good management practice drives the failure of successful firms faced with disruptive technological change, then the usual answers to companies’ problems—planning better, working harder, becoming more customer-driven, and taking a longer-term perspective—all exacerbate the problem,” (10).  So what is a manager to do? This dilemma is, of course, the subject of his book. But perhaps the greater struggle for those new to the subject is reconciling the fact that we won’t know which of the strategies devised today are in fact “right” until the future arrives.


Sources:

Christensen, Clayton M. “Introduction: Why Good Companies Fail to Thrive in Fast-Moving Industries,” The Innovator’s Dilemma, 2006.

Leinwand, Paul and Cesare Mainardi. “The Coherence Premium,” Harvard Business Review, June 2010.

Pfanner, Eric. “Peering Into the Future of Media,” The New York Times, October 14, 2013. http://www.nytimes.com/2013/10/15/business/media/peering-into-the-future-of-media.html?_r=0

Schouten, Katherine. “The Age of Big Data,” Arts Management and Technology Laboratory, December 18, 2012. http://amt-lab.org/dialogues/2012/12/the-age-of-big-data
 

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