Technology can be defined as the process by which an organization
transforms labor, capital, materials and information into products and services
of greater value. And Innovation is a change to the technologies.
Although companies can fail for many reasons like poor planning, bureaucracy, inadequate
skills etc. Bur for a company that has been a pioneer in the market to fail, it
takes a series of bad decisions made by a good leadership.
The book, “The Innovator’s Dilemma” highlights a couple of important elements of a failure framework –
The book, “The Innovator’s Dilemma” highlights a couple of important elements of a failure framework –
1.
Sustaining vs Disruptive technologies:
Sustaining means improving upon a well-established
technology and Disruptive means innovations that result in worse product
performance in the near term. Although disruptive technologies underperform,
they have features that a group of customers value.
2.
Trajectory of Market Need vs Technology Improvement:
This happens when suppliers give the
customers more than what they ask for. They often overshoot their markets. Consequently,
the progress precedes the market’s awareness of the need.
3.
Disruptive Technologies vs Rational
Investments:
This focuses on the fact that any company’s decision to aggressively invest in disruptive technologies is not always rational. This is because the products in such a case are cheaper and do not fetch great profits and they have to be initially launched into insignificant markets.
This focuses on the fact that any company’s decision to aggressively invest in disruptive technologies is not always rational. This is because the products in such a case are cheaper and do not fetch great profits and they have to be initially launched into insignificant markets.
With sustaining technologies, plans can be made well in advance.
On the other hand, with disruptive technologies, actions have to be taken prior
to making any plans because these plans act as a means of implementation. And
if something goes wrong, it becomes fatal for any company. Companies tackle
this situation by making use of “Agnostic Marketing” that is based on the
assumption that neither the company, nor the customer can predict the hows,
whats and whys of a disruptive product.
Contrastingly, not everyone feels disruption is destructive.
They feel that they have to bold to spot market transitions correctly. “When
you are a large company with significant market share, it’s tempting to view
market disruptions as a threat. But we view them as opportunities”, John
Chambers, CEO, Cisco Systems Inc.
If the managers can understand and harness the forces of disruptive
technology storm, they can succeed spectacularly when confronted by it. In
order to tackle the stormy circumstances, managers can use the following
principles:
1.
Companies depend on Customers and Investors for
Resources:
The managers do not control the flow of the
company, the customers and investors do.
2.
Small Markets don’t solve the growth needs of
Large Companies
3.
Markets that don’t exist can’t be analyzed
4.
An organization’s capabilities define its disabilities
5.
Technology supply may not equal market demand
In conclusion, it can be stated that at a deeper level, many
of the widely accepted principles of good management, like “Customer is God” are,
in fact, only situationally appropriate. It is up to the managers to judge when
to apply the widely accepted principles and when to follow the alternative
principles as highlighted above.
References:
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