This is my 300th post in my Blog “Strategy Musings” which is dedicated to my essays on various aspects of strategy and policy. I am grateful to my revered God Almighty, Sri Venkateswara Swami Varu for gifting me the capability to think and express myself as creatively and as consistently as possible in pursuance of my passion for sustainable growth with equity.
This blog post on technology is dedicated to the extraordinary scientists and technologists whose innovative, experimental and practical capabilities transform human life.
Consumer facing industries sparkle with a continuous flow of new products, to retain consumer loyalty. The mobile phone industry is a witness to such a continuous product flow. More manufacturers are in fray with more products than ever in the marketplace. More importantly, industry level competition is commoditizing technologies as never before forcing innovative firms to keep coming up with innovative breakthroughs periodically. In one sense, all major manufacturers tend to be pioneers, viewed of course in a liberal thought perspective, even if they are followers of an innovation introduced by someone else. By offering incremental value even on known formats, a pioneering development can be accomplished. The smartphone industry offers an excellent canvas to study and test several of the concepts. This blog post will focus on the behaviour of technology in the hands of firms, called technological behaviour, for the purposes of this paper.
Developing large screen phones has been a Samsung innovation (Galaxy series) but soon LG developed similar phones with a few pioneering features, including the thinnest bezel structure (G3). Apple followed with a pioneering departure from its small screen format but bringing its famous all glass structure for its large screen phones (iPhone 6 and 6 Plus). Sony brought in a different concept of dust and water resistance (Z series). Samsung developed an even larger and stylus based Note phone series and stayed on as a pioneer for a long time in that segment. It improved the Note by bringing for the first time an edge display (Note 4 Edge). Again, it has improved the edge concept further with a dual edge concept that has just been introduced through the mainline Galaxy series (S6 and S6 Edge). In the camera department again, innovations in pixel density, image stabilization and low-light imaging continue to take place (various models).
Like different human beings are considered to behave differently based on individual differences in genetic dispositions, family upbringing and institutional environment, technology can also be interpreted to exhibit its own distinctive behaviour based on the fundamental foundations of innovation of a firm and the way technological innovation is nurtured by successive generations of a firm’s leadership, in an overall competitive industry landscape. For example, Sony has its fundamental roots in the depth of its electronics technology. It is this capability that still vests in Sony a leadership position in consumer and industrial electronics despite the buffeting of business strategies by own lags as well as competitor leads. This is evidenced by continuing innovations in Playstation, camera sensors, robotics, and in special design elements of its products and robotics. Bose is another example of how the fundamental foundations of acoustic purity have consistently driven new product developments.
Technological behaviour can be defined in terms of hardware specifications, operating system, experiential novelty, market timeliness and user affordability as a holistic paradigm. Hardware specifications define the core performance of a product while the operating system (OS) defines the ultimate product performance. The OS not only integrates the hardware of a product but also integrates the product, user and the environment in a unique way. Experiential novelty defines how the product delivers an experience in a fashion that is hitherto unexperienced. Market timeliness occurs when a product is introduced in such a way that it leads to a transformation in how the activities are performed. Finally, user affordability reflects the ultimate relevance of the product to generate value for the user in return to the price paid. It also means to the firm the returns provided by the product for all the costs and expenses incurred by the firm in developing, manufacturing and delivering the product to the customer.
As with everything, product perfection is the ultimate goal of a competitive firm. This, in turn, requires perfect technological behaviour. Unfortunately, however, neither product perfection nor its driver, the perfect technological behaviour, are rarely achieved in an optimal fashion in the first occurrence, even for a virtuous firm. Reverting to the smartphone example, Apple despite its design and OS elegance could not master the large screen approach of Samsung or the high pixel and image stabilization camera technologies of Nokia. Similarly, Samsung could not go beyond the plastic body technology and could introduce a superior body only in the most recent sixth iteration of its Galaxy series. Despite its being a consistent follower, rather than a leader ever, LG scored its own victories with the thinnest bezel design ever (G3) and curved phones (Flex). Even the visible and successful accomplishments of competitors do not seem to alter the technological behaviour of firms beyond a point.
Even though Apple recognized the inevitability of larger screen phones and introduced iPhone 6 and iPhone 6 Plus, the firm failed to develop and offer the superior bezel technology of LG, higher camera technology of Nokia or unique dust and water resistance of Sony even in the latest product offerings. There exist two interpretations for this apparent lacuna. The first is that firms find it difficult to acknowledge and appreciate the superior behaviour of competitors, and consequently delay a responsive behaviour as long as possible. The second is that certain firms, foundationally, tend to be prone only to certain technological behaviours. The examples cited above illustrate the twin features of technological behaviour that makes products stay less than perfect, even at the hands of big firms. Even when perfect technological behaviour could be well within reach from a pure technology point of view, certain managerial aspects of technological behaviour relating to timeliness and affordability may influence a less than perfect approach.
The firm’s own fundamental technological propensities and its leadership’s own strategic dispositions influence the technological behaviour, and therefore cause the product attributes of their firms to be less than perfect. One may wonder that if perfection is impossible even for a Sony or Apple, what would be the chance for smaller firms. Perfection is not a function of scale; it is a behavioural mind-set. Big or small firms can certainly achieve at least a state of near perfection. Near perfection is achieved when a firm seeks near perfection on each of the five dimensions of hardware, software, novelty, timeliness and affordability discussed earlier. It would not suffice to be a leader on some and laggards on others. Interestingly, near perfection in technological behaviour turns out to be a conflict, if not clash, between the technology leadership and management leadership that a firm desires to have. Technology leadership drives the hardware, software and novelty components while management leadership drives the timeliness and affordability components.
In one important sense, technology and management leadership components should have a balance for a firm to achieve near perfection. The balance would be unique to each firm. The balance would be within the respective technological and management components as well; for example between hardware excellence and software perfection or between both of these together on one hand and novelty on the other. Similarly, a balance would need to be struck between timeliness to the market and affordability to the user. This brings us to the second principle of near perfection, that a fine balance within all the five components is essential. Integrating the discussion so far, it is clear that near perfection does not happen by accident; it happens by achieving near perfection on each of the five dimensions on one hand and striking a fine balance among the technology and management components, intra and inter.
Firms in the business of technology intensive products have a challenge. While planning technological innovation and product development, current plans and execution for the future would look appropriate, in some cases more than appropriate. Yet, once the competitive landscape is played out fully, the deficiencies become patent. It would appear that in retrospect technological behaviour of firms is found to be never perfect. This inherent feature of technological behaviour of firms is contrarian to the need to develop technologically and commercially competitive products of perfection. This deficiency seems to hurt even technologically and commercially giant-scale firms. This blog post proposes a simple prescription. The prescription requires the firms to modify their technical behaviour in an insightful manner to be able to review future products in retrospect even while staying at the current point of time so that the final product development is future-perfect!
Firms must, prior to launching the development of any product, imagine and conceptualize the competitive landscape at the time of actual product launch. Appropriate technical behaviour would eschew firm-specific biases and habits; instead, a genuine effort would be made to understand the limits to which each component of the firm’s technical behaviour can be stretched. It would also be necessary to assess the capabilities of the firm and its competitors to incorporate the perfect or near-perfect dimensions in product development. Once this analysis is completed, the product specifications would need to be frozen. That would not be the end of the exercise. The real test for the firm would be in terms of taking a leap into the prospective future and assess the planned product profile in retrospect, and evaluate its status on the perfection scale. The more a technology and product is planned in a prospective future but evaluated in a virtual retrospect from the intended date of launch, and further improvements effected, the more effective would be the journey of perfection!
Posted by Dr CB Rao on March 30, 2015