It is generally
believed that new technology not only makes older technologies inefficient and
inappropriate but also makes whole product lines obsolete. There have been many
case studies of products that have become obsolete by the sheer march of
technology. Mechanical watches by quartz watches, ink jet printers by laser jet
printers, fountain pens by ball point pens, hand telephones, calculators,
cameras and navigation systems, all by cellular phones, physical publishing by
digital publishing, corner bookstore by online bookstore, telex by fax, mail
and fax by Internet, and so on. Almost all of these have been driven by
revolutions in electronics, telecommunications and software technologies. If
such changes have not been more universal (for example, X Ray not getting edged
out still by CT Scan), the costs alone could be the deterrent.
The upcoming
Apple Watch is another perfect example of a disruptive technology in wearable
computers that could change the way smartphones and health devices are
positioned in future. Interestingly, this technological trend may not leave
even very traditional and mature products such as automobiles untouched. The fascinating point in all this
technological revolution and product obsolescence is that the basic needs that
were fulfilled by the earlier generation products continued to be required.
Things like timekeeping, printing, writing, voice communication, photography, navigation,
book reading, mail communication, other non-voice communication, and medical
diagnosis are still required. Technology’s ability to converge more
applications into one device or one medium has contributed to this
transformation.
Technological resurgence
Established
technologies, and hence established products, may be overtaken by newer ones;
however, nothing prevents them from staging a comeback. The case of Seiko
Epson, the famous Japanese printer group is a case in point. The company, under
the stewardship of Minoru Usui san, took a bold step in 2006 to refocus on ink
jet printers despite the likely advent of a paperless digital office. Not only
did he focus on ink jet printers, in preference to laser printers that are
considered to be technically superior, but also shifted focus from consumer
markets to business markets. This has been made possible by a technological
stride in print head technology patented by Seiko Epson that enabled high
accuracy in firing the ink droplets and thus securing higher print quality.
This was also accompanied by a different bundling strategy for the marketplace
that enabled his high cost printers featuring big tanks accept cheaper inks
from any brand.
Similar
technological resurgence has been behind the Swiss watch industry, which
recovered from the shock of piezoelectric quartz watch technology by a refocus
on its precision design and manufacturing capability on one hand and by
integrating multiple drive options from mechanical to quartz to light powered
and radio powered movements in watch design and manufacture. This was also
accompanied by redesign of watches to appeal to customers belonging to
different demographics and professions, including youngsters, students,
sportsmen, professionals and seniors. There has also been a very successful
effort to position watch as a luxury product, with an additional ornamental
value for the ladies watches. The case of the fountain pen is also one of
similar comeback, from a mass writing instrument to one which is rendered
obsolete by ballpoint pen and which finally staged as a gallant comeback as a
luxury writing instrument.
Basic needs
It is important
to recognize that technologies may come and go but the basic objectives of all
technological developments would be to fulfil certain basic needs in an ever
better fashion.
As long as
writing exists, the need for writing instrument exists. Many thought that
personal computers have rendered typewriters irrelevant, and along with
traditional typists. True, but typing itself has never gone out of need; in
fact, typing has become a universally required skill and physical keys of a
typewriter got replaced by a computer keyboard, followed by a BlackBerry
keyboard, now followed by a virtual keyboard. The same type of product
reinvention cycle can be seen across products. At the core of such renewal lies
the relevance of technology in enhancing user experience even for basic
established needs.
Successful
technological resurgence would depend on multiple factors: the scope for the
old generation technology to be upgraded, the opportunity to extract
incremental value from the technology, the costs and benefits of breakthrough
innovation vis-à-vis incremental innovation, the potential to integrate
supportive technologies, the ability to re-segment the markets based on new
technologies and products, the possibility to reposition and rebrand through
‘retro’ features, the adaptive nature relative to the Internet technologies,
and so on. Not all later stage technology would result in more expensive products.
For example, Swatch watch used inexpensive quartz technology to provide to
youngsters inexpensive watches as fashion accessories. It is important,
therefore, not to discard any product or banish legacy technology simply
because a new technology has arrived.
Market redefinition
The key to re-emergence
of legacy technologies for renewing products lies in the ability to redefine
markets. It also requires redefining competition. The relevant case is that of
fountain pens. The industry possibly sold several hundred million units each
year in the 1950s but by the 1970s the annual sales dwindled to a few million
units due to the advent of the ballpoint pen. Today, possibly in unit volumes
the same level is being maintained but in dollar value the turnover of the
industry multiplied – the reason being that the fountain pens are now being
marketed not as utilitarian writing instruments but as nostalgic luxury
accessories. It is not that technology was passive in this process; from finely
honed gold nibs to lacquer finish cases, new technology did give luxury touch
to the renewed fountain pen drive. As a
result, fountain pens and ballpoint pens now operate in two distinct market
segments. The same could happen to radios and record players.
The case of Seiko
Epson also demonstrates how technological resurgence gives confidence to
redefine markets. Given the lower print quality and lower price point relative
to laser printers, ink jet printers were ideally positioned for the cost
conscious consumer markets and the laser printers for the office market. However,
on the back of energy efficiency and comparable print quality, Seiko Epson
could do the contrary market positioning for its new series of ink jet printers
focusing more on business users successfully. The likely future market
definitions could be even more disruptive; from simple definition on the basis
of a spectrum between mass consumption and luxury use, future products would
have very novel redefinitions. For example, shoes in the past moved from being
classified as business and casual shoes to application oriented shoes (running,
jogging etc.). Tomorrow, if a smart chip can be embedded in the sole of a shoe,
shoes may get stratified into health shoes and routine shoes!
Human factor
The temptation
to discard legacy technologies could be easy to fall for executives and
companies but the grit to re-develop and re-deploy legacy technologies requires
strong human faculty. Fundamentally, it starts with the resolution of the apex
business and function leaders to preserve the institutionalized value of
technologies until the time comes to merge new technologies. This also requires
preserving the technicians and workforce that grew with and lived in/with the
legacy technology. There is an interesting anecdote on this. When Zenith, a
Swiss watchmaker was buffeted by the quartz onslaught, it like many Swiss
mechanical watchmakers decided to discard all its production tools, including
critical molds and dies. However, a veteran employee who could not stand the
idea of scrapping all the historical production tools hid them in a shed in the
factory. When, years later, the
mechanical watch industry made a comeback and Zenith was at its wit’s end as to
how to participate in the revival, the veteran employee returned to disclose
the hidden treasures of historical tools and drawings, and led Zenith’s foray
into mechanical watches.
There is a
practical and compassionate element to the human factor too. It is easy to lay
off people but difficult to retrain people. Companies which invest the time and
effort to retrain people would combine the benefits of legacy knowledge and
futuristic technology. Seiko Epson, for example, decided to retrain and
redeploy its people on newer product lines. This, of course, requires not only
a compassionately practical management but also a mature employee base which is
not plagued by insecurity but is willing to learn new technologies as eager
students with a faith in future. The third important factor is to focus on the customer
as not merely as a user but more importantly as a human being who needs to be
provided a better quality of life. The new slew of products, particularly the
ones on the anvil, such as smart phone linked health watches are nothing but
the stethoscopes, pedometers, electroencephalographs and diagnostic algorithms,
all rolled into one.
When the customer is pampered and enthused as a human being, just
with satisfaction of basic needs with resurgent technologies and renewed
products, past tends to be future-perfect and legacy promises to be future-creative!
Posted by Dr CB
Rao on March 21, 2015
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