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Acknowledgements
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.
CB Rao
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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).
Technological behaviour
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.
Never perfect
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.
Near perfect
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.
Retrospectively
prospective
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
1 comment:
One other determinant of technology behaviour is the entrenched expertise of technology leadership - which feels comfortable recruiting more of its 'own' stereotype rather than adding innovators or skill sets of a different kind. The time lag in assimilating an innovative feature from a rival is partly the reluctance to follow the leader of that feature as mentioned in the blog, but equally convincing the human resource management leaders in the firm of the need to take on board new members familiar with the innovative technologies lacking within. Such new additions may be 'poached' from rivals in some cases, which again involves considerable time and effort. It should be interesting to study cross-migration of techies between competitors.
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