Monday, June 4, 2007

The Yin and Yang of Technology Change

A prime responsibility of a CTO is to continually monitor new technologies and assess their potential to: 1.) become new business opportunities or 2.) become new business problems. More times than not the two potentials are not mutually exclusive, in which case the new technology is commonly referred to as a 'disruptive technology'. If the famous author of the Tao De Ching, Lao Tsu, was a alive and working as a CTO today he might say:

Disruptive Technology does not overtly display itself, so is clearly seen,
Does not justify itself, so is recognized,
Does not boast, so is credited,
Does not pride itself, so endures,
Does not contend, so none contend against it

Disruptive Technology Happens. The light bulb wasn't invented by the candle industry as a new improved product, it was a serious and sudden business problem for the candle industry. Owners of established technologies, like the candle makers back then, tend to focus on making incremental improvements to their product technology, avoiding potential threats to their own businesses by competition. But as our fictitious Lao Tsu says Disruptive Technology does not content, so none contend against it, Disruptive Technology Happens. Disruptive technologies not only create new industries but eventually change the world.

Clayton Christensen, a professor of business administration
at the Harvard Business School, introduced the principles of disruptive innovation in his book, The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail (1997). The book helped managers understand how an organization that does everything right—listens to customers, keeps a close eye on the competitors, and invests heavily in technological advancements—may lead itself down a road to failure.

Being too 'customer intimate' can blind your organization to the undercurrents of a disruptive technology. Businesses must be 'customer intimate' but not at the expense of losing touch with the trends of the larger prospect market, don't be a candle maker that launches a new improved product line in response to the light bulb. Your customers have expectations that have been tempered by their relationship with you. A symbiotic relationship with your customers can be profitable but it doesn't shield you from the Darwinian Natural Selection market forces that favor evolution over stasis. Your prospects expectations are constantly mutating and are selected by the environment in which they live. A prospect's environment is not controlled like yours, it is wild and open to new disruptive technologies. So you must continually question your product's viability in the changing environment, how you can adapt to survive, you have to 'Think Outside the Box' you may have created for yourself.

'Thinking Outside the Box' was coined by consultants in the 1970s and 1980s who tried to make their prospective clients feel inferior by presenting them with the "nine dots" puzzle.

The challenge is to connect the dots by drawing four straight, continuous lines, and never lifting the pencil from the paper. The puzzle is easily solved, but only if you draw the lines outside of the confines of the square area defined by the nine dots themselves. Thus, the phrase "thinking outside the box" was born.

'Thinking Outside the Box' should be a liberating excersise, nothing is sacred and breaking the rules is healthy.

I work in the media industry. The company I work for produces both software and expert content (news, analysis, information) for professionals. We are basically a newspaper like the Wall Street Journal and we have lots of reporters covering the daily activities of the Federal, State and local Governments.

When we think outside the box, we see alot of potential but we also see some disruptive trends and technologies that we must address. As an example, we see 2 disruptive technologies operating in one of the markets we serve, the Tax and Accounting market, they are:
  1. Increased focus on training, it is a top priority for all firms.

    Graying of the work force
    75% of the workforce will be eligible for retirement in the next 10 years, the new workforce has very different expectations for information and training delivery.

    Talent War
    Firms are in a talent war making recruiting, staff retention, on-boarding, knowledge transfer and succession planning a top priority.
  2. Mobility is one of the most important and dramatic ‘mega trends’ in modern history changing the markets expectations on how and when they get their information and training.

These are disruptive technologies and trends that require a response. I put together a business case for a new product offering to address these disruptive technologies and underline the problems they presented for our company. In this presentation I included the following bullet point:

  • What we found makes us believe that at this time the product offering may be required to remain competitive.

I won't go into the details of the poduct offering, my intent here is to underline a prime responsibility of a CTO which is the topic of this entry. To understand technology trends, understand the market, understand the sign posts, and communicate the road map. Sometimes this means you have to put forward a business case for a new product or an investment in a current product. One last important note, when you do put that business case together, make sure you shoot the puck to where the market is going to be when you ship, and not where it is now.

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