In today’s competitive marketplace what differentiates the consistent players from those who rise and fall is the ability to successfully explore the technological waters, forecast and identify landmark technologies, and then align technology and corporate strategy.
But why is it that most business leaders fail to recognise the opportunities that new technologies give birth to?
To get to the root of the problem one has to understand that the way businesses are structured and operate are inadequate to deal with the challenges of the contemporary technological landscape.
Business leaders think in terms of the constructs that they know — marketing, finance, operations and human resources. But these paradigms are almost a century old and they were put in place at a time when technological change was not the reality that it now is.
Within these limited paradigms, the chief concern of most businesses is cash flow and short-term profits. They are mostly skilled at understanding their markets and products and most think strategically about how to grow either by finding new markets or finding new products. This has been standard practice for several decades but is now rapidly becoming inadequate as technology has become such an integral part of consistent success in a competitive marketplace.
This means that there is a need for a new approach. Companies need to integrate science and technology into product and operations thinking. They need to understand the underlying currents of technology and how they can take advantage of these. It’s not just about strategising around the current status of the business, it’s about looking beyond. It’s about bringing the future revenue curve into focus.
There are a few examples in recent history of businesses that have leaped ahead of the pack because they were able to identify new technologies and harness them to gain a competitive advantage. Airbus is now the leading aircraft manufacturer — largely because of its technological innovations such as the use of fibre-optic cables to carry information safely at low fuel levels. This ensures that their aeroplanes have a longer range than their key competitors.
In our technology-driven era, there is no shortage of emerging technologies — the latest research and development into nanocrystals, for example, is yielding results with a number of potential applications. But this research, like other areas of scientific research, is undertaken in relative isolation with no applications in mind. What is needed is creative and entrepreneurial minds to spot the potential that scientific developments yield and apply these strategically in business.
And yet for most businesses the truism is that technology hits them on the side of the head, but never between the eyes. This zero visibility is induced not only by the lack of mechanisms to deal with technology but also by a fear of the unknown.
For most people — both in business and outside of it — technology is an overwhelming force. It has no shape and no form. It is threatening. But it does not need to be this way. It is possible to tame technology and to make it work for one rather than against one.
The secret to understanding and managing technology is to codify it. In the same way that wine tasters have an entire language and series of categories to understand and explain the taste of wine — which may be incomprehensible to the uninitiated — so can business leaders use categories and a language to understand and explain technology. And the means to do this already exists as research to understand technology has come a long way. The moment companies see technology in a coherent way, it’s like flipping a light switch and seeing a whole new world of possibilities.
The beauty of such a system is that you don’t have to be an engineer or a scientist to understand it. All technology can be broken down into just three main categories: matter (M), energy (E) and information (I) — known as the MEI distinction. These are the fundamentals underpinning all technology and can be further subdivided into three sub-categories — processing, transportation and storage — making just nine categories in total. Immediately this simplifies the technology landscape making it easier for anybody to grasp.
The human mind grasps pattern and structure — what the MEI distinction does is to enable business leaders to view technology as a coherent totality. The MEI distinction helps people to see key trends and draw the big picture of the technological landscape. Furthermore, it enables them to recognise clusters of technologies that offer unique opportunities that could potentially be translated into business success.
The system also provides people with the language to explain technology and hence to sell their ideas more effectively — both to their companies and to their customers.
But despite the obvious advantages of technology foresight, very few companies have made space for such a category within the confines of their traditional ways of doing business. Where such a function exists it is often delegated to middle management. The reality is that strategic technological thinking should be a priority in all companies. Both CEOs and company boards should have this as a core part of their functions.
And while the rewards for harnessing the power of technology are great the opposite is also true. The consequences for businesses that choose to stay in the dark where technology is concerned could be fatal.
Professor Rias J van Wyk is a consultant in strategic technology analysis, author of the pioneering text Technology: A Unifying Code and a visiting professor at the University of Cape Town Graduate School of Business where he will present a seminar on managing technology in February. For more information contact Anine Geel on Tel: (021) 406 1314.