New York Business Consultants LLC

Disruptive Technologies - DON'T FOCUS! 

In a globalized world be open for opportunities!

By Malko Ebers, Feb 10th 2014 - New York City

In our 'uber-rational' world we underestimate with timelines, deadlines, balanced scorecards and management by objectives we very much underestimate trial and error and luck in business.

You can have as many focus groups and do as much market research as you want weather your new cereal bar, slogan or car name will be accepted and successful is hard to say and you have to experiment, try and improve through continuous improvements and an efficient feedback mechanism. This is what Kaizen, the Japanese management practice means: Continuous improvements. 

You might say this is probably true for the high tech industry, where drastic improvements in technology are the norm? Wrong, actually the food industry is the most innovative one and one of the toughest to predict product success. You just have to throw an innovation at the market and listen very carefully to the customer's response. If you focus too early you will not receive necessary feedback and opportunities to learn and improve.

One might say business is like fishing - you focus on fish as a category not a single one. When a customer catches your bait, when what you offer is attractive and they show interest then you focus your attention. The metaphor is useful because it shows that we have to be patient and diligent when it comes to innovation and where and how to focus our attention in business. 

As teenagers we have probably all been told to focus by parents, supervisors, teachers, colleagues. Because others want to figure us out, want to put us in a category they can comprehend. What do you want to do, what is your specialty? In a market environment where jobs, technologies and consumer demand changes constantly it makes sense to be able to wear many hats, to have various product and service options that meet customer demand. A lot of innovation doesn't originate in organizations but by the customer himself. This so called lead user innovation (Eric von Hippel, MIT) is something that more companies should appreciate and capitalize on. Only when the leadership of an organization encourages this open attitude and doesn't focus too early an organization can comprehend these innovations at the fringes of their attention span.

Of course 'focus', division of labor and very specific job descriptions and roles are the very essence of the traditional organization this leads to high efficiency, economies of scale, specialization and greater output. Since Adam Smith and later Henry Ford's production system this is no secret and these principles work very well. However companies build around these central paradigms for example 'copies/minute' (Xerox) very often miss disruptive innovations in the market that can challenge or destroy their market. Leica dominated the camera market but missed the digital revolution, Xerox was synonym with making copies but missed small mobile printers and Nokia dominated the cell phone market and missed the smartphone revolution. All because these huge, powerful companies focused and optimized so tightly that they became huge bureaucracies, efficient and standardized but not open minded and innovative enough. Small competitors could operate below the radar of the large organizations and their innovations finally challenged and often destroyed a market to replace established paradigms.