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Disruptive technology: Dead companies do tell tales

Thornton May | Nov. 21, 2014
Companies nearly always have plenty of time to properly address disruptive technology. So why do so many fail to do so?

blockbuster store closing
Credit: Rept0n1x via Wikimedia, Creative Commons Attribution-Share Alike 3.0 Unported license

Blockbuster. Nokia. Kodak. Most businesspeople know what they have in common. They are all companies whose footsteps you don't want to follow.

They were all market leaders that fell prey to disruptive technology. How can your company avoid that fate? I've been exploring that question, having taken as my topic for a recent conference the historical lessons that can be learned by organizations that failed to respond appropriately to technology disruption of their core businesses. I read a great deal about disruptive technology and enterprises that have collapsed due to inappropriate response to it, and I also conducted some research of my own, asking several senior executives to list organizations that have been disrupted technologically and what they thought of those organizations' responses.

My immersion in the topic awarded me with two insights. First, disruption is a wicked hot research topic. Second, there is a boatload of very powerful and affordably implementable prophylactic measures that enterprises can adopt to make sure that they do not become the next Blockbuster, Nokia or Kodak.

I'd like to mention some of the best titles on my disruption reading list, but first a word about the conference where I spoke, which was the Flight Training Industry and Design Conference, known as Migration. Most conferences are set up as celebrations of best practices. There's value in that, but there's even more value in organizing a cerebration of mistakes one does not want to make. Disruptive technologies can come for any of us. To be prepared, we need to do detailed management autopsies on organizations that have inappropriately responded to disruptive technology wielded by competitors.

Some rather thorough autopsies were included in the books I read. Vincent Barabba is one contributor to the literature on disruption who has had a front-row seat at some of the biggest mistakes ever made by companies faced with disruptive technology. His résumé includes Kodak, famously disrupted by digital photography, where he was head of market intelligence; Xerox which many will remember invented but did not successfully capitalize on the mouse, the laser printer and the graphical user interface, where he was head of market research; and General Motors, where he was head of strategy. His book The Decision Loom: A Design for Interactive Decision-Making in Organizations has many great stories and powerful lessons.

And Geoffrey Moore has an extensive list of the disrupted. In Escape Velocity: Free Your Company's Future from the Pull of the Past, he includes Sperry Univac, Honeywell, Control Data, Digital Equipment Corp., Wang, Data General, Prime, Kodak, Polaroid, Lucent, Nortel, Compaq, Gateway, Lotus, Ashton Tate, Borland, Novell, Nokia, Tower Records, Borders, Barnes & Noble, and Blockbuster among companies that suffered because they failed to craft an appropriate response to disruptive technology.


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