The Long View

The Laggards are (often) right

I mentioned in a recent post that I was re-reading Geoffrey Moore's Crossing the Chasm. The thought occurred to me while reading Moore's description of the Laggards in the product life-cycle that in many cases, the Laggards have it right. To quote Mr. Moore, "One of the favorite arguments of skeptics is that the billions of dollars invested in office automation have not improved the productivity of the office place one Iota. Actually, some fairly good data exist to support this notion".

While Moore discusses ways to rebut this line of argument, I would suggest one of my favorite points: Technology is only as good as the processes that it supports. I would rather be operating a company that had rock-solid processes implemented through mediocre technology, rather than dysfunctional processes with state-of-the-art technology.

I've seen too many cases of companies trying to solve problems by throwing technology at them.

One of the most hilarious examples of this that I can recall was when I was with a software firm producing a product for the behavioral health market. At that time, many community mental health organizations were facing significant changes in their business practices brought on by managed care and revenue capitation. One of the issues that they were struggling with, and that they repeatedly were demanding their practice management software to solve for them was the issue of services "incurred but not reported". Basically, the problem was that they had clinicians that would perform services, but fail to report those services in a timely fashion, so that the organization could account for the financial liability for those services having been rendered.

Here was a perfect example of a broken process within these organizations (they couldn't get their clinicians to report the services they were providing to clients), so these organizations were trying to find some technology - from us or any of our competitors - that would fix this broken process. As technologists, we could come up with all kinds of different mechanisms to collect the data. But short of implanting RFID chips into all of their clients, they would all require some user action to actually record the service event, and the phenomenon of "incurred but not reported" could still occur.

So the Laggards' skepticism is often right on the mark, but the fault doesn't always lie solely with the purveyors of the technology. It isn't the technology that is lacking, it's the proper implementation of the technology within the framework of the business. The challenge for us, if we're responsible for implementing a technology solution (whether on the business side, or the technology side), is to ensure that what we're accomplishing is really making things better rather than just making impressive rows of blinking lights.

Reading in context

Back in the early 90's, when I had ambitions of getting involved in high-tech marketing, I read Geoffrey Moore's Crossing the Chasm. At the time, I was actively involved in custom software development, so I was able to relate directly to many of his examples, but did so as an "outsider", as a consumer of software products rather than as a producer.

After about a dozen years, I decided to re-read the current edition of Mr. Moore's landmark work.

Seen through the lens of many more years of experience, including having owned my own software development company, and now working with technology start-ups, Moore's analysis of the markets for technology-based products assumes an entirely new meaning! I recall finding this book an excellent read the first time around, and am regretting not having picked it up and re-read it every couple of years. I wonder what mistakes I might have avoided, or what opportunities I might have seen had I done so.

I think that many good business books are like that. You need to revisit them occasionally to refresh yourself on the ideas, certainly; but more importantly, you need to re-interpret the ideas in light of your own experiences. I'm thinking maybe it's time to go back and re-read some other gems - like Tom Peters' Thriving on Chaos, Mark McCormack's What They Don't Teach You at Harvard Business School, or Ted Levitt's The Marketing Imagination (which is out in a new edition).

Failure to innovate - short-term costs

Last september I posted an Item about process innovation in which I made some cautionary comments about the importance of making process innovations under conditions where the company is operating profitably. The point was that all kinds of external factors can change in an instant, and those process innovations can make a world of difference in the effect that those changes have on the company's bottom line, and in some cases, on the company's very survival.

I had a conversation with a colleague over the weekend that caused me to realize that the negative effects of broken processes can be much more immediate. My friend described his company - good product, good leadership, satisfied customers and a profitable balance sheet. The problem was that the company suffered from poor day-to-day management. As a result, their internal operations were so wasteful and inefficient that my colleague (a very experienced, competent and hard-working team member) is starting to actively look for another position. It's surprising that I needed to see this in someone else, as I've left companies myself in similar circumstances.

Despite the fact that your company is turning out good product to satisfied customers, and that your salaries and benefits are at or above average for your industry, you could still lose one of your most important assets - the intellectual and human capital that is responsible for continued product development, invention and innovation - if the processes that keep the hits coming are seriously dysfunctional. Under these circumstances your employees find themselves working at cross-purposes, wasting efforts, duplicating efforts, and generally working inefficiently. The feelings of frustration only get worse when these employees are ignored when they attempt to help correct these situations, coming as they often do from technical people. (See this post on why technical people aren't listened to when they try to advise us on business processes).

The bottom line is that it doesn't take a major shift in the business landscape to make failure to take advantage of innovation opportunities a costly mistake.