Managing Emerging Technologies

I liken the management theories presented by the Wharton school to building a fire. When you first set fire to the paper under your logs you should blow gently to supply the fire the oxygen needed to build. If you blow too hard you risk blowing the fire out before it even gets started, don't blow hard enough and nothing will happen. This balancing act continues as you feed your fire, if you don't put enough wood on the fire the fire will have nothing to burn and therefore will not grow, if you put too much fire on, again, you risk the fire getting to big for you to handle.



In the Wharton book, Day and Schoemaker start off by explaining the complexities of managing emerging technologies. Smaller firms can actually have an advantage over larger more established firms when it comes to managing and taking to market emerging technologies. A small firm is nimble and agile when it comes to making decisions about the new technology, where as often large firms decision making process are so cumbersome and slow, by the time a decision is made the window of opportunity may be closed already. Another issue that large firms often run into is that they often have well defined cultures and business structures. These cultures and structures can prevent them from letting ideas fully bloom into emerging technologies. Where as a smaller company would let the technology flourish and create its culture. Of course there are disadvantages with being a smaller firms creating new technologies such as, monetary resources must be found from outside sources, the smaller firms may not have the personnel resources to control the business if the technology takes off, to name a couple. In these instances larger firms have a definite advantage, but they have to utilize these advantages to get the benefits.


In order for the larger firms to make use of the natural advantages they possess, Day and Schoemaker, suggest a business plan similar to what Hewlett-Packard put in place when developing, what was then (1992), the world's smallest hard disk drive, code names the Kittyhawk. When deciding to develop this product HP gave the project leader, Rick Seymour, a budget and free-reign for the deveopment and the go-to market strategy for the Kittyhawk. HP made this a separate division that could make decisions about their product quickly and move with the market as needed. They were still able to draw from the vast resources of the HP corporation for procedural knowledge and know-how, but weren't confined by it.

Large corporation such as HP and IBM have over time learned, the hard way, to recognize the need to silo off new and developing areas of their business to allow them the room to grow and mature. At the same time they allow these departments to take advantage of the resources of the "parent", to learn from past successes, mistakes, experience and knowledge.

Apple learned this lesson the hard way 16 years ago when they tried to develop and lead the industry with the Newton. They went to market with a product that was underdeveloped for what the market wanted and they paid the price. Fast-forward 10 years to the introduction of the iPod and then a few years later the iPhone and it looks as though Apple learned from its mistakes with the Newton. The iPod and iPhones were well outside the scope of the traditional computer manufacturing lines of business at Apple. However, by contracting an outside engineer that had complete control over development, the iPod was able to change quickly and drastically over the development cycle, as Steve Jobs requested. The iPod had go or no-go checkpoints along the way, where corporate (read Steve Jobs) checked how user friendly the hardware and software were. The product that was developed, ties beautifully in with not on Macs but PCs as well.

Wharton focuses on emerging technologies with the this new management frame work, but I wonder if it only applies to emerging technologies? Can we look at this frame work in the context of other businesses that you see around town? Could Barnes & Noble create a successful food business while working under the construct of B&N? Jack-in-the-Box tried to set up a higher end sit-down restaurant (JBX), however they did not get far enough awyay from their traditional set-up and business model to make it successful. Banana Republic, the Gap and Old Navy are all owned by the same company, but they operate autonomously and are all extremely successful. Do these not represent the same basic management ideas that Day and Shoemaker are trying to convey? Or is there something fundamentally different with technology and specifically new emerging technologies?


Resources:

Corcoran, Elizabeth. "Why Apple Won." Forbes.com. 23 October 2006. . 11 February 2009.
http://www.forbes.com/2006/10/20/ipod-itunes-jobs-tech-media-cz_ec_1023valleyletter.html

Day, George S. and Paul J.H. Shoemaker. Wharton on Managing Emerging Technologies. New Jersey: John Wiley & Sons, 2000.

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2086

Christense, Clayton M. "Hewlett-Packard: The Flight of the Kittyhawk (A)." Harvard Business Review 23 Oct. 2006