Are Technology Companies Ripe for Disruption?

[Monirul Islam]

What's the Downside to Disruption in High Tech?

This month's column gave many readers an opportunity to join my rant about the need for disruption to combat the increasing inscrutability and waste of technological innovations from a user's point of view.

Several hypotheses advanced as to why high tech industries find themselves vulnerable to disruption today reflect thoughts of those who have studied the phenomenon. Philippe Gouamba said, "It is more important for Apple to out-do Samsung (and vice-versa) than it is for them to provide us with products and innovations that we can actually use." Paul Hamilton-Smith opined that software companies "mostly subsist from their renewal revenue stream. That stream is generated by 'new and improved' software versions." And Julian Lowe commented that "I increasingly get the impression that some geek out there is trying to impress his/her peers and just confuses the customer."

Mark Altobello offered an interesting theory: "We try to make the software so flexible to reduce the cost of future changes. But I think we therefore omit the idea of quickly getting the user what they say they need--and then fixing it when the need changes." Kamal Gupta's comment implied that the affluence that enables customers to spend for unused functions may have something to do with it. As he put it, "(Disruption) is already happening in small ways in India. From the $2,500 basic car, to $100 smartphones for the masses to similar other innovative technologies for rural households." Heaven forbid, Kapil Kumar Sopory even suggested that the problem is us. "Each one (of us) has his limited priorities and remains content with the absolute minimum only. There is (a) need (for us) to explore and improve knowledge and skills regularly...."

Robert Soloman observed that the problem is not universal in that "companies that follow a lean methodology, where the initial focus is on a Minimum Viable Product (MVP) typically do not have this problem... A proper MVP only comprises the minimal set of functionality that a user will find useful--and is willing to pay (for)."

Others pointed out that the high tech community is experiencing disruption at a rapid pace. Commenting on the irony that the cloud is today's mainframe, Mark Witczak observed, "What's old is young again. The same is true for other technologies. I suggest that the infotech revolution has been going on before our eyes, just not on a wholesale level." Doug Elliott added that "disruption is already happening (in infotech)... And more so than in manufacturing I suspect."

Running through some of the comments was a recognition of the role that even "nice to have" versus "need to have" innovations play in the evolution of high tech products. Joe Schmid pondered a world without such innovation. "The disrupter makes sense out of the pot of problems their predecessors stirred up and targets solving the preeminent problem that emerges as the mud settles. Disruptive leverage lies in the hands of an astute follower." Thornton Parker carried this line of thinking a bit further in commenting, "As sensible as this seems, I wonder if it (disrupting high tech) is a prescription for more commoditized products that can have little value-added and need to be produced in the countries with the lowest costs."

Does Parker have something here? What's the downside to disruption in high tech? What do you think?

Original Article
I ask myself why I understand so little of the policy issues, product discussions, and even general news coming out of the tech world. That's my problem. I need to fix it by doing what Jack Welch asked all of his senior colleagues at GE to do: find a mentor no older than 30 to help me update my tech skills and knowledge.

Is it my imagination, or has the world of information technology become so inbred that it is losing touch with users, particularly those of a certain age? If it's not my imagination, that's the tech world's problem and opportunity. At the risk of employing the most overused and misused term of the decade, are the masters of disruption themselves providing attractive opportunities to those who would disrupt them?

Clay Christensen's original concept of disruption is very simple. It concerns the successful development of products and simple solutions with less functionality and much lower prices than competitors locked into a product development strategy calling for growth through product obsolescence and more and more largely unused but expensive bells and whistles.

We're told that the typical user of information technology today utilizes less than 5 percent of the capability made available by today's hardware and software. A small number of basic functions repeatedly are put to good use by the typical user. They are the need-to-have functions. The functions thought by designers to be nice to have may enhance marketing efforts and satisfy software engineers' desires to make complex things, but they largely go unused. For some, they even make access to "need to have" functions more confusing.

How has this come to pass? Is it that much of the information technology we confront these days is the output of a small group of entrepreneurs, engineers, and venture capitalists located in close proximity to one another, frequenting the same restaurants, and speaking a language of their own? They represent a classic "cluster" from the world of competitive strategy. But are they denied exposure to consumers who are different from them in age, educational background, technological sophistication, and, as claimed in a recent, well publicized lawsuit, gender?

My inspiration for these rants is Scott Cook (HBS MBA '76), co-founder of Intuit and a true disruptor. From its founding Intuit, quickly became the leading producer of personal and small-business financial software. It did it by providing simple and inexpensive solutions to everyday problems. Initially it solved a problem in Scott's family of balancing the checkbook. Intuit is said to have been the 47th software company to address the problem. It did it by using as a metaphor the familiar checks and checkbooks that could be manipulated in non-threatening ways on a computer screen. Scott likes to say that Intuit had 47th mover advantage, in part because it adopted a strategy that identified the pencil as the company's most important competitor. As a result, Intuit has dominated markets and badly beaten Microsoft at the personal finance software game. And it has done so by hiring software engineers that are hard to find in Silicon Valley—those who actually like to design products that are simpler than those of competitors. Cook's company disrupted its industry.

This prompts several questions. Are information technology companies subject to the same kinds of blinkered strategies experienced in more traditional industries? Has there been sufficient effort to disrupt them? Or are my perceptions those of a generationally handicapped and challenged observer? Is it time for more disruption in infotech? If so, what will it take to achieve it? What do you think?

Source: https://hbswk.hbs.edu/item/are-technology-companies-ripe-for-disruption