Why some technical decisions are too important to leave to engineers

Many business leaders see innovation as essential, in addressing the current economic downturn. In this article, I will highlight a possible problem, which a innovation strategy might cause.

Study

Here an interesting study along these lines:

„In the 1970s, the instant camera company Polaroid was riding high with a reputation for innovative, cutting-edge products. It was in that decade, however, that it made a decision to launch a new, highly ingenious fully integrated instant camera and film system called the SX-70, a decision that would have dramatic and devastating consequences for the company. Dr Kamal Munir of Judge Business School shows in this research how a seemingly innocuous technical decision to develop a new innovation can have unforeseen consequences on a company’s production system, supply chain, vendor networks and the financial markets.“ – Jugde Business Schools

Findings

As you read in the article, Dr. Munir has studied the case of Polaroid intensively. This company was once known as very innovative. Several years later, it went bankrupt, because it made several wrong decisions with a groundbraking innovation:

Polariod started as s design company. As he explains it, Polaroid needed to change several parameters in their industry, to make the innovation happen. Among others, they decided to produce their own film material for this new product. By this, they introduced unwanted network level changes. In particular made this decision them a competitor to Kodak – without being prepared.
The new product required a special kind of battery. They first started to work with a partner. Due to technical problems with the battery, they decided to produce own batteries. At the end, they were the largest battery producer in the USA.

He recommends managers to learn about the technologies in their products. He further argues that technical innovations might have social consequence, which need to be understood.

Recommendations

My following reommendations help you to avoid that your company follows the Polaroid-example:

Manage innovation professionally
- Innovation might be too critical to just let it happen. Install a professional Product Management, and concentrate this function on managing the innovation process
- Make sure your product exceeds customer needs.
Learn to simultaneously think as an engineer, and as a business men/woman, as innovation often combines a technological view with a commercial point of view:
- Rollin: It is necessary that you successfully translate the language of the market into market requirements, and into product specifications for technicans.
- Rollout: You translate the technical features of a product into customer benefits and an appropriate positioning.
Match the product characteristics with the socioeconomic dimensions of your innovation:
- As the case of Polaroid shows, innovations might alter existing socioeconomic systems, and networks. You need to manage both parts, and you need to make sure that you think in complete systems.
- Innovation might affect the environment. You need to think about the environmental implications of your innovation.
- Consider the ethic dimensions of your decisions: Not each development, which is technically possible, is socially valuable, or should be realized.

Where to find the article

The following link leads you to the downloadsite at the Judge Business School. There you find the above material in different formats, among others a pdf-report, or an file in mp3-format → Why some technical decisions are too important to leave to engineers – Dr Kamal Munir.

→ Download the full article (pdf, 23KB)
→ Download MP3 audio by right clicking on the link (mp3, 18.8MB)

A different method to access this and other educational material, is available with iTunes (see → iTunes-U: Learn About). iTunes-U has recently been launched, and concentrates on material, and lectures from Universities, which is mostly available for free. This new feature works as follows:

Install iTunes from www.apple.de.
in iTunes, go to the iTunes-Store.
Select iTunes-U, and download the audio material or films, as needed.

Weiterführende Informationen

Das Original dieses Artikels ist auf →Der Produktmanager erschienen (©Andreas Rudolph). Regelmäßige Artikel gibt es über die (→Mailingliste), oder indem Sie →mir auf Twitter folgen. In der Online Version finden Sie hier die versprochenen weiterführenden Links: