Being at the forefront of innovation is great, but it’s not for you, or your company.
Don’t get me wrong, being an early adopter of new technology helps pad out your keynote speech with a few extra buzzwords, but it won’t help your bottom line.
Now, before we get too deep into this, try to avoid thinking of Apple. While its stories are a great source of procrastination, they’re not an accurate sample for all but five companies in the world. Reading articles about them is almost pointless. Apple is a story of survivorship bias; where are the other thousands of companies who you’re not hearing about? They’re probably not companies anymore because their innovations didn’t work out so well.
Often, the need for early adoption within a company comes from an operational issue where change resistant organisations are too slow in response to market conditions. It’s an attempt to leap frog your competition. This inherently creates a business model reliant on a long-tail implementation process that creates a paradox of risk. You’re slow to create change, so you have a longer innovation cycle, which increases upfront investment and sunk cost bias, which makes you slower to respond to the next technologies or a market change. The cycle goes on.
But that’s how the business world operates. Operational weaknesses go along unnoticed, or unimportant, until something like the GFC comes along and wreaks havoc against those who are unable to adapt. Unfortunately, it’s often far too late.
While the prevalence of companies who are able to innovate is greater than ever before, few are operationally and financially able to deviate from poor decisions. An unsuccessful innovation, and the risk it carries, is often the difference between success and failure.
There is also a substantial difference between innovation and early adoption. In its simplest terms, innovation is the use of critical thinking to improve upon current technologies, processes and management structures. Its importance within any organisation cannot be understated. Early adopters on the other hand, separate themselves through a conscious decision to champion, most notably new technologies, before their competitors.
While remaining ahead of the curve has its advantages, its timing is often critical. The advantage of being an early adaptor continues to reduce as newer innovations leap frog their predecessors. First mover advantage will decline with the increased frequency of innovation, and it’s a good thing.
Companies that are able to quickly adapt within this market are typically less prone to competitive threats, but being the first isn’t necessarily an advantage.
In essence, remaining an early adopter has become near impossible. No one company can keep up with each new innovation as it becomes available, nor should they. With the amount of new technologies being developed, not all of them will last. In the same way we don’t hear from the companies who failed to be Apple, we remain largely unaware of the technologies that flopped.
The issue that many companies face is not just whether or not they can keep up, but how quickly they can change when they’re wrong. Success, which could almost be defined as “survival”, comes from the ability to swiftly adopt technologies as they prove their worth within the marketplace.
Differentiation, in part, is moving away from products and services in favour of a business model that is able to adapt before competitors.
Self-cannibalisation and the need to incessantly improve your offering for the sake of operational flexibility has become a reality in many businesses reliant on remaining ahead of the competition. On the same tangent, a long-tail, internal implementation process of new, early adopted technologies is likely to be quickly surpassed. The benefit of being an early adopter shrinks as the risk increases.
Ultimately, the decision comes down to when to adapt new technologies. To reach this point, organisations must thoroughly understand the balance between the risks of adoption and the time delay for competitors or new entrants to implement superior innovations. Those who are able to master this juggling act exude a competitive weapon; time.
This benefit, along with its many luxuries are further cultivated through a responsive organisational structure. In an environment where competitive threats can be responded to immediately and new technologies are quickly followed, the benefits of being an early adopter within the industry all but cease to exist.
At its core, operational flexibility should be the most highly sought after attribute of any organisation. An ability to quickly determine and act upon any course of action reduces the competitive threat of newcomers – increasing the barriers to entry, not incentivising those whose only goal is to be acquired.
Apple didn’t create the mp3 player, smart phone or the tablet, but they did follow it quickly and they did a better job at it.
This is a contributor post by Ryan Griffin, business director at digital marketing agency Switched on Media. You can read more of his thoughts here.
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