I recently got into a conversation with a hedge fund manager who told me that his company had a strong focus on mobility. I naively assumed he was betting on the rise of autonomous vehicles.
“No,” he said. “They’re just not ready for prime time. We made a lot of money shorting them.”
His response is a good reminder to business leaders that when it comes to emerging technologies, not every shiny new thing will be the next big thing.
Every decision maker now faces a disorienting blizzard of news and opinions telling them to embrace new technology or risk becoming irrelevant. Many tell me they have never been more anxious and confused about which technologies to focus on.
Breathless predictions abound
The march of technology never stops, but there are times when it seems to accelerate with an intensity of “everything everywhere all at once”. In recent years we have seen the emergence of concepts such as the metaverse, web 3.0, blockchain, the Internet of Things and virtual reality, all accompanied by breathtaking predictions about how they could transform our lives and the entire economy.
Lately, the emergence of vastly improved generative AI has led to an avalanche of advice on how companies should use machine learning tools to transform the way they do everything.
The truth is that some of these technologies will be very important to a company, and others not at all.
Recent history is littered with new developments that were heralded as transformative, but then fell flat. Remember when curved screen TVs were touted as a game-changer for home entertainment a decade ago? I bet you don’t have one at home. Crypto was supposed to transform the way we spend, bank and invest, but so far it has done little more than give criminals a convenient tool to move money around and scammers a way to lure investors.
Overwhelmed by conflicting and often selfish information? Here are the three main lenses to judge the relevance of new technology:
The lens of needs
Before you wonder if a technology will change the world, ask yourself if it will change the life of just one person. If it cannot clearly address an individual’s important need, it has no chance of succeeding on a larger stage. Before becoming the global behemoth it is today, Facebook demonstrated its worth among a few hundred students in Harvard dorms.
Most of us gasped and immediately realized the benefit of multitouch screen technology when Steve Jobs zoomed in on a family photo in his demonstration of the first iPhone. The need was clear.
Compare that to the doomed Google Glass, which showed no clear need that smartphones didn’t yet meet – and made the wearers look pretty silly, too. Google led the way by assuming the product would be useful to everyone before making sure it was useful to everyone.
Companies fall short if they take people for granted. Under the leadership of CEO Bob Shapiro in the 1990s, Monsanto promoted GMO crops as a force for good that could transform health, the environment and nutrition. The technology worked, but his vision failed because he failed to take into account consumer skepticism about so-called Frankenfoods.
The solution lens
A new technology can meet a clear need, but still fall short if the total solution is not yet ready for prime time. For example, it is easy to see how self-driving cars and trucks could solve gas shortages, pollution and other problems plaguing individuals and society. Indeed, many smart people have predicted that AVs would now be swarming the roads. But it turns out it’s not that easy to build a 2-ton robot that can reach 105 km/h without making potentially fatal mistakes.
Companies also don’t look at technology through the solution lens if they forget about the necessary enablers. In the case of self-driving cars, that means changes in roads, regulations and insurance. It doesn’t mean Tesla is wrong to invest in AVs; only that those not directly involved in the industry need not rush to respond yet. Electric vehicles, on the other hand, have long since proven their value as a practical solution. And there is enough regulatory and infrastructure support to make them a success.
Making large investments in a technology too early can be costly. In May 2022, Facebook changed its name to Meta to reflect Mark Zuckerberg’s all-in bet on the metaverse. And while the jury is still out on whether the metaverse fills a compelling need, it’s clear the benefits haven’t caught up with the idea; many people complain about other users’ bad behavior, uncomfortable headsets, and motion sickness, among other things. Hence Meta’s recent silent pivot to making AI its main focus.
The strategy lens
Companies need to view the potential of a new technology through the strategy lens by considering its potential impact on their business model. Self-driving vehicles will eventually disrupt FedEx’s business, but not for a while. Electric vehicles pose a much more direct threat to the country’s tens of thousands of gas stations and repair shops.
Businesses run into trouble when they minimize the potential threat of a new solution. In light of generative AI, a bank executive I spoke to acknowledged the cost savings of using chatbots, but then retreated into an argument about why people always want to talk to a human for something as important as making investment decisions. For him, I hope he’s right. But he’s a lot like the executives who said people would never buy shoes over the internet. When it comes to strategy, it’s actually better for CEOs to be paranoid and consider worst-case scenarios rather than blithely dismissing the danger.
There’s a lot to think about here. The good news is that you don’t have to have all the answers. But you have to get moving. Faced with this kind of uncertainty, smart leaders know that internal debates are of little value. It is much more useful to conduct experiments that teach you about the validity of needs, their timeliness and the impact on strategy. Like investing in stocks, it’s fine to start small and then lean out as the adoption of a technology brings value.
The secret to navigating technological change isn’t about knowing more than other people. It’s about learning faster than other people. Technology can be a distraction and a drain on resources, but the cost of missing out on something truly transformative can be enormous. And that, of course, brings us to things like artificial intelligence. More about that to follow.
follow me up Twitter or LinkedIn.
I am the CEO of Jump Associates, the leading forward-thinking strategy firm. For the past 25 years, I’ve had the pleasure of working with the executive teams of the world’s most admired companies, including Target, UMG and Nike, to solve their most pressing growth challenges.
My focus is on the key reframes and insights that lead to breakthrough results in growth strategy, executive leadership and organizational culture. I enjoy sharing my knowledge as a keynote speaker and as a writer for national US publications. I am also the author of “Wired to Care”, which Malcolm Gladwell said is “just what we need for the lean years ahead”.
When I’m not at Jump, I’m an adjunct professor at Stanford University. I love teaching the next generation of leaders – MBAs and design students – to discover the insights that will have the most impact.
read moreRead less
