MSIN7013 Kamila Wrobel

Innovation management

Coursework 1

Why does the emergence of a new technological paradigm often

seem to create problems for existing manufacturers?

The main mission of every single company is to exist and sustain in the
market due to changes which emergence almost with every eye blink.
Manufacturers must be very careful when they choose their resources as
technological supplies, labour or finances. New technologies, In other words,
change the old and insufficient way of running a business. It is in human
nature, that we are afraid of changes especially if they are making things,
which we know very well, completely new and different. One Chip Holt, the
Vice President of Xerox R&D said: “People have a tendency to focus in on the
things they’ve most comfortable with and work them to death”. Is it because
emergence of a new technological model create problem for manufacturers?
The key word of problems caused by young technologies is managing the
change, which is shown in further examples.
I would like to start with understanding the meaning of the term
‘technological change’, which includes three core processes: innovation,
invention and diffusion of technology. It is continuous activity, a progress to
improve industry. The difference between inventions and innovations is that
the first one lead into new process or product while the first one not always do
that. The great example of invention is jet engine discovered by Frank Whittle
and Dr Hans von Ohain in 1930 and innovation is Pampers in 1961 by Victor
Mills of Procter & Gamble who created an absorbent disposable diaper than
didn't leak, which was a great convenience for mothers all over the world (
Forbes, 2002). However it is not so simple to create a new and successful
product without facing any problems. The list of some of them is listed below –
based on an authentic difficulties which have appeared in well know
companies as Xerox, Motorola, Apple, etc.
 First of all bureaucratic barriers to implementing new technologies.
Recently in California, one of the doctors subscribed a Diovan for a patient
with hypertension. The medication was supposed to low blood pressure
(Technology Review, 2010). Unique about this method was something
different – patient was given some extra supplies as well: a bottle of
microchips and a waterproof stick-on patch. Those were measuring his body
temperature and many other important figures. The microchips were
connected with the patch by sending them a signal, which meant that pills had
been swallowed. Due to this process the smart phone collected data and
uploaded it into Internet, and from now on the Doctor of the patient was able
to see the results on the screen in front of his computer. As it is believed a
major step in medicine had been made which is crucial in decreasing hospital
treatment costs. The main problem is bureaucracy as FDA – US Food and
Drug Administration is concerned about privacy, security and data loss. New
technologies cannot be adapted without permission of the Government
especially when it is connected with publicity and social care. Barriers linked
to the legacy and licences are very tough to overcome. Manufacturers even if
they possess incremental or transformational innovation will not achieve
success without permission for developing their product.
The crucial resource in every company is finances, well known as
an amount of money. Bookkeepers and managers need to be very careful
about dividing and admitting finances to each department. Due to problems
generated by emergence technological paradigm manufacturers complain that
in many cases it is simply too expensive. Recalling last example of new
technology, which helps doctors to detect any health disorders, hospitals as
well as insurers are very disturbed as it may lead to higher short-term costs. It
influences both sides: customers and manufacturers. If technology is to
expensive to produce it means it will be also expensive in sales. The problem
is demand for our product produced by pricier technology.
Very important in every venture is market analysis, which focused
basically on the customers and competitors. Being a leader and a pioneer in
new technological paradigm may tempt other companies to apply this
technology but with improvements. The learning effect may be very
dangerous for companies as they own mistakes may be used as a great
lesson for followers, which will avoid costs caused by errors. There are
thousands of examples but I will mention the most common: one up to date
electronic readers, touch phones, mp3 and many others. The boom in
providing utensils for reading books online without necessity of carrying heavy
ones seems to be a great opportunity for companies as Sony, Amazon, Apple.
The great success thanks in large part to display technology, which is E Ink
invented in Cambridge (Technology Review, January 2010). It was first used
by Amazon’s Kindle and the Sony Reader. Most of them have similar
functions however companies search for opportunities to distinguish their
products mainly by adding extra features like for example, audio display, web
browsing, social networks etc. Another example of competitor, which had
better market analysis and marketing channel Xerox and its printer (Abetti,
P.A., 2000). They were competing with GE printer, which was not as good,
because despite the fact that it was very rapid, the quality of print was poor.
The printer introduced by Xerox had the same speed and, what was their
major success, software and resolution of print was undoubtedly better.
Examples given above show how new technologies raise the problem of fast
learning competitors, who can easily avoid costs of mistake and gather the
information about the target market.
Indispensable element of success is using free communication
channels inside the company. Understanding the importance of new
operations as a great progress in company need to be the same on every
level of its level. Marketing Department needs to communicate with
Production Unit, R&D etc. Without inside communication divisions will be
working separately, what may appear as longer production process in a
future. Using free communication channels is crucial factor of success as a
great example is mentioned earlier GE non-impact printer. After retirement of
former General Manager of the Communications Division, the Financial
Manager who claimed to be his successor was not interested in cooperating
with R&D Department. Later it caused serious problems, as none of each
units were interested in working with each other, poor quality of image and a
lack of software (Abetti, P.A., 2000).
Very important for every manufacturer are suppliers and business
partners. Introducing new technology to the market may cause serious
cooperation disorders as they may be harmfully affected by changes. For
instance in 2000 TV advertising was in danger as new personal TV recorder,
TiVo, had been launched (Campaign, 2000). From now on people were able
to record every single favorite programme regardless of what channel it was
on. What matter is that they can also omit advertisement what cause serious
problem for companies who pay thousands of money for releasing their
commercials. Relations between two sides of new technology were imbalance
as far as aims of TiVo box and commercial companies were completely
different.
Last but not least argument confirmative given thesis is the need of
training the personnel. People are used to dealing with the same machines,
programs and software, repeating the same operation. The moment the
company is introduced with new technology, it needs to be familiar with new
procedures as well. In practice in means that employees have to have access
to support, if they have any doubts and problems with using new technology,
for 24 hour per day. Staff need to be well trained and skilled, what can be very
time consuming as people are not machines and every single person is about
to know how to manage with new technologies. Otherwise they may cause
serious injuries not only for the company, but especially for themselves. As we
can see, introducing new technologies makes the company modern and
sophisticated but the time of adapting it depends on how much time will
employees need to adapt it. The main duty of the managers on this stage is
to make sure, that everything proceeds efficiently, every problem is solved
and coworkers don’t have any doubts about new technologies.
To sum up I would like to say that changes, especially
technological, are inevitable part of every company growth and success.
Without them it will be very hard to sustain on the market as progress is
supposed to be one of the mayor aims of manufacturers. In spite of that fact
emergence of a new technological paradigm often create problems. The main
reason is a fear of change not only of employees but business partner as well.
Every single change needs to be treat as the heart of growth in the economy
and rise in standards of living. Companies need to look forward into the future
and prepare themselves for tough competitors and unpredictable
circumstances, as we have seen during latest economic crisis. Managers are
in duty of running business well prepared for changes.

References:

1. Abetti, P.A. (2000) “Critical success factors for radical technological

innovation: a five case study”, Creativity and Innovation Management, 9(4),
pp. 208-221
2. Dignam, Connor (2000) “New technology is placing the future of TV ads in
doubt”, Campaign
3. Gravitz, Lauren (2010) “Wireless Technology Could Slash Health-Care
Costs”, Technology Review
4. Kremen, Rachel (2010) “Amazon Expands the Kindle with Apps”,
Technology Review
5. Karlgaard, Rich (2002) “85 innovations”, Forbes
6. Walden, Beth (1988) “New Technologies in 1990. A new socio-economic
strategy, OECD