Friday, November 9, 2007


Imagine my consternation! The world is developing at a breakneck technology speed every nano-second, and here’s my family cook, completely disinterested in employing any technological innovation in cooking. For him, cooking means an excruciatingly elongated ‘manual’ exercise stretching over 3 hours, implemented by gastronome connoisseurs, and tasted by epicure gourmets...! I was thoroughly exasperated! Here we were printing this special issue of 4Ps B&M covering the top 20 firms leading the I-T brigade of India, and there was my cook, passionately blabbering out the top 20 reasons leading the Why-T brigade of India; in other words, why technology is not imperative to performance! That was the final straw! I got furiously infuriated; and took it upon myself to show to him why global researchers disagree with their cooks! In other words, this is the story of how I shot myself in the foot, painfully!

I started with PwC’s superlative Annual Global CEO Survey 2007, which strangely (as per me) stated that global CEOs place “technological disruptions” at a lowly rank of seven in the list of most important concerns. The report further stated that only 20% of CEOs are ‘extremely concerned’ about “technological disruptions.” Yang Yuanqing, Chairman, Lenovo Group, quotes in the report, “The most critical factors that determine whether you win or lose are the way you do business, the deployment of your resources, the allocation of functions and your operational workflow...(rather than technology).” Stunningly, the situation has been the same even in the past. Even in PwC’s 2004 Global CEO Survey, top honchos firmly believed that “Technology” was only a lowly 7th in their priority of biggest challenges. The number one of course being – People! The outstanding NYSE CEO Report 2008 had similar findings. Like last year, “CEOs view their management team (again ‘people’!) as ‘the’ internal factor having the greatest impact on revenue growth, with brand strength, new product development, technology, and strategic partnerships and alliances in the second tier.” The report further mentions that when asked about the “most important internal factor affecting profitability through 2008, only 5% of the CEOs voted for New Technology!” (There were 8 other factors cited as more critical than New Technology). But the classiest statement was how a spine-tingling 67% of CEOs believe that “the ROI from technology investments have failed to meet expectations till date!”

I found almost all global research pointing towards the same direction. The IBM Global CEO Study 2006 shows how in the electronics industry, the “technology factor” is not the most important external force shaping innovation (‘Market Factors’ is, as per 74% of respondents). In their peerless report titled Economic and Technical Drivers of Technology (March 2006), Dr. P. Yin (HBS) & Dr. Timothy F. Bresnahan (Stanford) dramatically prove that even in technology industries, “distribution played a larger role than did technical progress in determining the market outcomes.” The inimitable Economist Intelligence Unit 2007 report states, “As amazing as engagement technology can be, experts agree that it is generally better to focus on business goals rather than the technology.” The most famous Charles Jennings of Reuters says in the report, “I think there have been lots of mistakes over the last ten years, expensive mistakes, because they’ve been technology-led.”

It wasn’t too long back when the exemplar Jim Collins wrote in his path-breaking treatise, Good To Great, that “none of the Good-To-Great executives put technology as one of their top 5 drivers.” The preeminent Dr. Peter M. DeMarzo, Dr. Ron Kaniel and Dr. Ilan Kremer (Stanford Graduate School of Business; and the Fuqua School of Business, Duke University) in their formidable report (...Technology Bubbles) doubly vindicate that finding with conviction that “the introduction of a new risky technology results in over investment, and in risk-taking behaviour which seems to deviate from a rational outcome.”

Without an iota of doubt, technology can only be a support for better operations, rather than a critical differentiator for dramatic success. As conclusively proven in McKinsey’s classic 2007 report (The Next Frontiers in IT Strategy) – “66% of the IT company CEOs are not sure about their companies being effective/extremely effective at introducing new technology better than their competitors...” Clearly, ‘marketing’ will always work thunderously better than wasting money on ridiculously innovating and implementing new technology that consumers never wanted! My cook somehow had understood this unique learning years back. Good for him! I’ve loaned him away to my neighbour, for free... These days I just order food on the phone! 30 minutes is all it takes :-)