In his Wall Street Journal column Andy Kessler remarks on the amusing and self-destructive impulse for all companies to become tech companies:
Does technology provide a competitive advantage? Companies are counting on it. In March McDonald’s spent $300 million buying an Israeli artificial-intelligence startup to personalize menus based on weather and trending items. Now they’re considering license-plate recognition systems for drive-through lanes. Based on your history they might offer to supersize your order, or just hand you your usual Happy Meal. CEO Steve Easterbrook says, “Technology is a critical element of our Velocity Growth Plan.â€
The problem is that adopting a useful technology doesn’t mean your advantage will last. I’ve long been amused by a succession of Harvard Business Review pieces that demonstrate this point. In 1985 Michael E. Porter wrote “How Information Gives You Competitive Advantage,†then in 1990 came Max Hopper’s “Rattling SABRE—New Ways to Compete on Information,†and finally in 2013 we got Rita Gunther McGrath’s “The End of Competitive Advantage.†Each of these takes describes a different stage in the life cycle of corporate tech.
concluding
Today every company wants to reinvent itself as a tech firm, but they should be careful what they wish for. The surefire approach is using data to capture and keep customers, even for Big Macs. Once a company steps on the technology treadmill by investing in a new system, it better run fast. Tech investing used to be about chips and software, but as it becomes more about using technology more innovatively than your competitor, more companies are vulnerable to the Hopper syndrome of remaster or die.
Just because you’re able to use a smartphone does not mean you’re able to design one. It takes a certain culture to be technology-driven and, once they reach a certain size, even notionally technology companies tend to lose it. We already seen an object lesson in Boeing. Keeping costs low while increasing the high tech content of their products may have cost them the company. The fallout of their folly hasn’t ended yet.
IMO auto companies should make the best, best-selling, and most cost-effective cars they can, entertainment companies should make the best content they can, and so on rather than trying to refashion themselves as tech companies. Leave technology to startups. There is no such thing as a permanent advantage.
I agree with the gist of your post here. I would note that in medicine the issue as I see it is not so much that people are trying to turn us into tech companies, but that we really need to figure out how use tech more effectively. For physicians, we are pretty good at using that tech which we need for our day to day clinical practice. On most of the other stuff related to medicine we are either not that good, abrogate everything to hospital administrators, or work in systems where we have little say.
Steve
My view of technology in health care is pretty jaundiced. Equipment is okay but incredibly expensive. Information systems are, by and large, awful, verging on the unusable. I don’t know whether to attribute that to the designers or the practitioners. Probably some of both.