Is a technology glue or rocket fuel?
Technology can provide the manner to leap frog your competition, to give you that edge to leave your competition in the dust. Thus, we want rocket fuel. Speed the ability to add new capabilities to match or beat the competition. Therefore launching of a business’s ability to grow or have a higher profitability through streamlined processes or new functionality. Amazon’s feature ‘other customer’s viewed these items’ drives sales or Tesco’s adoption of RFID to drastically reduce their inventory handling costs are examples of leap frogging.
These and other examples are what makes technology sexy cool and especially attractive to business leaders. They often come with greater risk, but shorter and higher ROI. Like rocket fuel the technology burns very hot driving growth and hopefully profitability. However, like rocket fuel it burns out quickly as competition reacts to match the new advantage to level the playing field. Add to this that also like rocket fuel, you will occasional get a load boom, not a good boom.
That is the risk versus reward. If you want to play with rocket fuel technology be prepared, actually plan for accepting failure. It is the cost of success of rocket fuel technology. It actually is more than the cost, the failures are often the requirement to achieve the success. Like Edison’s thousands of failures before he invented the light bulb. Thomas Alva stated that he did not fail as much as he found new ways NOT to make a light bulb.
Another advantage of rocket fuel technology is that it spurs revolutionary change. As the axiom goes – some people change because they see the light, others because they feel the heat. Rocket fuel technology can provide both light and heat.
Technology is not only rocket fuel, but also it can be glue. Tighter integration with your customers making it easier for them to do business with you providing greater customer retention and higher customer profitability. Viewing a technology solution as gluing your customers to your business may not launch huge growth gains or better than industry profitability levels. Yet, creating a technology relationship that is ensconced between your business and your customers can provide protection in times of economic turmoil. When the economy started its free fall, customers changed to those competitors who were quick to slash prices.
If the customer has to jump through any hoops to make that switch, it will give them pause – angry pause, but pause. Using technology to offer value added services buys your business that pause. Even if the customer leaves, once exposed to your competitors ‘the old place does this, you do not’ services they can be retrieved due to the ease of working with your business versus your competition. Proctor & Gamble’s integration with Wal-Mart’s systems and also integrating their new product development systems into Wal-Mart and other customers is glue.
Technology glue comes with lower risk, lower short term reward, but often can provide a longer term reward that is a match for rocket fuel rewards.
I am not advocating glue over rocket fuel, for any business to be successful in today’s world, you need the right combination of rocket fuel and glue technologies.