The idea to write about this article came about while listening to a video of Steve Jobs where he answers a very technical question from the audience about particular features about a technology (open doc) and how this could be used more effectively etc.
His answer which is what happens often with most market leaders where they create the new technologies but then lose out using it in the most effective way because they try to use the technology and its features on improving their existing products. The ideal method of doing this is to identify the actual gaps and customer needs that are not being met and how this new technology could be used to address this opportunity.
He also goes on to quote the example of the compact laser printer which was built by Apple based on laser technology and there was only apple which had this product at that time in the market. The product output was fantastic from a technological point of view, but the money involved in that product segment from the customers that it was addressing was so miniscule that apple very soon stopped making the product itself.
The link for this interesting video is attached below.
Cramming if consider an example which all of us have gone through is when just before an exam we try to learn a lot of things within a very short time. As we have all seen this doesn’t really lead to any real long-term benefits other than managing through perhaps that exam.
The same happens from an innovation front also.
The problem with cramming is that it changes the innovation in ways that obviate its inherent disruptive energy. It takes an innovation from a circumstance in which its unique features are valuable to a circumstance in which its unique features are a liability.
Cramming is like trying to stuff a square peg into a round hole.
Let’s take a very often quoted example of Kodak. They build the digital technology for capturing pictures digitally. This was when they were world market leaders in film cameras. What did they do with this new technology. They tried to use the new innovative technology to act as a replacement for their films which were then being used in the film cameras. They off course produced a very low-cost digital camera after spending something like two billion US dollars in the early 1990s. The actual potential of this technology was in addressing a much wider audience as we have seen today than restricting it to a replacement for the films that were being used.
Cramming innovation into a legacy framework often leads to short-sighted strategies that fail to deliver long-term value, as evidenced by the downfall of companies like Kodak.
Despite being the pioneer of digital photography, Kodak’s leadership chose to protect its profitable film business rather than fully embrace the digital revolution. Their reluctance to disrupt their own market with a bold new approach and instead to just improve the existing product segment ultimately allowed competitors like Sony and Canon to dominate the digital camera market. Failure to integrate new technologies and adapt to market shifts can render even the most established companies obsolete.
The challenges faced by Kodak are not unique. Blockbuster is another classic example of a company that failed to use new technologies and instead crammed the new technologies to try and only improve their existing business models and products. When streaming technology began to emerge, Blockbuster clung to its brick-and-mortar rental model, underestimating the potential of digital distribution. Meanwhile, Netflix embraced streaming and swiftly transitioned to an on-demand service, reshaping the entertainment industry. Blockbuster’s refusal to pivot resulted in a rapid decline, leading to its eventual bankruptcy.
Similarly, Nokia’s story reflects the dangers of incremental innovation. Once the undisputed leader in mobile phones with a huge market share in the mobile phone category Nokia was slow to recognize the significance of smartphones and the shift toward software-driven ecosystems. While Nokia focused on hardware improvements, companies like Apple and Samsung were busy creating smartphones that integrated cutting-edge software, apps, and user experiences. By the time Nokia attempted to catch up, it was too late. The market had moved on, and Nokia’s market share plummeted. This example underscores again how cramming can help us loose out even your existing market at the blink of an eye.
These examples highlight a critical point: innovation is not just about developing new products or technologies; it’s about strategically aligning those innovations with the future direction of the market and the changing consumer needs.
One of the primary reasons that this keeps happening again and again is because the way every organization works where it’s structured to maximize its share in its existing product category and maximize its short-term market shares and profits.
To continue knowing more about why cramming happens and ways in which this can be avoided do subscribe to my LinkedIn page, Rejo’s Business Bytes, or my website, rejofrancis.com
