Small Businesses Have to Keep Their High-Tech Edge

By Marc Emmer

There’s an old saying in poker: If you can’t find the sucker in the room, it’s probably you.

Technology is a lot like poker: Either your company is ahead of the curve, or it is behind.

I have a technology client who opted to wait a year to implement an ERP system they could afford. While they were being methodical about identifying requirements and business needs, one of their competitors moved in quickly and gained a service and cost advantage in their sector.

My client BECAME the sucker!

The technology curve is a slippery slope for companies both small and large. In Microsoft co-founder Paul Allen’s recent book “Idea Man,” he offered a graphical illustration of Moore’s Law applied to the real evolution of processing speed and cost.

In eerie fashion, the slope of the curve for the last 40 years has been almost identical to Moore’s prediction.

One would think industry leaders who understood the dynamics of the theory would have been in a unique position to take advantage of it. Yet Microsoft itself is falling behind.

While the company was the market leader during the swing to personal computing, the genius behind DOS, Windows and MS Office is noticeably absent from the shift to mobile computing. Allen himself points out that Microsoft has missed an entire computing lifecycle.

Google is way ahead in search, Facebook is setting the pace in social networking, as Amazon is in books. Apple controls smartphones, music, etc. Apple’s market cap has risen precipitously (500 percent) in the last five years to $327 billion — while Microsoft has flat-lined at $205 billion[i].

Companies small and large must be diligent in benchmarking their spending on technology — ensuring that they are maintaining a technological advantage, or at least a competitive position on the curve. To lead in technology is also critical for manufacturing companies (who are less reliant on technological advances), because they are the ones least likely to benchmark investment.

Unlike physical products that must be reverse engineered and procured, technologists have the ability to replicate technologies from other industries and introduce them into their own.

One unique characteristic in the industry is that entire waves of improvements are offered in the cycle — allowing companies to leapfrog the competition in terms of game-changing technologies that sharply alter customer experiences.

In its heyday, Intel established competing development teams to create new generations of processors. Once a winning development team was identified, the losing teams where folded into them. A company has to hire, train and develop people of a unique mindset who can succeed in such a culture.

To maintain a business discipline of innovation requires an entire ecosystem that will support it. Paul Allen claims that culture is dead at Microsoft and the company’s inability to create new technological advances could lead to its downfall. The company may be as stale as “PC,” in the ads that openly mock the company’s buttoned-up persona.

Thus technology innovation (and perhaps any innovation) cannot occur in a vacuum; it must be part of a master scheme: a complete commitment to continuous improvement. Cutting-edge technology companies (and other companies for that matter) need to have a wizard behind the curtain — a competency to look ahead and challenge the status quo.

The lesson? Don’t be a sucker.


[i] Bloomberg News as of Aug. 8, 2012.

Marc Emmer is a President of Optimize Inc. a California based management consulting firm specializing in strategic planning. Marc is the author of the book IntendedConsequences. Marc can be reached at marc@optimizeinc.net.
Originally published: Sep 14, 2011

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