Technology Accelerators

1. Technology Accelerators Dana Cook Stephanie Light Ian Walraven Jordan Jones Austin Bastian Philip Winfield Tyler Buschman Bryson Bell

2. Technology, Hedgehog, and Advancement • Technology is always changing • Great companies adapt and endure • Walgreens, Gillette • “Technology-induced change is nothing new. The real question is not, ‘what is the role of technology?’. Rather, the real question is, ‘How do good-to-great organizations think differently about technology?’”

3. Technology Accelerators in Good-To-Great Companies Abbot • Computer technology to increase profit per employee • Not a leader in pharmaceutical R&D Circuit City • Point-of sale and inventory tracking technologies • Operate a geographically disperse system accurately

4. Technology Accelerators in Good-To-Great Companies Wells Fargo • 24 Hour Banking by phone • Early adopter of ATM’s • Buy and sell mutual funds at an ATM • Internet and electronic banking Philip Morris • Flip-Top Box • Computer based manufacturing

5. Technology as an Accelerator, Not a Creator of Momentum • Jim Johnson became CEO of Fannie Mae and hired a consulting firm to do a technology audit • Lead consultant Bill Kelvie used a four-level ranking system • Fannie Mae ranked a two • Kelvie was hired to move the company ahead and eventually changed the 2 to a 3.8

6. How? • “We moved technology out of the back office and harnessed it to transform every part of the business.” • Created an expert system to lower the cost of becoming a homeowner • Reduced loan-approval time from thirty days to three minutes • The Fannie Mae transition began in 1981, with the arrival of David Maxwell, but didn’t have the technology until the 1990’s

7. The Central Point to This Chapter • When used right, technology becomes an accelerator of momentum, not a creator of it • Good-to-great companies never began their transitions with pioneering technology • Technology has to be relevant and link directly to the three intersecting circles of the hedgehog concept

8. Technology in Good-To-Great Companies • Needs to fit directly with your hedgehog concept • The relationship to technology is no different than the relationship to any other category of decisions • In the comparison companies the only three cases of pioneering in the application of technology were Chrysler, Harris, and Rubbermaid • All were unsustained comparisons, which shows technology alone cannot create sustained great results, Ex: Chrysler

9. The Technology Trap • Two incidents that stood out to Collins • Time magazine’s selection in 1999 of Albert Einstein as “Person of the 20th Century” • “is technology, change – and the connection between the two.”

10. The Technology Trap • One might expect that “technology” would absorb a significant portion of the discussions with good-to-great executives • SURPRISE, 80% of the good-to-great executives didn’t even mention technology as one of the top five factors in the transition. • Only 2 executives of 84 interviewed ranked technology number 1.

11. The Technology Trap • If technology is so vitally important, why did the good-to-great executives talk so little about it? • Because technology is apart of the equation, but a secondary part. • Emphasized other factors even more

12. The Technology Trap • “Indeed, you could have given the exact same technology at the exact same time to any number of companies with the exact same resources as Nucor – and even still, they would have failed to deliver.” • Like the Daytona 500, the primary variable in winning is not the car, but the driver and his team.

13. The Technology Trap • Mediocrity results first and foremost from management failure, not technological failure. • After examining the comparison companies, not a single example of a comparison company’s demise came primarily from a technology torpedo. • R. J. Reynolds tobacco company • A&P Grocery stores

14. The Technology Trap • The evidence from Collins’ study does not support the idea that technological change plays the principal role in the decline of once-good-to-great companies • Technology is important, BUT technology by itself is never a primary cause of either greatness or decline.

15. The Technology Trap • Throughout business history, early technology pioneers rarely prevail in the end. • Shows up through the entire history of technological and economic change. • Technology cannot turn a good enterprise into a great one, nor by itself prevent disaster. • Thoughtless reliance on technology is a liability, not an asset.

16. Technology and the Fear of being Left Behind • Good to great companies maintain a balanced perspective on technology. • Most companies became reactionary • Strategies with great companies weren’t reactionary • Weren’t driven by fear of what others were doing • No technology can make you level 5 “Those who turn good into great are motivated by a deep creative urge and an inner compulsion for sheer excellence.”

17. Under Armour • Technology as an accelerator • Pioneered application of superior T-shirt that enhances performance for the next-gen athlete • Provide compression and wicked perspiration off skin rather than absorb it • Works with body to regulate temperature • Developed microfiber gear and launched performance product industry • Advanced the sportswear and athletic apparel industry • UA commercial

18. Key Points for Chapter 7 • When considering new technology, use the “crawl-walk-run” approach • Good-to-Great companies think differently about technological change than mediocre companies • Key Question: “Does the technology fit with your hedgehog concept” • Does it fit within the three circles • Don’t respond to technological change by lurching about and being motivated by fear, but respond with thoughtfulness and creativity