Technology Accelerators
Use technology to accelerate momentum you already have, never as a substitute for clarity
Technology Accelerators is a framework for thinking about technology as a tool that amplifies existing momentum rather than creates it. Good-to-great companies never began their transformations with pioneering technology. They became technology pioneers only after discovering their Hedgehog Concept and reaching breakthrough. Technology served as an accelerator of momentum that was already building, not the creator of that momentum.
The framework provides a simple decision tree for technology adoption. Does the technology fit directly with your Hedgehog Concept? If yes, become a pioneer in its application. If no, do you need it at all? If yes, achieve parity. If no, ignore it entirely. This approach explains why 80 percent of good-to-great executives did not even mention technology as one of the top five factors in their transformation, despite being widely recognized as technology pioneers in their industries.
The framework also addresses the fear-based relationship most organizations have with technology. Good-to-great companies were not motivated by fear of being left behind. They responded to technological change with thoughtfulness and creativity, driven by a compulsion to turn unrealized potential into results. Mediocre companies reacted with panic and lurching, motivated by fear. Walgreens exemplified this with its crawl-walk-run approach to the Internet while competitors panicked.
- Technology is an accelerator of momentum, not a creator of it; you cannot make good use of technology until you know which technologies are relevant to your Hedgehog Concept.
- Eighty percent of good-to-great executives did not rank technology in the top five transformation factors, even at companies famous for technology pioneering.
- Mediocrity results first and foremost from management failure, not technological failure.
- Those who turn good into great are motivated by inner compulsion for excellence; those who perpetuate mediocrity are motivated by fear of being left behind.
- Crawl, walk, run can be highly effective even during times of rapid technological change.
- Establish your Hedgehog Concept firstBefore making any major technology decisions, ensure you have clarity on your three circles. Technology decisions made without this clarity are likely to be reactive, fear-based, and ultimately wasteful. The good-to-great companies never began their transformations with technology.Pro tipFannie Mae's transition began in 1981 but it lagged behind in technology until the early 1990s. Technology became the 'second wind' only after the Hedgehog Concept was clear.WarningThoughtless reliance on technology is a liability. When grasped as an easy solution without deep understanding, technology simply accelerates your own self-created demise.
- Apply the technology decision treeFor each significant technology: Does it fit directly with your Hedgehog Concept? If yes, become a pioneer. If no, do you need it at all? If yes, achieve parity. If no, ignore it regardless of hype. This simple filter eliminates most technology anxiety.Pro tipWalgreens asked three specific questions about the Internet: How does it connect to our convenience concept? How can we tie it to profit per customer visit? How can we use it to enhance what we do better than anyone?
- Adopt a crawl-walk-run approachEven for technologies that fit your Hedgehog Concept, do not rush. Begin with small experiments (crawl), build understanding through internal dialogue and debate (walk), then commit fully once you understand how the technology serves your concept (run).Pro tipDuring the dot-com frenzy, when Walgreens lost 40 percent of its stock price, it paused and reflected instead of panicking. Within a year of launching its Internet initiative, its stock had nearly doubled.
- Pioneer with fanatical commitment once clarity is achievedWhen you do identify a technology that fits your Hedgehog Concept, invest aggressively. Walgreens spent over 400 million dollars on Intercom, including its own satellite system. Gillette invested 200 million dollars in manufacturing technology for Sensor with twenty-nine patents.Pro tipWalgreens eventually had its CIO be a registered pharmacist, not a technology guru. The Hedgehog Concept drove technology choices, not the other way around.
When drugstore.com launched at a 3.5 billion dollar valuation, Walgreens' stock lost 40 percent. Instead of panicking, Walgreens took a crawl-walk-run approach, methodically integrating the Internet into its convenience concept. It eventually built a site as sophisticated as Amazon.com while drugstore.com announced layoffs and lost nearly all its value.
Despite being the most celebrated case of technology-driven steel industry transformation, Nucor's CEO Ken Iverson did not even list technology in his top five factors. He attributed success primarily to cultural consistency and lack of bureaucracy. One executive said 20 percent was technology and 80 percent was culture.
The research team debated whether technology merited its own chapter. Brian Larsen argued it was just a special case of disciplined action within the three circles. Amber Young thought it was too small compared to findings like Level 5 and the Hedgehog Concept. The debate tipped when Chris Jones asked why good-to-great companies maintained balanced perspective on technology while most companies lurched about in fearful reaction. This question revealed an essential difference: great companies were driven by inner compulsion for excellence while mediocre companies were driven by fear of being left behind.
The most surprising finding was that Nucor, widely celebrated as a case study in technology-driven transformation, had a CEO who did not even list technology in his top five factors. Ken Iverson attributed only 20 percent of success to technology and 80 percent to culture.