Four ways to bring architectural innovation to your technology
By Joe Mariani, Center for Integrated Research
When technology can’t give you a strategic advantage, connections can. Recent research on how to create a strategic advantage in manufacturing shows that proprietary technology may not always create competitive advantage. In fact, it is the connection—the architectural innovation—combined with technology that may provide the greatest opportunity for businesses.
|Look at these two airplanes and list all the differences. If you are having trouble, it is only natural, because they are in fact identical copies. The airplane on the left is the American B-29, the first plane capable of delivering nuclear weapons and source of competitive advantage for US military in the early cold war. On the right is the Soviet Tupolev Tu-4, a bolt-for-bolt copy of the original.1 The technology that was to give the U.S. an advantage for decades was copied in under five years.
Spot the difference?
This story is as relevant today as it was when the Tu-4 first soared over Red Square in 1947. However, the lessons have less to do today with Cold War politics, and more to do with how businesses approach the explosion of digital technologies now entering the market.
From sensors to robots to 3D printers, there is no shortage of technologies that pundits promise will revolutionize how manufacturing is done and give the company that adopts it early a significant advantage over competitors. The problem is that technology alone cannot be a source of competitive advantage because it can be easily copied. Even complex or classified designs can quickly be stolen or copied by a competitor—that is the lesson of the B-29 and Tu-4. Today the problem is magnified. The flow of technology around the world has never been faster and copying digital technologies never easier.2 And if every company in an industry has a technology, it certainly cannot be a source of competitive advantage.
Connections are Key to Strategic Advantage
If a technology is ubiquitous in an industry, how useful can it be? We see examples everywhere of traditional businesses disrupted by new technology-focused entrants. So if technology alone cannot account for the success of these disruptors, what can? The answer may come from Rebecca Henderson, a professor at MIT, and Kim Clark, a professor at Harvard, who articulated the idea that what was important was not just the technology, but the connections between the technologies—something they termed architectural innovations.3 Their research showed that advantage was the sum of both the technology at work and the connections between those technologies. Change in technology alone was likely to yield merely incremental results; however, a change to the architecture was required for any truly revolutionary change (see figure 1). For example, a leading company in an industry could enjoy a benefit from a technology that simply improved an existing component (the change from black and white to color film for example), but when the fundamental ways all of the technologies worked together changed, those leading companies were often thrown for a loop (the change from physical film to digital cameras).
Figure 1. To create strategic advantage both technology and the connections between those technologies are typically needed
Take Southwest Airlines, for example. It is known for being a successful low-cost carrier due to a number of innovations, including no assigned seats and speed boarding, a single type of aircraft to reduce maintenance and fuel hedges to control expenses. It wasn’t long before other airlines tried to copy these innovations and offer their own low-fare offerings. However, by 2003, they’d all failed and been replaced or rolled back into the parent airline. The reason was because while they could copy technical innovations, they could not likely see or did not understand the architecture that made it all work. For example, they may not have immediately recognized the value of Southwest’s employee-first culture that helped boost productivity, keeping the airline profitable even as labor costs increased across the industry.
Four Ways to Architect an Advantage
While finding new technologies can be simple, discovering new architectures can be a much more complex process. So how can a manufacturer uncover the architecture that will give the desired competitive advantage? There is no single path, but research points to a few key signposts:
While this level of organizational change can be daunting, there is one more positive lesson from the story of the B-29. After the technological advantage of the B-29 was erased by the copy of the Tu-4, it forced the Americans to go back to the drawing board and come up with a new strategy to use all their technologies together—in short to create an architecture innovation. So, if you have made an investment in new technology, but are not yet achieving all the promised rewards, perhaps it is not time to give up on technology, but rather time to try a little architecture.
1Hardesty, Von. Made in the USSR: Of course they copied it. The two airplanes could have been twins. But was the Soviets’ Tu-4 truly an exact duplicate of the Boeing B-29? Air and Space Magazine. March 2001.