Thinking about Legacy Technology

This quote from Willy Shih’s HBR article gets you thinking

Technologies like 3-D printing, robotics, advanced motion controls, and new methods for continuous manufacturing hold great potential for improving how companies design and build products to better serve customers. But if the past is any indicator, many established firms will be slow to adjust because of a formidable obstacle: legacy assets and capabilities that they are reluctant to abandon.

The challenge is most extreme when adopting a new technology means that old skill and knowledge sets (competences) are no longer of value. New ones are required.  And the challenge is more daunting when investment in old capacities has not been fully amortized. In these settings short term thinking crowds out the long term.

Market players who have nothing to lose tend to make smarter choices with respect to embracing new technologies. Think for example of German and Japanese steel makers after the second war.

But what can the rest of us do? We should become more sensitive to “functional” obsolescence. That is when whatever we are using is less good than what a competitor is using.  And we need to balance how we experiment with how we exploit our current technologies.

The above strategic challenge applies not just to equipment. it applies as well to intellectual tools.



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