Is technology the only lever for breakthrough performance?

Breakthrough performance is something that companies seem to be seeking, even desiring to realize, nevertheless it is being searched for with preconceived notions.

Maybe we should start the discussion defining what breakthrough performance is – it is a jump in one, or more, performance indexes. To be deserving the title breakthrough this jump should be of at least an order of magnitude. Therefore, any improvement of less than 25% in any given performance indicator, can not be considered a breakthrough.

It seems that there are areas where we do not seek breakthroughs at all (at least not with the commitment we have in other areas), possibly because we grew to believe they are no likely to happen in these areas. The most interesting one is breakthrough in business performance. If one evaluates business growth forecast (with the exception of start-ups) most companies will forecast that next year top line growth will be either equal to last year, or equal to the rate of growth of the specific industry.

In other areas, breakthrough performance seem to be directly linked to technology – developing and/or acquiring technology that can perform much better than the existing one. IT and capital equipment are the key technologies at the base of this endeavor.

To me, achieving breakthrough performance in any performance indicator is only relevant if it leads to improving competitiveness and business performance. What is the value of reducing lead-time, for example, if it does not lead to improved competitiveness and thus sales and profits? (of course some may claim, it is necessary just to stay in the game, but if you need breakthroughs just to stay in the game,you have a much more serious problem).

If we look at the performance itself, it is not very common to see companies that demonstrate breakthrough performance, even when they acquire technology that has the capabilities to deliver such a performance. Why is it?

I believe it is because of two key contributors; the first is that technology alone cannot deliver breakthrough performance to a system as a whole and the second is that often times it is not required for achieving breakthrough performance.

Any new technology is always added to an existing system, a system that operated without this technology before. This system had rules that enabled it’s operations without the technology. The challenge is to change these rules, otherwise the new technology cannot realize it’s benefits. If you traveled in “old” Europe you would see that in the past there was a construction rule (no one ever wrote it, i think…) the rule was – “Do not build tall buildings”. Well, there was no technology enabling building and even more so, using of tall buildings. Than came the enabling technology. What would you imagine as the value of this technology if the old rule of “Don’t build tall buildings” would have been sustained? Well, the same is true for any new technology, and especially for one that is supposed to be leading to breakthrough performance. If you keep the old rules, you cannot reasonably expect to realize breakthroughs.

Furthermore, before the need to change technology, more often than not, there are rules that can be changed that will improve processes to the extent breakthrough performance can be realized. The problem here is that we tend to be skeptical about this as our experience shows it is very unlikely. So we tend to give up, before we even start to evaluate this path. However, some of the rules we have can be changed to realize breakthrough without any new technology. Our disbelief in that blocks this avenue to start with.

As a result, we rarely realize breakthroughs as a result of new technology and almost never explore the possibility of breakthroughs without technology. The reality of no breakthroughs is nourishing the perception that breakthroughs are not likely and thus fuels the attitude of “let’s not waste our efforts there”. And this is sad, as almost anyone has the opportunity for breakthroughs. We just need to be determined enough and with enough courage to challenge ourselves. Don’t wait for technology to deliver breakthroughs, the breakthroughs are within reach by challenging business rules and changing them, even if “we always did this that way” and even if “everyone else is following them”. Maybe especially because of that??

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