We can no longer envision the future by extrapolating the present.
He probably wouldn’t, but Robert Taylor could lay claim to being the best-ever manager of innovation. In the late 1960s, Taylor headed the office at the Advanced Research Projects Agency that oversaw implementation of the first four nodes of the Internet. He then moved to the Xerox Palo Alto Research Center where he presided over a group that, in a period of just a few years, invented, or developed into useful form, technologies that now account for an astonishing chunk of the market capitalization in the computer industry. Still, Taylor today replies impatiently when people suggest that the Internet developed quickly. “They’re crazy,” he says. “It took forever.”
Indeed, if you consider that the Internet first appeared in December 1968 and business first took serious note of it with the Netscape initial public offering in August 1995, the 27-year interval does seem surprising. The question arises: Why do companies have trouble shifting technological paradigms, and why is the gestation period for the use of technologies in business often a matter of decades?
To try to answer those questions, we created the Harvard Business School Internet2Business Applications (or “Biz-Apps”) Group in 2003. Composed of leading academics and business leaders, the group has found that the impediments to correctly identifying future billion-dollar market segments in communication technologies are formidable. For one thing, in both the commercial and academic realms, there is a tendency to adopt existing industries as frames of reference for new technologies rather than envisioning new industries or new forms for existing industries. Similarly, there is a tendency to anchor thinking in existing customer segments or to use others’ ideas to extend one’s own favorite thesis rather than to engage in true recombination of ideas. There is also a tendency to think in terms of a single “killer app” even though the next big thing is likely to be a combination of applications.
Biz-Apps has concluded that there are two practices vital to overcoming these and other limiting tendencies in the pursuit of new technology-enabled businesses.
Simply try things out. The next killer app will emerge through a process of “recursive visioning and innovative doing.” Whereas the technologies of Eli Whitney, Henry Ford and Frederick Taylor reduced the variable cost of manufacturing new products, today’s information technologies (computer-aided prototyping, simulation, design packages) have radically reduced the fixed and design cost of simply trying things.