Rahul Kapoor, Management, the Wharton School, and Thomas Klueter, IESE Business School
MIT Sloan Review, Winter 2017 Issue
Summary: Getting an innovative technology to market can be a challenge for an established company when the technology runs counter to the company’s current business model. But the right organizational design can help.
The emergence of new technologies, while holding great promise for society, often threatens the viability of established companies. There are plenty of well-known examples of this, such as the Eastman Kodak Co. and Polaroid Corp. and the advent of digital photography. In many of these cases, the core challenge for established companies stems not from a lack of recognition of or investments in emerging technologies. Instead, it stems from the challenge of commercializing an emerging technology whose economic attractiveness with respect to the company’s existing business model is not at all obvious in the near term.
Today, managers in many prominent sectors, including autos, financial services, energy, and health care, face the challenge of pursuing emerging technologies that carry a high degree of uncertainty with regard to their economic viability and their companies’ competitive position. However, what is sometimes lacking is an understanding, guided by systematic empirical evidence, of what managers can do to overcome this challenge. Our research offers some insights.