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 / Winter 2004 / Issue 37(originally published by Booz & Company)


Bridging the Breakthrough Gap

Creating disruptions is fine, but mending them may be even better. The case for cautious inventiveness.

Illustration by Lars Leetaru
For most of human history, long-distance communication was a cumbersome affair. Documents had to be carried on foot or horseback, or in the holds of ships, and they often took weeks or months to arrive at their destination. Then, in 1835, a New York University professor and artist named Samuel F.B. Morse invented the telegraph, and the world changed. Suddenly, it was possible to send messages down wires and cables, instantaneously connecting people and businesses in different countries or on different continents.

The rise of the telegraph system was far from seamless, however. The infrastructure took many years to be installed, and users often had to struggle with gaps in the network. One of the most maddening of those gaps lay in the heart of Europe. The Belgian line terminated in Brussels, and the German line went only as far as Aachen. Messages had to be transcribed and carried over land across the 77 miles separating the two cities. But one small company saw a business opportunity in this problem. In 1849, it bought a flock of carrier pigeons and used them to fly messages between Brussels and Aachen, dramatically reducing transit times. Within a few years, the company had grown to become one of the leading telegraph agencies, specializing in the communication of time-sensitive financial information. Its name was Reuters.

There’s an important lesson in this story: When a disruptive new technology arrives, the greatest business opportunities often lie not in creating the disruption but in mending it — in figuring out, as Paul Julius Reuter did, a way to use an older, established technology as a bridge to carry customers to the benefits of the emerging technology.

When we talk about business innovation today, we tend to use terms like breakthrough and pioneering and revolutionary. But some of the greatest and most lucrative innovations are essentially conservative. They are brought to market by companies that are as adept at looking backward as looking forward, and that have the skill and patience to achieve the most commercially attractive balance between the old and the new. “Conservative innovation” may sound like an oxymoron, but it’s an idea that deserves to be a part of every company’s thinking.

Late Adopters
Some new technologies find commercial success rapidly. It wasn’t long after the invention of nylon in 1938 that the cheap, supple plastic supplanted silk as the fabric of choice for women’s stockings. In most cases, though, new technologies take hold slowly, advancing through a long series of technical and market barriers. The automatic telephone switch was invented by the end of the 19th century, but manual exchanges continued to be widely used for another 50 years. Facsimile transmission also became possible in the late 1800s, but it took a century for it to become commonplace. Consumer PCs were introduced in 1975, but even in 2000 only half of U.S. households owned one.

The “future,” in other words, arrives in fits and starts. There are several reasons. A new technology may be difficult to use, requiring specialized expertise. Or it may be plagued by bugs that reduce its utility. In the early days of railroads, trains had the annoying habit of going off the rails; it was only after wheels, couplings, and tracks had advanced and become standardized that train transport became reliable enough to be broadly adopted. Or, as with the telegraph, a new technology may involve the building of a physical infrastructure, requiring a lot of money and time.

Sometimes progress goes slowly not because of flaws or shortcomings in the technology, but because consumers resist its adoption. Early versions of new technologies are often prohibitively expensive, and that can restrict their use to a small slice of the market for many years. In other cases, buying a new technology requires abandoning an old and familiar one, something consumers are rarely eager to do. Years after color televisions had been introduced, many people happily continued to use their old black-and-white television sets. Mobile telephony was embraced relatively slowly in the United States because the country’s landline network was so reliable and ubiquitous. Who needed a cell phone?

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