Responding to Disruptive Technology

Reference: Lucas, H.C. and Goh, J.M. (2009) Disruptive technology: How Kodak missed the digital photography revolution, Journal of Strategic Information Systems 18(1), 46-55.

I was drawn to this paper because I study innovation. My research concerns how information technology can be used to improve the innovation process, but I am also interested in understanding how companies can and should respond to innovations in information technologies that could affect the value of their products and services and ultimately their financial health.

The authors propose two extensions to Christensen’s well known treatises on disruptive technologies. The first is the notion that a firm’s response to disruptive technologies is a “struggle between employees who seek to use dynamic capabilities to bring about change, and employees for whom core capabilities have become core rigidities.” In examining Kodak, the authors focus on middle management as being most problematic and resistant to change, being dependent on core competencies that have become core rigidities. The concept of core rigidities is rooted in Christensen’s work and could hardly be considered an extension. The role of dynamic capabilities, however, does not come directly into play in Christensen’s work. Interestingly, Christensen refers to dynamic capabilities in “The Innovator’s Solution” (Christensen & Raynor, 2003, p. 206), but dismisses the concept as an over-broad categorization of organizational processes. Nevertheless, the suggestion that dynamic capabilities can help companies respond to disruptive technologies is not entirely new. For example, the March issue of the Journal of Engineering and Technology Management is devoted to this principle, as reflected in the introductory article, “Research on corporate radical innovation systems - A dynamic capabilities perspective: An introduction,” by Salomo, Gemünden, and Leifer.

The second “extension” proposed by the authors is consideration of the role of organizational culture. The authors argue that if organizational culture promotes hierarchy and maintenance of the status quo, it would impede the change required to react to disruptive technologies. It’s not clear that this is really an extension of Christensen’s work, specifically because Christensen acknowledges the role of culture in creating core rigidities (see, for example, HBS Note 9-399-104, “What is an Organization Culture,” Rev August 2, 2006).

The Kodak case is an interesting one. Implicit in the analysis is that Kodak failed to respond adequately to the digital revolution. But, it’s not clear that Kodak could have done anything more than it did. Prior to the digital revolution, Kodak’s multi-billion dollar revenue stream depended primarily on sales of its film, developer chemicals, and halide paper used to make photographic prints. These sources of revenue were destined to disappear. In the digital world, other sources of revenue exist, but they are largely commoditized, with limited revenue generating capability. What is surprising is that Kodak has, nevertheless, managed to emerge as a viable business, unlike Polaroid, for example. Although it doesn’t have a dominant position, as it did when photography was based solely on film, it reacted quickly to the digital revolution, with early patents on digital photography and acquisition of companies such as Ofoto and Scitex.

Does Task-Technology Fit Matter?

Reference: Fuller, R.M. and Dennis, A.R. (2009), Does fit matter? The impact of task-technology fit and appropriation on team performance in repeated tasks, Information Systems Research 20(1), 2-17.

This is an important piece of research. It’s not often that new research dispels or substantially modifies well accepted models of how things work. This is one such example. Prior research has supported the intuitive belief that the fit between a technology and the task to which it is applied significantly affects success in performing the task. Presumably, the poorer the fit between a task and the technology used to perform it, the worse the performance of the task. This “Task-Technology Fit” theory was first formalized in MISQ in 1995 (Goodhue) and has been extensively analyzed, developed, and verified by subsequent research. However, as Fuller and Dennis show, the TTF theory is incorrect when applied to a repeated task. It turns out that by the third time the task is repeated, users will have figured out how to adapt the technology and the way the task is accomplished so that there is no significant difference in their performance or their perception of the technology. While poor-fit teams failed to equal the performance of well-fit teams in initial task performance, the differences between them melted away over time, becoming indistinguishable by the third repetition of the task!

This finding, while surprising and counter-intuitive, has some theoretical grounding. It is rooted in Adaptive Structuration Theory (AST) (Desanctis & Poole, 1994). AST holds that in performing a task, people adapt the elements of the tools that they use, the features they select, the rules they apply, and the way that they apply them. This process, called appropriation, allows them to improve their performance over time. Prior research has, indeed, recognized the role of appropriation in explaining the performance of teams using information technology. The “Fit-Appropriation Model,” (FAM) (Dennis et al, 2001) holds that performance is affected by both technology fit and appropriation. But, until now, there was no recognition of the possibility, much less the likelihood, that appropriation would ever dominate over fit, and certainly not in such a short period of time.

This research is limited to a single context, task, and technology, and used students as research subjects. Generalizability still needs to be established. However, assuming that the findings stand up to further scrutiny, they are ground breaking.