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Is Technology Killing Your Company?

The common high-tech trap many businesses fall into--and how to steer clear of it.

People nearby gasped when he said, "You'd be a lot better off if you just lost 10 or 20 pounds."

Let's come back to that in a moment.

Wherever you look, it can seem like adopting new technology is the key to success. But don't be fooled: Chasing new technology could be the key to your failure, especially when you spend more time searching for improved "stuff" than you do working to improve yourself.

Equipment Can Only Do so Much

Take cycling. The use of carbon fiber and advanced aerodynamics has made bicycles incredibly sophisticated--and expensive. Go to a triathlon, even an entry-level "sprint" triathlon, and you'll see hundreds of $6k, $8k, and $10k bikes. Even the most casual of competitors spend thousands of dollars pursuing incremental performance gains. High-tech is the norm, not the exception.

A couple years ago I did a triathlon with a friend who's 1) a professional cyclist and 2) way too candid for public consumption.

A group formed around him in the staging area. One of the participants, a rather portly gent, talked about buying a $9,000 bike. "A lighter bike will definitely be worth it," he declared, obviously confident a pro cyclist who rides a cutting-edge bike would agree.

"Oh, hell no," my friend said. "If I were you I wouldn't waste money on a lighter bike. You'd be a lot better off if you just lost 10 or 20 pounds."

And with that the group dispersed.

Later I said, "That was harsh."

"Maybe," my friend replied. "But everybody looks for the next best thing instead of looking in the mirror, probably because it's easier. Unless you're at the top of your sport, equipment is the least of your worries. You have plenty of room to improve yourself first. But, of course, that takes a lot of work."

The 'Right' Tools for the Job

Businesses do the same thing. During a tour of a manufacturing plant I saw comprehensive data collection systems, sophisticated automation, and intuitive man-machine interfaces.  They clearly spared no expense in search of process improvement.

But those investments had not impacted the bottom line. Productivity was significantly lower than the most conservative benchmark. Waste was horrible. Workers stood idle for much of the day.

I asked the plant manager the obvious question. "Well," he huffed, "you have to understand that as an organization we are committed to giving our employees every tool they need to do their jobs."

That's an admirable but often misguided approach. For example, they planned to spend $135,000 on computers with faster processors even though shop-floor employees only use spreadsheets and simple databases, so processor speed is a non-issue.

Other plants in the same industry using limited automation, manual data collection systems, and buttons and knobs instead of touch screens are significantly more productive. They spend money where it pays off and let skill, experience, and hard work take care of the rest.

The Gut Check Before You Buy

Buying new simply for the sake of new is always a stupid investment. Buying a new bike doesn't automatically transform someone into a better rider. Buying new technology doesn't automatically transform you or your company. Every technology investment--in fact, every investment--should result in savings and quantifiable improvements.

Technology is only valuable if it results in faster, cheaper, or better. If not, it just sucks up time and money that could be put to better use somewhere else.

And sometimes it even covers up larger problems--ones that could eventually kill your business.

Look in your business mirror. Determine what you should improve on your own. You can almost always do a lot better than you are with what you already have.

Make wringing every last performance drop out of yourself business as usual. Then seek the next best thing, knowing you'll wring every possible benefit out of it, too.

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Last updated: Jun 5, 2012

JEFF HADEN | Columnist

Jeff Haden learned much of what he knows about business and technology as he worked his way up in the manufacturing industry. Everything else he picks up from ghostwriting books for some of the smartest leaders he knows in business.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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