Riding with the Technology Peloton

One of the most important decisions that technology leaders make is when to strike out and leverage new and unique technologies for competitive advantage and when to stay with the rest of the industry and stay on a common technology platform. Nearly every project and component contains a micro decision of the custom versus common path. And while it is often easy to have great confidence in our ability and capacity to build and integrate new technologies, the path of striking out on new technologies ahead of the crowd is often much harder and has less payback than we realize.  In fact, I would suggest that the payback is similar to what occurs during cycling’s Tour de France: many, many riders strike out in small groups to beat the majority of cyclists (or peloton), only to be subsequently caught by the peloton but with enormous energy expended, fall further behind the pack.

In the peloton, everyone is doing some of the work. The leaders of the peloton take on the most wind resistance but rotate with others in pack so that work is balanced. In this way the peloton can move as quickly as any cyclist can individually but at 20 or 30% less energy due to much less wind resistance. Thus, with energy conserved, later in the race, the peloton can move much faster than individual cyclists. Similarly, in developing a new technology or advancing an existing technology, with enough industry mass and customers (a peloton), the technology can be advanced as quickly or more than quickly than an individual firm or small group and at much less individual cost. Striking out on your own to develop highly customized capabilities (or in concert with a vendor) could leave you with a high cost capability that provides a brief competitive lead only to be quickly passed up by the technology mainstream or peloton.

If you have ever watched one of the stages of the Tour de France, what can be most thrilling is to see a small breakaway group of riders trying to build or preserve their lead over the peloton. As the race progresses closer to the finish, the peloton relentlessly (usually) reels in and then passes the early leaders because of its far greater efficiency. Of course, those riders who time it correctly and have the capacity and determination to maintain their lead can reap huge time gains to their advantage.

Similarly, I think, in technology and business, you need to choose your breakaways wisely. You must identify where you can reap gains commensurate with the potential costs. For example, breaking away on commodity infrastructure technology is typically not wise. Plowing ahead and being the first to incorporate the latest in infrastructure or cloud or data center technology where there is little competitive advantage is not where you should invest your energy (unless that is your business). Instead, your focus should be on those areas where an early lead can be driven to business advantage and then sustained. Getting closer to your customer, being able to better cross-sell to them, significantly improving cycle time or quality or usability or convenience, or being first to market with a new product — these are all things that will win in the marketplace and customers will value. That is where you should make your breakaway. And when you do look to customize or lead the pack, understand that it will require extra effort and investment and be prepared to make and sustain it.

And while I caution selecting the breakaway course, particular in this technology environment where industry change is on an accelerated cycle already, I also caution against being in the back of the peloton. There, just as in the Tour de France when you are lagging and in the back, it is too easy to be dropped by the group. And once you drop from the peloton, you must now work on your own to work even harder just to get back in with the peloton. Similarly, once an IT shop falls significantly behind the advance of technology, and loses pace with its peers, further consequence incur. It becomes harder to recruit and retain talent because the technology is dated and the reputation is stodgy. Extra engineering and repair work must be done to patch older systems that don’t work well with newer components.  And extra investment must be justified with the business to ‘catch’ technology back up. So you must keep the pace with the peloton, and even better be a leader among your peers in technology areas of potential competitive advantage. That way, when you do see a breakaway opportunity for competitive advantage you are positioned to make it.

The number of breakaways you can do of course depends on the size of your shop and the intensity of IT investment in your industry. The larger you are, and the greater the investment, the more breakaways you can afford. But make sure they are truly competitive investments with strong potential to yield benefits. Otherwise you are far better off ensuring you stay at the front of the peloton leveraging best-in-class practices and common but leading technology approaches. Or as an outstanding CEO that I worked for once said ‘There should be no hobbies’. Having a cool lab environment without rigorous business purpose and ongoing returns (plenty of failures are fine as long as there are successful projects as well) is a breakaway with no purpose.

I am sure there are some experienced cyclists among our readers — how does this resonate? What ‘breakaways’ worked for you or your company? Which ones got reeled in by the industry peloton?

I look forward to hearing from you.

Best, Jim Ditmore

 

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