Drugstore.com launched and online pharmacy and mailed prescriptions to customers causing
Walgreens stock to drop 40%
Walgreens coined the phrase “crawl, walk, then run” referring to entering the internet market slowly and picking up momentum along the way.
Drugstore.com did the opposite and went from run, walk, then crawl. Walgreens carefully planned their internet strategy and won the head to head with drugstore.com.
Technological sophistication is present in every good to great company, but Hedgehogs pioneer the application of carefully selected technology, not the technology itself.
pioneered the application of bar code scanners, it helped them keep up with inventory by linking backroom storage with frontline purchases.
pioneered laser welding on relatively inexpensive items that are used repeatedly (razor blades).
Good companies (Foxes) apply new technologies only after they have been pioneered by better companies.
Other companies (Wal-mart) decided to follow Kroger’s successful example by implementing the bar code system to keep track of inventory.
Abbott- computer technology to increase economic denominator of profit per employee.
Circuit City- sophisticated point-of-sale and inventorytracking technologies.
Fannie Mae- sophisticated algorithms and computer analysis to more accurately assess mortgage risk.
Gillette- sophisticated manufacturing technology.
Kimberly-Clark- application of manufacturing-process technology to support their passionate pursuit of product superiority
Kroger- first to experiment with scanners, which it linked to the entire cash-flow cycle.
Nucor- application of the most advanced mini-mill steel manufacturing technology.
Philip Morris- packing and manufacturing technology.
Pitney Bowes- advanced technology in the mailroom.
Walgreens- application of satellite communications and computer network technology.
Wells Fargo- application of technologies that would increase economic denominator.
Does the technology fit directly with your
Yes → Become a pioneer in the application of that technology
No → Then ask, do you need this technology at all?
Technology must create a clear
Hedgehog Concept and stay within the three circles in order to make a great company.
Unsustained pioneering in the application of technology
Chrysler (computer-aided design)
Made excellent use of advanced computer-aided and other design technologies, but failed to link those technologies to a consistent Hedgehog Concept
CEO, Jim Johnson and lead technology audit consultant,
Bill Kelvie, took Fannie Mae from a 2 (nearly Stone Age technology) to a 3.8 (almost cutting edge)
Technology was a key part of what Fannie Mae leaders called “the second wind” of the transformation and acted as an accelerating factor
Albert Einstein named “Person of the
Century” by Time Magazine
Known for his advances in science and technology
20 th century will be remembered for civil rights, democracy, and mostly technology
When good to great leaders were asked the top 5 factors in transition- technology was not one in 80% of cases
Mediocrity results from management failure not technology failure
Technology is not the primary cause of greatness or decline
Technology cannot turn a good firm into a great one or prevent disaster
Nucor was known as one of the most aggressive pioneers when it came to the application of mini-mill steel manufacturing
Became a cornerstone case at business schools
“The primary factors were the consistency of the company and our ability to project its philosophers throughout the whole organization, enabled by our lack of layers and bureaucracy.”
Bethlehem Steel tried the same type of technology, but it did not work as well.
Technology was the accelerator of Bethlehem’s demise.
Good to great companies were not motivated by fear. They were driven by the fear of what they didn’t understand.
Good to great companies are motivated by a creative urge and an inner compulsion for excellence
No amount of technology can make you a level 5 leader or company
In the late 1990’s during the technology bubble many companies were worried about how their company would adapt to the new technology
Great companies responded quietly and calmly. Others were fearful and frantic
Coke teams up with Chromocell Corp. to develop innovative sweetener technology.
Cutting Carbon Emissions
Creating Sustainable Packaging (85 percent of our volume delivered in recyclable bottles)
Coke Free-style (touchscreen dispensers)
Climate Friendly Refrigeration with Greenpeace
The Coca-Cola Company announced that it has agreed to test fuel cells powered by environmentally friendly biogas to power its Odwalla juice packaging plant in Dinuba, Calif.
Panama’s 100 Percent Green Water
First LED-Certified Coca-Cola Bottling
Facility Opens In Baton Rouge
Technology and the Hedgehog Concept
Hedgehogs pioneer the application of carefully selected technology
Technology as an Accelerator
Does technology fit directly with your Hedgehog Concept?
Technology and the fear of being left behind