• Lauren Sterna
• Craig Crowell
• Collin Gillaspie
• Jennifer Eccles
• Scott Addison
• Clint Chapman

.
 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.

T ECHNOLOGY AND THE
H EDGEHOG C ONCEPT
 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).

T ECHNOLOGY AND THE
H EDGEHOG C ONCEPT
 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.


ECHNOLOGY
CCELERATORS IN
THE
OOD
TO
REAT
OMPANIES
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.

ECHNOLOGY
CCELERATORS IN
THE
OOD
TO
REAT
OMPANIES
 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
Hedgehog Concept?
 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
 Fannie-Mae
 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

T
T
T
 Albert Einstein named “Person of the
20 th 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

T
T
T
 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

N UCOR AND B ETHLEHEM
S TEEL
 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.

T ECHNOLOGY AND THE FEAR
OF BEING LEFT BEHIND
 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

T ECHNOLOGY AND THE FEAR
OF BEING LEFT BEHIND
 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

ADVANCES IN
PRODUCTS
 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)

ADVANCES IN
DISTRIBUTION
 Coke Free-style (touchscreen dispensers)
 Climate Friendly Refrigeration with Greenpeace

ADVANCES
WITHIN
 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
Treatment Plant
 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 Trap
 Technology and the fear of being left behind