The electronics industry is in flux. The recession has placed a stranglehold on economies and growth, product life-cycles continue to shorten, and organizations are laying off workers. With globalization and technological developments changing market dynamics, it is time for organizations to reassess their businesses and perhaps consider some radical transformations.
In management theory, transformational change is defined as an organization changing its fundamental beliefs and operations. It typically occurs for one of these reasons: legal, political, economic or technological conditions that change the basis for competition; a change in product life-cycles; or a change in internal company dynamics. (For more, read “Managing the unsteady pace of organizational evolution”, by M. Tushman, W. Newman and E. Romanelli.)
For any of these to take effect (either as prompts, or as actions) they must resonate with organizations and the electronics engineers they employee.
In the electronics design world, shifts in the “basis for competition” are already happening. Emerging countries are starting to enter the electronics industry, with vigor. This rapidly changing global market has been made worse by the current recession, but these changes were happening before the recession hit. This places increasing pressure on organizations. Manufacturing, sunset industries and low-skilled work have traditionally been sent overseas, not high-technology. But the reality is that what has set electronics designers apart in the past may do so no longer.
It is important that organizations redefine their fundamental values and restructure their strategies to reflect, and even take advantage of, the economical and political conditions. With this in mind, decision makers need to ask themselves: what secures my position as a market leader? If the answer is ‘price’ or ‘first-to-market’, then the organization might want to rethink how it interacts with its market. These strategies are not sustainable and too easily applied elsewhere.
So, with this in mind, how do organizations begin to shift the basis of competition in their favor? What will work?
Organizations and electronics designers need to focus on real and sustainable differentiators such as creativity and innovation, because while skills can be off-shored, ideas cannot. Decision makers need to remember that it is the implementation of ideas that separates one product from the next, the world beater from the also-ran.
There is an interesting dynamic occurring in the electronics industry: the life-cycle of a product hardly lasts longer than a fashion season. This may not be new, but the current economic conditions hone its effect as organizations seek to break through with products that customers will buy despite the downturn. This poses an interesting problem for the electronics industry. Consumers are the ones powering change. So the customer’s perspective needs to be at the centre of the design concept, the design process, and the design approach and environment.
And what’s wrong with this? The biggest mistake is to fall into the trap of thinking within an existing paradigm. Henry Ford put this into perspective when he said, “If I had asked people what they wanted, they would have said faster horses.” The real job for electronics designers is to create something new that people desire and that cannot be provided by anyone else. The iPhone is a classic example of this. It wasn’t smaller or faster, it simply changed the way consumers experienced a convergence of existing concepts in a new way. (And it’s just changed again.)
So how do organizations and electronics designers revolutionize product development and reclaim it for themselves?
They need to throw out the rule books and start focusing on how customers will interact with the product. There needs to be an experimental and collaborative design process. Electronics design has historically centered on a very formal and sequential process, whereby each designer is provided with a list of specifications and constraints relating to particular tasks. A designer completes each task, and then passes it (often over a literal wall) to the next engineer to complete the next task. This has become much too bureaucratic. It’s an approach that limits collaboration and creativity between teams. Try something new in one domain and you run the risk of stalling the project and infuriating your peers. It is a rigid process that completely disregards a fluid market.
Without the freedom to explore ideas and experiment, it becomes too easy to fall into old, restrictive patterns of thinking. For true innovation to occur, there needs to be an open-minded culture supported by tools, team structures and work processes conducive to flexibility. Because, in the end, it is design innovation that ultimately sets a product and user experience apart.
However, making these kinds of radical transformations can be difficult. Work cultures and procedures are generally ingrained in the psyche of employees. Implementing these changes requires an overhaul in thinking, and to do this, electronics designers need to ‘unlearn’ old patterns as well as adapt to new techniques. It also requires the support of continuous education and up-to-date tools to be successful. And while this may be difficult at first, it is a necessary change. This ingrained inertia in the electronics design industry needs to be challenged, because without complete transformation, organizations run the risk of being quickly left behind. (Having quoted Henry Ford elsewhere in this article, no-one wants to be the General Motors of the electronics design world.)
So, when thinking about product differentiators and business strategies, organizations need to think beyond current processes and start thinking radically, because today’s models are quickly becoming obsolete in this rapidly changing global market.
