One mechanism for extending the life of the old is to borrow from the new. Daniel Snow, a Harvard Business School professor, says that the useful life of the carburetor was extended significantly by incorporating technology from electronic fuel-injection. Interestingly, he finds that only companies that were also developing electronic fuel-injection technology benefited.
The old can also create a bridge to the new through hybrid products that combine elements of each.
Research on electric vehicles has been under way for many years, but a direct leap from gasoline-powered vehicles to electric vehicles has proved challenging.
“Hybrids were an easy way for carmakers to start this transition,” says Felix Kramer, founder of CalCars, a nonprofit organization.
Because the required shift in behavior is minimal, many drivers have been willing to make the change. Later, as these drivers become accustomed to the electric-vehicle features of hybrids — the quiet ride, for example — they will presumably become more willing to acquire a purely electric vehicle.
“Once they started down that road, it pointed to the future of plug-in hybrids,” said Kramer, whose organization promotes the plug-in vehicles.
While hybrids like the Toyota Prius use electricity as a supplement, plug-in hybrids go the next step and rely primarily on electricity, with gasoline as the secondary energy source.
“Because of plug-in hybrids, the supply chain and all the technologies will improve, so we gradually get batteries that are cheaper with longer range, and eventually we get all-electric vehicles,” Kramer said.
Of course, managers still need to know when to move on. When steamships began to compete with sailing ships for freight traffic, the sailing-ship producers responded with what the technology historian S.C. Gilfillan described in his 1935 book, Inventing the Ship, as a “noble flowering of the sailing ship.”
But the producers went too far. By 1902, with the building of the Thomas W. Lawson, the largest sailing ship ever, with seven masts and 25 sails, sailing technology had reached a point of diminishing returns, and the competition with steamships had already been lost.
Ultimately, it’s all about balance. The future of a company depends on success in the new. But the old needn’t be framed as simply as a “cash cow” or as a source of inertia holding back the company’s creative juices. Selective, intelligent innovation in the old may just hold the key to the future.
Mary Tripsas is an associate professor in the entrepreneurial management unit at the Harvard Business School.
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