If the railroads had realized they were transportation companies, they’d be airlines today!

Last week at work I was promoting the importance of thinking through carefully the business need we were trying to satisfy with our products so that we could watch out for new technologies that might meet that need and disrupt our existing services.  My impression is that all too often we manage our products in technology terms and took only at similar technology alternatives that we are competing with,  this is a big mistake in the long term.  It’s also a mistake to continue to expect customers to value market leading attributes of our services that they valued in the past,  as often a lower price, functional enhancements or convenience will be more attractive to the user over time.   Clay Christensen describes all of this very well in his books on innovation and there is a great talk by Clay available on IT conversations and a Gartner interview as well as a number of good articles here and here. 

Last week I also happened to read a really useful example of this process at work on the O’Reilly Radar blog, here is a snip from Tim’s post:

The failure to think about what job your product does for the customer, rather than the tools or approach you’ve historically used to do that job, is the reason why many established companies fail to make the transition when there is a technological change. Hence the old saw, “If the railroads had realized they were transportation companies, they’d be airlines today.” (Well, maybe yesterday, as the airlines are suffering their own business transition. Maybe they’d be Fedex/Kinko’s today. Or Google/Skype.)

I found that people related well to the examples that Tim uses in this post and it’s more approachable as an example those used by Clay.