Powerful Techniques Are Risky

I have observed that businesses often don't like "powerful" ideas because they are too risky from a business perspective. If done wrong, they can be very problematic. They also make recruiting more difficult because the ability to use and debug the powerful technique may be beyond what a manager or colleagues can test and interview for. They are sort of like the financial derivatives of software design: you can make a lot of money off them, but when things go wrong with them they really go wrong.

Businesses usually don't like that kind of risk, especially larger ones. Smaller businesses sometimes take such risks because they are willing to take a gamble to get a jump on the competition. But, larger institutions don't have the digestive system for such because managers are more often chewed out for what goes wrong stronger than they are rewarded for what goes well. They'll often favor "slow but reliable", over high average productivity but "flaky".

--top

I have observed that businesses which avoid "powerful" ideas often lose competitive advantage to those which effectively leverage such ideas to improve productivity, sales, or product quality. Indeed, when things go wrong, they really go wrong, but when they go right, they really go right.

For example, witness the automotive industry in the 70s and early 80s: American manufacturers lost their competitive advantage to Japanese and European auto companies which effectively leveraged the "powerful" ideas of (a) compact fuel-efficient cars, and (b) innovative management and engineering techniques that improved product quality.

This is largely because Japan had about a dozen or so car companies, while the US had just three. This created an oligopoly in the US with wink-wink agreements between them. There's some interesting stories about such wink-wink that I'll try to link to.

In the 70s, there were only three Japanese car manufacturers worth mentioning: DAT Motors (later Nissan), Toyota Motor Corporation, and (to a lesser extent) Honda Motor Company Ltd. Fuji Heavy Industries Co. (makers of Subaru), Mazda Motor Corporation, and Mitsubishi Group were not especially significant. This compares well to the US's Chrysler Corporation, Ford Motor Company, General Motors Corporation, and American Motors Corporation at the same time. The American companies' reluctance to innovate was well noted.

This is because the Japanese government tried to "cull the herd". But this was just before, perhaps during, the 1970's Japan car boom, so the competitive nature was still alive (based on a dozen co's). Thus, technically you are correct, but the culling had not been around long enough to make them complacent. The big-3 had been the big-3 for 2 or 3 decades.

Also, in my experience, if the system is the "main line of business", the company is more likely to take some risks, especially if they feel they are "falling behind". If it is considered mainly a side utility, such as an internal equipment tracking system, then risk is less likely. Most likely they'll try to outsource that side operation rather than overhaul the internal one if they are not satisfied with it. Very few organizations want "cutting edge" accounting systems or even plumbing techniques, for example; they want predictable tried-and-true in those areas.

EditHint: There are similar existing topics such as StaffingEconomicsVersusTheoreticalElegance and GreatLispWar such that perhaps this topic can be folded into them. I forgot this topic existed. However, they are kind of long already. -t