A Cambridge professor has identified Deutsche Telekom as a telecoms dinosaur that "lags in adaptability" and suffers an "internal inability to move faster"

© Flickr/CC-licence/Dave Catchpole

© Flickr/CC-licence/Dave Catchpole

Telecoms dinosaurs trundling about in the plashy fens of today's technological and organisational manifestation of Jurassic Park are known to be an endangered species. Seemingly unable or unwilling to adapt to the strange new world they now find themselves inhabiting, it is generally agreed that for some at least, extinction beckons.

Journalists and analysts alike well know which of the dinosaurs are likely to be the first doomed - and so do many others, including business leaders. However, it has taken an academic, Stelios Kavadias, the Professor of Enterprise Studies in Innovation and Growth at the Judge Business School of Cambridge University to stand up and publicly name one such genus of incumbent European telco that is tottering towards the tarpit.

At a round-table event late last week, held under the aegis of AT&T and which TelecomTV attended, Professor Kavadias was asked directly to provide a named example of a telecoms dinosaur. He opined that there are several but added that "Deutsche Telekom lags in adaptability" and apparently suffers from a congenital management malaise that manifests itself as an "internal inability to move faster."

Stelios Kavadias says that, as the investment cycle continues to accelerate, organisations of all stripes are under increasing pressure not only to innovate more or less to order but also to provide an environment and strategic plan within and under the terms of which innovation, whether incremental or sudden, will be nurtured and encouraged to flourish despite the inevitable disruptions that will follow in its wake.

He adds though that the "human factor" (or perhaps it should be 'factors' given that many organisations actively detest the concept of innovation because of the change and uncertainty the construct engenders within the psychology of a business and the fear of loss of power, face, prestige, position and income that might be the 'reward'  for individual executives of that organisation were they to embrace innovation) must always be taken into account because it will always be there to intrude into decision-making and prevent changes to the status-quo. 

Six Degrees of Innovation

AT&T has commissioned new research (carried out by the aforementioned Cambridge Judge Business School and lead-authoured by Professor Kavadias) that proposes a predictive transformational model for innovation. Called "Six Degrees of Innovation", the paper demonstrates that it is possible for companies to drink deep from the holy grail of innovation when those enterprises exhibit empiric evidence of use of one or more behaviours from a list of six business model traits.

The study examines how new technologies and market demands can combine and lead directly to business innovation and also explores scenarios to determine if there are any characteristics common to enterprises that have been judged to be successful. The business school looked at a variety of vertical industries and discovered that companies that have successfully innovated via the application of technology share certain characteristics and patterns in common.

These shared patterns (or Six Degrees of Innovation) are:

  1. Bespoke products and services tailored strongly to meet customers' individual needs.
  2. Sustainability; where companies minimise waste and manage resource costs. A circular economic model to ensure the lowest incidence of waste and rein-in costs.
  3. Jointly-owned assets that reduce the overall cost of ownership.
  4. Usage-based pricing in tandem with a high degree of personalisation helps in the creation of new and unmet demand.
  5. Effective monitoring of supply chains to ensure that they are risk-resilient and collaborative.
  6. Using data to adapt quickly and easily to user needs.

In essence, the report analyses fundamental trends in supply and demand together with changes in applied information technology to introduce the notion of a "matching filter" between technological capabilities and market needs in order to predict transformational innovation in a given industry.

For the study, the researchers looked at six industry sectors; Oil and Gas, Banking and Financial Services, Retail, Transportation and Logistics, Education and Healthcare. Interestingly (and somewhat surprisingly given that comms technologies are the prime enablers of all of the changes been effected in the sectors listed above) telecoms is a notable exception from the list.

The study finds that transformational innovation can be conceptualised as the outcome of two co-evolving processes. The first is supply and demand trends, including rising global demand for products and services, higher costs of more raw materials and new customers making entry to the digital economy, many of whom are from developing countries and with diverse characteristics.

The second is technology trends are the design, production and distribution capabilities of enterprises and companies, enabling the global market to search for new products and services. These are trends propel a new wave of the information based on mobility and the use of big-data analytics.

AT&T has commissioned research that provides a framework for assessing the potential of transformational innovation. It remains to be seen whether the report is just one more in a continuum of similar papers that provide a few short-lived talking points for academic and business leaders and is then quietly shelved, or whether or not it can be adapted to provide a platform on which to build a pragmatic, prescriptive roadmap that some organisations will use to foster innovation by adopting the best business strategies to drive growth and lead their industries.

In the meantime, we can be sure that in the telecoms version of Jurassic Park a few big beasts are chomping contentedly and gazing, blank-eyed into an apparently endlessly blue sky. They simply don't realise that they are about to be hit by the technological and organisational equivalent of a giant asteroid.

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