One of the most difficult challenges of management in the future will be the need to solve problems that we do not even know exist.
The immensely rapid development of technology has not made the problems of leadership any easier. Products find their way into the market much faster these days. For example, it took radio 38 years to reach 50 million users. Television took 13 years, the Internet four years, iPod three years and Facebook two years.
These numbers were presented by Markku Kuula, Professor of Logistics, at the end of May in his inauguration presentation at the Helsinki School of Economics, part of the Aalto university. In his presentation, he characterised the future challenges of his tenure, using Oy AGA Ab as a practical example of technology management.
“It can be expected that during his or her work career, a current student at the Helsinki School of Economics will be called on to perform tasks which do not yet exist. He or she will use technologies which have not yet been invented and solve problems of which we are not yet aware,” Mr Kuula said.
He also gave a few examples of famous predictions of the future which went wrong. For example, in 1901 the American pioneer of flying, Wilbur Wright, estimated that man would not fly for 50 years. In 1932, Lee de Forest, the inventor of the vacuum tube, noted that the television was an interesting device, but financially an impossibility.
The following statements from the history of information technology are also famous. In 1977, the CEO of the computer giant Digital specialising in so-called minicomputers, said that there was no reason for any individual to have a computer in his home. Bill Gates, the founder of Microsoft, said in 1994 that he saw little commercial potential for the Internet for at least ten years.
What will make a breakthrough and in what time?
Predicting which technology will make a breakthrough and in what time is difficult. In order to achieve a competitive edge, companies strive to acquire new technologies. This need has given rise to a new discipline: technology management.
According to Mr Kuula, technology management simply means guiding the use of technology towards the benefit of the people and of humankind in general. He noted that in addition to the rapid development of technology there has been notable growth in the importance of services. Not just service companies, but manufacturers, too, offer services, and even solutions instead of products or services.
Mr Kuula sees that technology management will be required in more and more companies. According to him, the operations of very many companies are based on hi-tech, whether the company is an IT company, paper manufacturer or gas manufacturer. On the other hand, he says, many places have yet to cotton on to the inclusion of IT in processes.
AGA operates in a standardised, high-quality manner
Mr Kuula examined Oy AGA Ab as an example in his presentation on technology management. Founded in 1904, AGA operated as a conglomerate until the 1960s. The focus of the company, however, was on gases, their use and manufacturing technology. Today, AGA is part of the German Linde Group and has only one product programme, one delivery programme and one delivery transport method per transported gas type.
According to Mr Kuula’s observations, AGA has standardised both its products and production processes. Production management is customer-oriented, with gas being manufactured only to order. Environmental and safety issues are increasingly present in the background of new process innovations.
Gases sold in cylinders to customers are delivered by AGA in AGA-owned gas cylinders. The delivery routes are optimised using mathematical models, and the delivery and status of cylinders is tracked in a real time information system. Gas production, on the other hand, is carried out at a highly automated plant. AGA guarantees the quality of its standardised delivery and production with the ISO 9001:2000 certificate. The company is also aiming for the High Performance Organisation (HPO) status by 2012.
Information systems play a central role in AGA operations, and in Mr Kuula’s opinion, the company’s management has also internalised their significance. Commitment to good data administration practices is visible in decision-making and in the development of processes.
From products and services to offering solutions
“AGA’s operations are also fully customer-oriented; deliveries and production use the pull control method. Service-level agreements occupy a central position in business operations. This is also a matter of service business management,” said Mr Kuula.
According to Mr Kuula, technology management plays a central role in companies and must be connected more closely to the tasks of the company’s top management, one of the most important of which is to ensure future operational conditions. For this it is essential to form a strategic view of the company’s future position. Mr Kuula reminds us that wrong choices may lead to the end of the company’s operations.
“Some companies want to be followers and some trailblazers. Following is safe. Trailblazing is expensive, but when it is successful, it is very lucrative. This requires size, as small companies can seldom afford long-term product development,” he said.
Mr Kuula emphasises the importance of an overall strategy. Separate strategies can lead to compartmentalised thinking and company-internal competition. Mr Kuula believes that companies in the future will, like AGA, offer their customers solutions instead of products and services.
Mr Kuula’s latest research has involved, for example, the valuation of real options, sustainable development in the delivery chains, and the connection between management practices and success with regard to different industrial companies. He also intends to delve into the modularity of services.