I run a research center called Centre for Technology Strategy at the Norwegian School of Management. Inevitably, the question comes up – what is technology strategy?

In my mind, the question is simple and comes down to two things: The realization that most changes in the world are due to changes in technology, and, hence, it is vitally important for managers to understand how technology evolves and how this evolution impacts their companies.

I like to illustrate this with a diagram of such mind-boggling simplicity that it is almost embarrassing to present it here. On the other hand, it seldom fails to inform when I use it in presentations – and a number of my collaborators through the years like it enough to use it in theirs:

In words: Technology drivers – i.e., changes in how we do things – changes the business environment, which again imposes changes in strategies on companies. Technology strategy aims to enable companies to understand the technology drivers to be able to change their strategies before they are forced to by the business environment.

This is by no means easy. It may be hard to understand what the drivers are – if you were a producer of travel alarm clocks, would you have foreseen the use of cell phones as alarm clocks? And though the drivers may be easy to understand, you may under- or overestimate the time it takes before your business environment changes. Lastly, it may be easy to understand both the change and the timing, but just hard to deal with the change itself. Newspapers and book publishers, for instance, can easily see what is happening to the music industry, understand how the business environment is changing, yet find themselves repeating the errors of the music industry because the changes necessary goes against the norms and values of those of power, as well as their technology and their business model.

To understand technology strategy, of course, you need also to understand the current business environment – in terms of the technology currently used – and how it shapes current strategy. And you need to have an understanding of technology evolution in general and the evolution of technology in your industry in particular. Lastly, you need an understanding of how to change technology inside organizations – something which requires an understanding of not just changing technology, but also organizational structures, incentive systems, and norms and values.

(part I of a series of short and rather irreverent articles on various aspects of Technology Strategy)