Companies are typically known to be late adopters of new technology. A study presented in the Organisation for Economic Co-operation and Development’s Global Forum on Productivity in 2019 found that the adoption of new technology is hampered by low managerial quality, lack of technology skills, and poor matching of workers to jobs. Therefore, one sign of strong leadership could be the ability to continually assess the technological needs of the organization and adapt accordingly.

It isn’t only about maintaining the leading edge. The study authors found that a lack of technological innovation actually lowers company productivity. And on the flip side, they found that productivity can improve through the adoption of technologies that currently exist in the marketplace. Does this mean that companies should adopt all new technologies? Does the adoption of new technology always make sense? Well, no.

We all have the tendency to be attracted to new and shiny things like innovations in technology. A leader of an organization is tasked with, among many other things, deciding which of these thrilling new technologies an organization should or shouldn’t adopt. This may seem like a daunting task, but the benefits are worthwhile.


Leaders often find that the choice to adopt has been made for them. For example, the adoption of a new technology can be mandated by a regulator. In 2009, the U.S. Securities & Exchange Commission (SEC) mandated that all public companies start filing their financial statements in eXtensible Business Reporting Language (XBRL). This new technology required companies to mark up or tag the amounts included in the financial statements. In this case, companies didn’t have a choice regarding whether to adopt the technology or not.

Another case where the company may not have a choice about the adoption of a new technology is if a company’s main customer adopts a new technology (for example, an ordering system). Similarly, in cases where the industry is adopting a new technology, the company may need to follow suit, just to remain competitive and stay in business.

In instances like those, the leader’s responsibility is to ensure the new technology is implemented effectively and efficiently and that the organization derives as much benefit from it as it can. But in other instances, the company has more of a choice to adopt a new technology or not.


Many aspects need to be considered when evaluating a new technology. First, as basic as it may sound, for a new technology to be adopted, the benefits from the adoption must outweigh the costs associated with the adoption of the technology. Many possible benefits can stem from adopting a new technology, like an increase in productivity and a competitive chance against more robust companies. For example, Caterpillar incorporated the Internet of Things into some of its products and can now offer its clients predictive analytics to help them manage and monitor their fleet. A similar move was made by Airbus, Siemens, and other manufacturing firms. This can help these companies create and maintain a competitive advantage. Another benefit leadership should consider is the reduction of costs incurred by the company, such as lowered production costs or increased efficiency resulting from a new automated process.

Risk reduction is one more major consideration. For example, Walmart has been working with IBM on adopting a new blockchain system that would allow Walmart to track its leafy green vegetables. Walmart is hoping that by having all suppliers and handlers of the food adopt this blockchain system, the company will be able to identify the source, path, and current location of the leafy greens. In the case of a problem like E. coli found in lettuce, Walmart would then be able to more quickly and accurately identify the affected items, locate them, and remove them from the shelves. This sort of investment in forward-looking tech can spare an organization untold damages in both revenue and reputation.


Acquiring new technology can be a costly enterprise with many attendant variables such as staff training. In the Walmart blockchain scenario, for example, all suppliers and employees who handle the food at Walmart would need to be trained on the new system. In some cases, primarily when the software impacts the accounting system, companies may be required to run the old and new systems in parallel for a few quarters until management and the company’s auditors reach the required familiarity or success with the new system.

Integrating new technology into the company’s current information technology environment can also be a costly proposition. This cost will differ widely depending on the specifics of each case but can still accumulate. We all have cases of old software not working on a new operating system we installed on our computer or an app no longer working on a new phone. The same situation may happen at work. Adopting a new technology may render some other current technology obsolete.

Deciding on the adoption of a new technology is an important task that company leaders shouldn’t take lightly. In many cases, the adoption of the technology would bring with it many benefits that would take the company to places it couldn’t go before. But the approach shouldn’t be adoption at all cost. All that glitters is not gold, and not all new technology is the right fit for your organization.


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