Why good old days are gone in era of industry disruptions

When the industrial revolution began in the 18th century, textile workers in England were so outraged by the possibility of losing their livelihoods that they began to destroy machines in the hope that they could banish technology or keep it at bay for as long as possible.

So serious was the vandalism on equipment that the government passed the Protection of Stocking Frames, etc. Act 1812 that allowed a death sentence for those found guilty of damaging stocking frames.

In spite of these harsh laws, English textile workers, alarmed by the increasing influx of weaving machines in their country, violently protested what they saw as the greatest threat to their livelihoods. They would swoop in on cloth factories and smash machines into smithereens, hoping that by so doing they would force a return to hand made garments.

This Luddite rebellion grew in scale and spread in geographical scope to the point where the military was called in to suppress it.

As is obvious today, technology prevailed; the word “luddite” now means “a person who is especially opposed to technological change”.

In the beginning of February 2016, the Kenya United Taxi Organisation (Kuto) — a number of whose members are leaders of family business — issued a seven-day ultimatum for the government to banish new entrant Uber from Nairobi’s city centre.

Citing the competitor’s low prices and stringent vehicle requirements, they claimed that this new operational model threatened their livelihoods and if sustained, would render them incapable of meeting their financial obligations.

No explanation was offered as to why Kuto’s services were relatively expensive, how exactly this new player was eating into their market or what they needed the government to do to help them compete (apart from blocking Uber’s access to the city centre).

While their chairman mentioned in passing that they would “roll out a digital platform for the benefit of their customers” no timeframes were put forward.

Those who regularly use conventional taxi services will testify of the inconsistency of fares charged, the variability of vehicles used and the difficulty in knowing exactly when (or if) one’s ride will show up. The same goes for many other services on offer today.

Any competitor that introduces predictability in price, quality, and time has the upper hand even over those with whom one has a personal relationship. While clients may sympathise with the family business that is struggling to adapt to new technology, they will not indefinitely subsidize inefficient enterprise practices while better alternatives are available.

Leaders of family business must recognise that technology will, with increasing frequency, disrupt the way business has traditionally been done. Because the world has and continues to become more connected, what has been found to work in other countries or industries will find its way into all corners of the earth.

The changes that come along with these disruptions bring out new customers for services, reduce costs and improve quality of products. These beneficiaries will celebrate. Sadly, they also negatively affect those who profit from the status quo; these will resist, sometimes violently.

Resisting technology, as history has shown, is often futile. The public, who constitute the market for products and services, will not subsidise inefficient industries just to support voluble operators who cannot imagine any other way of doing business.

While they may sympathise with the fears of those negatively affected by change, they will generally vote with their wallets and move on to better products.

Disruptive technology, especially in this era of a highly connected world, will be the norm rather than the exception. No family business can expect to operate in the comfort of the “good old days” and hope to survive. Such ventures must either find a way to incorporate new technology into their business models or, failing that, find another source of revenue.

Even though it is most uncomfortable, new technology allows business ventures to make more efficient use of their resources, create new efficiencies and reach a client base that was previously outside their product scope.

It often makes products more affordable, increases their quality while offering lucrative opportunities for work. Technology should be harnessed not resisted.

Mr Mutua is a Humphrey Fellow, leadership development consultant and author of the book ‘The African Prince’ available on Amazon Kindle.

Email [email protected].