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Tragedy or strategy? The relevance of the past for competitive advantage

Bátiz-Lazo, departmental chair in Business History and bank management at Bangor University, in Wales, discussed the importance of creating a competitive advantage.

Tragedy or strategy? The relevance of the past for competitive advantageiStock


| by Bernardo Batiz-Lazo — Professor of Business History, Bangor University

It is a cliche to say that those who learn from the past, will avoid the same mistakes. Yet this in essence is what's behind calls for more business history in prestigious outlets such as the Harvard Business Review and more recently in Canada's Globe and Mail. Similar support has emerged from the success to reach a mass audience by financial historians Barry Eichengreen and Niall Ferguson or the vast and regular production of research by economic historians at Federal Reserve banks. 

But look around you and see how history is largely ignored by managers and senior executives. There is clearly an emphasis on the "here and now," in the everyday and mundane, while putting aside the "there and then" and "how we got here." This carries a huge risk to lose strategic insight. 

For instance, I remember one ATMIA conference where talking to sales and marketing staff from a manufacturer it was evident that they had no clue that their company had been one of the industry pioneers but had since withdrawn. They were unable to talk about why their company failed to create critical mass. As it turns out, a few years later this manufacturer again failed to make a presence and, once again, withdrew from the ATM industry at a significant cost.

Although it is a mistake to think that history repeats itself, this brief recollection illustrates the importance of regular discussions as to exactly how and why "this time (reentering the industry) is different." 

Indeed, as I asked around no one could tell me to what extent the particulars of both entry processes were different or to what extent the debates within the company were similar. A shame as business decisions are not made in isolation but have a past, a context where they belong and gives them meaning, and a future outlook or expectation. 

Bringing the "longterm view" can also be instrumental to build narratives, facilitate cultural change, motivate people to overcome challenges, and give employees a sense of belonging. It provides tools to cut through management fads and the noise of the moment to focus on what really matters.

However, incorporating insight from hindsight and thus delivering on a "usable" history cannot take place without an appropriate process to create and save organizational memory. This implies creating corporate histories which are not celebratory but candid on success and failures, case studies around key projects, CEO speeches where current strategies or actions are contextualised in a long-term perspective, and even corporate archives (which often can be housed at universities or local authorities). 

In this regard, some companies in our industry such as Citigroup, IBM or NCR have received substantial attention, but most remain in the dark. 

I have been fortunate to have had the opportunity to write in depth about the ATM industry (in 2013 and 2018) as well as to keep this space to post my musings. At the same time, ATMIA has been keen to celebrate the past and the future of the industry (see the50th anniversary of first deployment portal and the forthcoming 20 celebration of Mike Lee at head of ATMIA).

There are a number of issues currently impinging in the ATM industry. Some of them, perhaps, have a clear internal focus such as the  debate on operating systems and the effort to roll out NextGen ATM. But others are not unique, such as the challenges to diversification and profitability of within a mature product industry or the rise of digital payments. There is thus an impending need to expand efforts and create a forum where business historians and other senior academics, corporate executives and policymakers meet regularly to discuss issues of shared priority. 

Such forums already exist as is the case of the Long Run Initiative, Cash Essentials and The Winthrop Group. However, their challenge is to move beyond discussion and take action to create a shared memory as well as enthusiast young executives on the importance of creating insight for competitive advantage. 


Bernardo Batiz-Lazo

Bátiz-Lazo is Departmental Chair in Business History and Bank Management at Bangor University, Wales. He has written about ATMs for publication, been a guest on BBC Radio, and spoken at the Federal Reserve Bank of Kansas City and the ATMIA conference.

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