August 4, 2016
by Chris Curran
Businesses need to understand that incremental innovation and radical innovation with digital requires two different approaches and mindsets.
Digital is changing most everything about how businesses operate, but some things never change. As with every other innovation opportunity that has come down the pike, the vast majority of corporations are applying digital incrementally rather than radically to their businesses. Meaning, they are using digital to inch forward with improvements to front and back-end operations. However, they are not using digital boldly to discover new business models and tap fresh revenue streams.
According to PwC’s Digital IQ survey of 2,000 business and technology executives, only 8% of respondents say the main drive of digital is disruption. Don’t get me wrong. Incremental innovation with digital is exactly what businesses should be doing and they are making impressive changes. For example, I’ve seen executives using augmented reality to facilitate inspired conversations with customers. And, businesses are using sensors to take the guesswork out of daily decisions. But they also need to fold disruption into the mix to make the big revenue generating gains that shareholders demand.
In attempting digital disruption, businesses need to understand that incremental innovation and radical innovation with digital requires two different approaches and mindsets. According to our survey, here’s how digital disruptors operate:
- Employ a continuous process to evaluate business for applying digital innovation. Disruptors apply continuous processes to the core business in much more robust ways than incremental innovators.
- Allow individual technologies to serve as the driving force of innovation, rather than putting business priorities first. This is the reverse of how incremental innovators operate.
- Value the necessary skills needed to disrupt with digital. Having people with strong analytics, architecture and user-centered design skills is critical and core to their business. I call these fast-tech skills.
The key takeaway here is the strategic flip flop that disruptors make. When it comes to incremental digital deployments, enterprises should view technology through a business lens. They should explore how they can apply emerging technology to solve existing business challenges. But, when trying to invent business models from scratch, letting the emerging technology serve as the source of inspiration for investments might make more sense.
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