Enterprise executives only get a handle on disruptive technology by understanding the potential for, and impacts of, technology-driven innovation on multiple levels. That is, they must consider both changes in IT implementation and, more importantly, the resulting changes in their business and industry.
Line-of-business executives need to understand the latter, particularly, but IT executives need to have a handle on both. GigaOM analyst Haydn Shaughnessy gives a rundown on the state of the art of innovation management in his excellent report, “Rethinking innovation: How to manage ideas systematically.” A few of the processes he outlines that can be applied to technology-driven changes in both business and industry and in IT implementation are the following:
- Open innovation is looking both internally and externally for innovation. Technology firms have long found acquisitions or other deals with tech startups to be more effective sources of innovation than depending exclusively on in-house R&D. Increasingly, corporate enterprises, such as Walmart, operate accelerators where they can further develop relevant tech-based acquisitions that eventually become integral to its business. But open innovation can simply involve broadly scanning for or soliciting ideas. Both IT and line-of-business departments can look to customers, employees or external sources for ideas of how technology will enable the enterprise to conduct its business and deliver its resources differently.
- Narrow innovation refers to enterprises developing more specialized offerings for increasingly segmented markets. Not only is it likely that technology will enable an enterprise to serve the precise needs of more customer segments, but it is also likely that technology will enable more employees and departments within an organization to have finely tuned technology support and resources.
- Systemic Innovation involves the management of innovation processes, from the evaluation and selection of different options for innovating, to the creative optimization of external resources, such as crowdsourcing, contractors or outsourcing, to lean innovation with its customer-tested proof of concept for creating value, or algorithmic innovation, which involves identifying the rules and processes by which innovations pertain and can be applied across environments.
Central to algorithmic innovation are the observations that problems, solutions and patterns of technological evolution tend to be common and commonly repeated across industries. Thus, enterprise executives can learn from patterns of technology and business change in other industries as part of a process of identifying and managing disruptive change.
Later this week I’ll look at another report by Haydn Shaughnessy, ‘’Renewing tech-company growth via radical adjacency”, where we’ll consider the ways in which technology has enabled tech firms to enter new markets — and how the same principles and practices, within the theory of algorithmic innovation, may likewise be applied in other industry sectors.