Digital is Overrated and Innovation Misunderstood... by Maarten Ectors

Digital is all the buzz today. You need to have a mobile app, be agile, invest in startups, move to Office360 & Yammer, do sprints, have scrum masters, use AI, build IoT, add BlockChain, ... BUT the dirty little secret of the innovators is that you will not be one. You might actually be putting lipstick on a pig!

So everybody understands the lipstick on the pig issue here is an example. If Blockbuster would have used Office360, AI, IoT, BlockChain, sprints, ... then they would have been super efficient in predicting which DVDs you wanted to rent, have the best-optimised logistics to get the right DVDs in each store, track with cameras which customer was going to be interested in which, use BlockChain to make sure they recorded every DVD that was ever rented...

BUT Netflix would still have driven them into bankruptcy!!!

Digital means efficiency and speed which are two ingredients that large corporations understand and want. Hence everybody is focusing on it today. However, digital does not convert you in Amazon, Google or Tesla. Digital if done right can actually prolong the lifespan of a company with a dead analogue business model and lead to a bigger bankruptcy failure. Nokia was as Digital Leader as they came in 2008, however, Apple and Google were Digital Innovators.

So what is innovation?

Innovation is when somebody goes to the Group CEO and tells them that their core business is analogue and that it will not survive the digital revolution. That all the skills that have been perfected over decades have become irrelevant. That you might have an idea, need money but that it might fail...

Or worse. Who wants to go and tell any car manufacturing CEO that their diesel investment is lost. Their supplier network is a hindrance. They over engineered cars. Their maintenance revenues are going to disappear. They overspend billions on marketing because their innovative competitors don’t spend any and are outselling them in the luxury segment. People will no longer buy cars but use them as a service. For which the only clients they might soon have will be called Google, Uber, Lyft, etc. But most importantly that Elon Musk has tricked them and the whole industry. Yes, he is going through production hell with the model 3 right now BUT a Model 3 is not a car anymore. It is a driving computer. Nobody else has made an emergency breaking issue go away with an over the air software update. The biggest thing about Tesla, Google Waymo and other self-driving cars is the amount of collected data and the trained algorithms. Yes, any car manufacturer can mass produce an electric vehicle better than Tesla although they will soon find out that Tesla learnt to do it equally well or better. However, none will be able to buy 5 years of driving data. As any digital leader knows AI is all about the quantity of data and the hours you train it. Nokia did not loose from Apple because it did not know how to produce a smartphone. Nokia lost because it did not have an OS with millions of third-party apps. Google solved this for the industry by providing Android for free and getting all digital revenues. Guess what will happen? Tesla is the new Apple. Google delivers Android self-driven software to cars manufacturers and Uber provides the car as a service. What happened a decade ago is repeating itself. Apple became the most valuable company in the world. Guess what Tesla will soon become.

So innovators are misunderstood, often on purpose because they choose to be! Can you become an innovator? An innovator is like a painter. Most people have no talent but can learn the basics. Some can go from average to great. Only few become Picasso...

----------------------------------

Maarten Ectors is a strategic innovator who exchanged working with the who is who of high tech to apply disruptive technology and business innovation from the inside in the top UK insurance and investment management company. In less than a year they won the best claim technology solution of the year award and that is just the start...