An explosion of new technologies is creating new winners and losers in nearly every industry. You only have to look at the changing fortunes of Apple and Hewlett-Packard in the personal computer/tablet arena over the last decade to see how innovation can propel one company into superstar status, while another becomes irrelevant in the same market space.
So how can companies gain and hold an edge in technology innovation? In an engagement with a major global manufacturer, Cisco IBSG identified three key factors in the product innovation process that companies must clearly understand and be able to orchestrate:
- Technology Strategy: Develop a technology strategy based on internal and external scans of rapidly emerging capabilities. These should include an assessment of each technology’s ability to disrupt, its stage of incubation, differentiating factors, competitive alternatives, and identification of platform choices. Developing a business and technology architecture for how the technology fits into your company’s platform portfolio is a critical step in this analysis.
- Ecosystem Management: Arrange and manage ecosystem partners by assessing the need for technologies to perform certain functions that extend beyond your own internal capabilities, such as the ability to connect to a broader environment. You will need to understand existing and future profit pools to validate partner choices. For example, providing “smart services,” such as analytics, can extend a product’s useful life and be the source of long-term profitability, for both you and the ecosystem partners that deliver them.
- Market Interactions: Prepare and execute detailed plans for managing market interactions, from initial introduction through full-scale market management. This includes an ongoing analysis of customer reactions, portfolio management, media communications, and potential competitors.
To become a market leader, a company needs not only to identify and track key disruptive technologies—it must also harness those new technologies in its solution platforms. In this case, “platforms” refer to solutions, services, and technologies that enable a new market offering. Don’t just develop strategies for each technology—understand the potential for disruption within your company’s key platforms.
Your innovation strategy will need to be repositioned or pivoted as technology changes or market reactions take shape. It is not enough to set up a strategic framework, and then revert to business as usual. Scanning for new technologies, orchestrating ecosystem partners, and managing market-facing processes must be ongoing processes. How well you deliver on this model will help determine whether your company will be a disruptor in your market space—or one of the disrupted.