Section 508

August 16th, 2016

Why Your Company Should Stop Technology Innovation

Is technical innovation a competitive advantage? Did it give Addison Lee and Uber a competitive advantage to be the first with Apple Watch apps? Did Lloyds Bank and Bank of Canada gain anything from early pilots with heartbeat authentication? Did Anheuser-Busch InBev sell more beer by being among the first to launch Augmented Reality apps? Would it have been a disadvantage if they had waited? Do the R&D teams of Vodafone and Verizon give the companies sustainable, competitive advantages that make them more successful?

Almost every Fortune 500 company now has an innovation lab with the objective of driving innovation and looking for innovative startups to partner with. Most of them fail to achieve their objectives. Many do more damage than good. Why do they fail?

My theory is that they simply got it completely wrong from the start. Businesses tend to focus on the wrong things. For most companies, competitive advantage doesn’t come from new products and technology. It comes from incremental improvements to products, services, processes and the customer experience.


To illustrate the difference, let’s look at the hotel industry. A couple of years ago, Starwood, Hilton and Marriott started experimenting with turning their Apple Watch and smartphone apps into room keys. This requires a big technology investment for each property and customer adoption for the pilots was limited. However, since last year Starwood has enabled and encouraged guests to communicate with the reception using WhatsApp and Facebook Messenger. This seemingly small improvement, which only requires a smartphone, has vastly improved satisfaction among younger guests.

And companies don’t need to be innovative to be successful. Low cost airlines are a great example of this on a big scale. Since Southwest Airlines launched their innovative low cost airline offering, hundreds of other airlines have copied the concept. Most of them have been successful by simply tweaking and adapting it to their local market conditions.

What’s the learning from this? 9 out of 10 companies can be successful without technology innovation by simply doing two things every year:

  1. Review your customers’ profiles/personas and the end-to-end customer experience journey, identifying problems and opportunities. Then size and prioritize each one of them and create a roadmap to maximize customer and business impact.
  2. Review the customer experience of key competitors. Identity what customer problems they solve and how to copy what they do well.

This works for all companies, indifferent of size. The main difference is that incremental change in a big company involves a lot more people, processes and other variables. 


Stop focusing on technology innovation and spend your money and resources on the things that really matter and you will become more successful.

Want to innovate, stand out from the crowd and be in the top 1%? Read our previous article about how to reimagine your business, processes and products and services in a digital world.

Magnus Jern, President DMI International

Tags: innovation insights

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