Don't just upgrade products, invent new use cases for technology
From artificial intelligence (AI) and electric vehicles to blockchain and composites, we are in a golden age of innovation. To unlock value from these technologies, though, businesses must transform themselves, and, according to a McKinsey and Company study, over 70% of such efforts fall short. Obviously, businesses adopting a new technology need the right key performance indicators (KPIs) and internal alignment of their operations to ensure they get what they want out of it.
But there is a bigger, often neglected, factor that determines whether they are unlocking durable returns, rather than merely chasing expensive tech trends. While upgrading old use cases and creating new ones both constitute innovation, only the former creates lasting economic and social value. This tension is playing out now with generative AI.
As Goldman Sachs noted earlier this summer, companies have poured $1 trillion into AI without much to show for it yet. To maximize the return on investment in technology, business leaders should think like architects who are starting from a blank page. When digital cameras emerged a generation ago, consumers still took memory cards to brick-and-mortar stores to print their files.
Today, we share images instantly with our phones and social networks. This evolution reflects a common pattern in technology adoption. As entrepreneur Chris Dixon notes in Read Write Own: Building the Next Era of the Internet, we initially use new technologies merely to continue old behaviours with greater speed, ease, or quality, or at lower cost.
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