These days, the pace of technology development has companies grasping for clues about how to transform their businesses to keep ahead of the competition. We know that technology enables innovation, but the right conditions must be in place first for innovation to blossom. Identifying and meeting those conditions is the Holy Grail in business, if ever there were one.
At AT&T, we know that our customers look to us for insights on technology solutions that will help them become the leaders in their respective industries. That makes it crucial for us to play a part in advancing knowledge about the drivers of innovation and spearheading the debate about how technology can help companies become more successful. In order to do just that, we recently commissioned research by the University of Cambridge’s Judge Business School (CJBS), home to a world-class research team in England, to find out if it’s possible to predict where innovation will occur in business.
The team at CJBS undertook this challenge by looking for shared traits among six key industries: oil and gas, banking and financial services, retail, transportation and logistics, education, and healthcare. They also assessed major shifts in global demand and supply trends and the impact technology has on those trends in an attempt to determine business model characteristics that generate true transformation.
The findings revealed six business characteristics that are typically present in companies that have successfully transformed their industries. These six degrees of innovation can be taken as indicators of the propensity to innovate or as a diagnostic tool for businesses wishing to review their operations in light of technology developments — and adjust their models accordingly:
- Strong personalization through tailor-made products and services;
- Sustainability, woven through all aspects of the business, to use, reuse, and recycle inputs;
- Jointly owned assets that allow users to benefit from reduced costs and maximum convenience offered by the sharing economy;
- Models of payment-only-for-services-used;
- Effective monitoring of supply chains to increase efficiency; and
- Using consumer data to easily adapt organization structure to customize offers.
The “Six Degrees of Innovation” report outlines well-known examples of innovators that have used these methods to disrupt their industries. In retail, for example, bespoke recommendation engines have revolutionized online shopping through their customized suggestions for each visitor based on individual search and purchase data. From another angle, companies can build offers based on maximizing the use of their assets and reducing costs as consumers see the benefits of using shared assets such as peer-to-peer short-term rentals or shared parking spaces.
Business strategists tend to know good, technology-enabled innovation when they see it. Indeed, some of the six degrees are familiar to all of us given the fame and fortune of the companies highlighted in the research, such as Uber, Amazon, and Airbnb. But what this research establishes uniquely is the six business model levers that fast-track that innovation. If the chess board is set to enable these plays, a business is primed to use technology to its best advantage and lead transformation in its industry.
Every business customer I talk to wants to improve its competitive positioning. They understand that innovation cannot be copied and that companies need to constantly evolve with technology to succeed over the long term. As I see it, exploring and implementing some or all of these six degrees of innovation can help businesses establish a pattern of repeatable and sustainable success.
I encourage you to read the full report and materials, which are available on the AT&T website, to give your business a competitive advantage in your industry.