As an advisor and consultant to some of the world's largest and most innovative companies, over the past few years I've seen a dramatic shift within the C-suite.
Today's executives recognize the urgency to explore and invest in disruptive technology. Whether it's blockchain, autonomous cars or the internet of things, the frenzy makes sense. Strategic innovators experiment with technology. Investing time and money in something unproven is worth the risk. If you don't disrupt, they say, you'll eventually be disrupted.
I've had the privilege to do a little work with two big companies known for their long-term focus and investments in innovation -- 3M and Cisco. Like many companies, they apply disruptive technologies to build their future products and services. But 3M and Cisco also use a similar approach to their technology-inspired innovation to make it a sustainable and repeatable process. Here's how they do it:
Explore the Disrupters, but Don't Stop There
3M recently established an initiative on "Connected Roads" to tap into the impending disruption from autonomous vehicles. 3M's scientists are developing new materials for road signs so sensors on automated vehicles can track signals as they speed by, essentially enabling both humans and machines to navigate roadways together in a reliable way by "reading" the same signs.
Cisco applied the power of the Internet of Things by using data from thousands of connected devices to create what it calls "intent-based networking" - aggregating enormous amounts of data promises to eventually reveal a new level of artificial intelligence.
Whether these experiments become the next big thing for 3M and Cisco is anyone's guess. That's because the biggest challenge with breakthrough innovation is that the market success of any given product or service based on new technology is highly unpredictable.
For most companies, the question isn't whether to experiment, but rather how to consistently create new revenue streams over time. Long-term innovators like 3M and Cisco recognize that in today's world enamored by the allure of disruptive technology, it's important to investigate the potential game changers, while not becoming blinded by them. Sure, a big innovation may come from a new to the world technology, but leveraging existing technical capabilities is equally important, if not an even more predictable driver of sustainable business growth.
Use Technology Platforms to Drive Long-Term Growth
Even though they're in completely different industries, 3M and Cisco both use "technology platforms" to guide their innovation efforts. These companies recognize they need a way to inspire innovation that significantly improves upon today's offerings or creates entirely new market opportunities - even if those innovations aren't always "disruptive" per se.
A "platform" is a technology that can be used as the basis for creating various products or services. One of 3M's most famous technology platforms is "adhesives," which has allowed the company to create products like Post-It Notes, Super Sticky Easel Pads, Scotch tape, stretch release Command strips, performance adhesives to replace rivets on airplanes, medical tape, and the list goes on.
The problem in most companies is that leadership either only goes for the big bets or gets stuck in a single-minded focus on the small stuff. If we only swing for the fences, we'll miss the opportunity to score on singles, doubles, or triples as well. Technology Platforms provide a way to score on various types of innovations that help win the long game.
Define Your Platforms
Most companies understand the concept of "core competencies" - the combination of knowledge, resources, and strengths that help differentiate a company in the marketplace. While technology might contribute to a company's overall core competencies, technology platforms are a much more specific way to understand and take advantage of technology to drive innovation.
3M, for example, uses a "periodic table" format to classify 46 technology platforms into four areas that focus its innovation efforts: materials, processes, capabilities, and applications. According to Gayle Schueller, 3M's Vice President of New Platforms, "3M's technology platforms help guide efforts to maintain world-class knowledge and differentiated capabilities that advance specific products, services, processes, and business models."
Cisco applies a different approach to defining its platforms, though the result is similar. Cisco's Services business structures some of its innovation platforms based on what's needed to deliver services for open source software. The idea is simple. According to Stan Baginskis, Cisco Services Sr. Director of Technology Strategy and Growth, "Accelerated adoption of open source software creates an opportunity to provide services to help our customers use the software to its full potential."
To the layperson, open source software may be almost unheard of (like FD.io, OpenDaylight, etc.), but many of these tools have become the technical backbones that help run the networks, security, storage, and cloud services of many large companies. Because the software is open source, the software itself is free, but companies are left to their own devices to implement it.
Cisco uses a simple framework to describe its platforms, each of which is a step in the life cycle of how companies select, customize, implement, and support their software tools. For example, Cisco views its platforms as Advisory, Implementation, Development, Technical Support, Solution Validation, and Optimization. Each of these platforms contain various service offerings that help customers make the most of their software.
Make Platforms Strategic
Not every technology is a platform for every company. Some technologies may be useful for developing specific products, but they may not be the basis for future competitive advantage through innovation. 3M, for example, uses paper in products like Post-It notes and easel pads. But 3M sources paper from many suppliers, so the company doesn't view it as a core technology platform. Any company can buy bulk paper to use in their products, which is why it's not generally seen as a differentiator when it comes to innovation. As a result, 3M focuses on platforms it can control and apply to new products in ways that most competitors cannot.
Similarly, Cisco isn't trying to write code to advance every open source software tool. Rather, Cisco looks at the specific software where customers have the greatest need and Cisco has the most expertise to offer. For example, of the dozens of open source software tools available, some are more vulnerable to security breaches than others. Cisco focuses on building out its security consulting services specifically geared to customers using the software that could most benefit from additional security support, essentially defining its platform (e.g., security implementation) in relation to a given open source tool.
Technology platforms serve as the foundation for product and service innovation, and the best platforms help create market differentiation.
Develop Platforms with Customers
Technology is just technology until it solves a customer problem. In today's world focused on design thinking, the customer experience, and customer centricity, it can feel counter-intuitive to focus on technology-driven innovation. But the best technology platforms clearly outline the customer benefits or problems that they can help address, so they're connected to what really adds value to the market.
Cisco, for example, started working with a major US wireless communications giant to help the company optimize an open source data analytics tool called PNDA (pronounced "Panda"). Lots of data passes through the service provider's network every day in the form of calls, texts, videos, augmented and virtual reality games, and other mobile internet traffic. PNDA helps companies collect, capture, and analyze this data while creating visual reports for what's happening across the network. While the PNDA open source software is great for understanding what's currently going on, by itself it doesn't provide prescriptive actions to take - which is important if you're trying to ensure that the network doesn't get "clogged up" and slow down for end-user customers. With this insight and working alongside their customer, Cisco built rules around what to do with PNDA's reports to prevent network outages and keep things running smoothly, before problems occur. The approach helped Cisco uncover a market need while concurrently validating the value of further investments into its PNDA "implementation" and "development" services platforms.
Combine Platforms to Innovate
Individual technology platforms are the springboard for innovating new products and services. That's how 3M used adhesives to make Command strips.
New market opportunities often come from combining platforms. 3M's periodical table of technology platforms allows its engineers to mix and match technologies to easily explore new possibilities and quickly create new products. 3M's high performance Window Films, for example, are a combination of four platforms: Adhesives, Films, Nano-technology, and Light Management. By combining these technologies, 3M has tapped into a variety of new markets like window tinting for cars, energy management for commercial buildings through tinted glass, and security glass for windows to prevent shattering from break-ins and earthquakes.
Cisco achieved similar synergies when it applied its "development" and "implementation" platforms in its work on PNDA. Through combining these two platforms into a single high value solution for telecommunication service providers, Cisco now has an offering for other customers that can be scaled across the market.
Keep It Simple
While the word "platform" is as buzzwordy as "disruption" these days, any company can tap into the power of technology platform innovation by keeping things simple. Define what makes your offerings truly unique, classify these capabilities in whatever way makes the most sense, and then turn people loose to explore, combine, and create solutions with customers that solve real problems.
That's how to create a culture of innovation. And that's how to become a long-term innovator.