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Digital Disruption: Unleashing the Next Wave of Innovation http://solutions.forrester.com/disruption James L. McQuivey, Ph.D. Vice President, Principal Analyst @jmcquivey

Digital Disruption: Unleashing the Next Wave of Innovation

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Your old business model won't work. Are you ready to face competitors taking advantage of disruptive technologies like mobile and social? To succeed, you, too, must become a disruptive force.

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Page 1: Digital Disruption: Unleashing the Next Wave of Innovation

Digital Disruption: Unleashing the Next Wave of Innovation

http://solutions.forrester.com/disruption

James L. McQuivey, Ph.D. Vice President, Principal Analyst @jmcquivey

Page 2: Digital Disruption: Unleashing the Next Wave of Innovation

The barriers to entry in your market just vanished. Are you ready?

Page 3: Digital Disruption: Unleashing the Next Wave of Innovation

© 2013 Forrester Research, Inc. Reproduction Prohibited © 2013 Forrester Research, Inc. Reproduction Prohibited

A disruption long in the making

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© 2013 Forrester Research, Inc. Reproduction Prohibited © 2013 Forrester Research, Inc. Reproduction Prohibited

Two objections to digital disruption

1 People will never do that

2 It will cost too much to do

Page 5: Digital Disruption: Unleashing the Next Wave of Innovation

Digital disruption epitomized

They become digital disruptors

“When companies adopt

technology, they do old

things in new ways;

when companies internalize

technology, they find

disruptive new things to

do.”

adopt

internalize

Page 6: Digital Disruption: Unleashing the Next Wave of Innovation

Digital disruptors do this

› They will build Better product experiences

› That create Stronger customer

relationships

› Bringing it all to market Faster

You have to do this, too

Faster

Better

Stronger

Page 7: Digital Disruption: Unleashing the Next Wave of Innovation

Old disruption Digital disruption

10x the inn o v a t ors

1/10th the c ost

100X the p o w er

Digital disruption is better, stronger, faster

Source: October 27, 2011, “The Disruptor’s Handbook” Forrester report

Page 8: Digital Disruption: Unleashing the Next Wave of Innovation

Your customers and employees have already invested in the devices you’ll depend on

Tablets are a symptom, not a cause, of disruption

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Digital disruption is built on digital platforms

› Devices lay the foundation

› Software builds the experience on top of it

› Consumers believe in it

Digital platforms provide the infrastructure of the digitally disrupted economy

Page 10: Digital Disruption: Unleashing the Next Wave of Innovation

The five platforms vying for consumer control

• Tools to connect to consumers

• Open development environments

• Infrastructure resources

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To enable the next product experiences, you must digitally

disrupt your product and your process Product Process

Page 12: Digital Disruption: Unleashing the Next Wave of Innovation

Step 1: Harness digital consumers

60+ million

155+ million

30+ million

Apple took two years to sell 1 million iPods.

employees & partners

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Step 2: Generate more ideas more quickly BY INNOVATING THE ADJACENT POSSIBLE

?

Don’t build the future; build the next thing people really need and let the future find you.

Page 14: Digital Disruption: Unleashing the Next Wave of Innovation

Disney: a big company gone disruptive

▪ Disney learned from Angry Birds

what people wanted next, creating

‘Where’s My Water?’

▪ This tests the waters for Disney in

apps and YouTube – both critical

fronts in the digital media future

▪ Importantly, it gave Disney the

chance to innovate adjacent

possibilities

Page 15: Digital Disruption: Unleashing the Next Wave of Innovation

Disney continues innovating the adjacent possible

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Section 3: Deliver total product experiences

Total product experiences go beyond traditional boundaries — onto new platforms, during new moments, leading to deeper, more measurable customer engagement and satisfaction

Page 17: Digital Disruption: Unleashing the Next Wave of Innovation

Mirror, Mirror on the wall…

Digital disruption yet to come: the Magic Mirror

Magic Mirror

Eyes Hair

Lips Skin

Image source: August 4, 2011, “Innovating The Adjacent Possible” Forrester report

Page 18: Digital Disruption: Unleashing the Next Wave of Innovation

Mirror, Mirror on the wall…

Digital disruption yet to come: the Magic Mirror

Magic Mirror

Eyes Hair

Lips Skin

Call Kerry

Image source: August 4, 2011, “Innovating The Adjacent Possible” Forrester report

Page 19: Digital Disruption: Unleashing the Next Wave of Innovation

Mirror, Mirror on the wall…

Digital disruption yet to come: the Magic Mirror

Magic Mirror Eyes

Hair Lips

Skin

Call Kerry

Image source: August 4, 2011, “Innovating The Adjacent Possible” Forrester report

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For which companies is the Magic Mirror an adjacent product experience? › Media companies have the content

› Retailers sell the products

› Manufacturers want the customer loyalty

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For which companies is the Magic Mirror an adjacent product experience? › Media companies have the content

› Retailers sell the products

› Manufacturers want the customer loyalty

› Platforms want to enable all of it

What is the most unexpected place you will serve your customer in the

future?

Page 23: Digital Disruption: Unleashing the Next Wave of Innovation

Nestle off to a good start with its product innovation

› BabyNes: A high-end baby formula preparation device

› Good: Customer-focused, built in cross-functional R&D team, funded independently

› Better: Copy Withings

Page 24: Digital Disruption: Unleashing the Next Wave of Innovation

UPS launches a new, revenue-generating customer relationship

UPS has created a freemium-to-subscription business relationship with 2.5 million recipients of its packages, giving them the opportunity to use apps and web experiences to opt for better delivery outcomes – change of time or location. This has created new revenue opportunity for UPS as some of its customers pay $40 a year to have even more customized delivery options.

Page 25: Digital Disruption: Unleashing the Next Wave of Innovation

A large payments processor saves time, money, and increases security

By taking advantage of Terracotta’s BigMemory in-memory data processing cloud, this financial services company has gone from applying just 50 fraud detection rules to thousands, dramatically improving accuracy while lifting transaction processing limits by 30x. The result is an estimated $10 million a year saved from fraud detection mistakes and fees for latency

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Questions for aspiring digital disruptors:

› How will you create an ongoing digital customer relationship?

› How will you generate more ideas more quickly?

› What does your total product experience look like?

› What is the role of technology & operations?

› What partners will get you there quickly?

What does it take to do this?

Page 27: Digital Disruption: Unleashing the Next Wave of Innovation

The path to disruption › Senior-level commitment to putting the customer first

› Disrupt the process in order to disrupt the product

› Give authority to small teams to generate focused innovations

› Test and measure; expect and accept failure

› Partner to get there quickly

Release the disruptor within

Page 28: Digital Disruption: Unleashing the Next Wave of Innovation

© 2013 Forrester Research, Inc. Reproduction Prohibited © 2013 Forrester Research, Inc. Reproduction Prohibited

What do I do now? Find out more about digital disruption: see videos, take a self-assessment, and download free chapters from the book by James McQuivey: http://solutions.forrester.com/disruption Forrester wrote the book on Digital Disruption: Buy it now on Amazon.com.