Is your organization equipped for breakthrough innovation?

Companies need a deliberate strategy for breakthrough innovation to reinvent the enterprise. The pace of technological change is already a primary force of disruption causing companies to accelerate their reinvention strategies. Now, cloud, AI and the metaverse are accelerating into megatrends that have the potential to dramatically speed up the pace of technological change, bend the innovation curve and become a crucial part of every organization’s value chain.

Cloud, AI and metaverse form the foundation of a strong digital core, which is a source of competitive advantage in a time of unprecedented uncertainty and opportunity, when business reinvention must be continuous. With a digital core in place, every company can aspire to create breakthrough innovations in their industry and adjacent markets— a territory that was formerly the domain of digital native companies.

Breakthrough innovation sits at the intersection of understanding the potential of next generation technologies and applying them in novel ways to shape and capture white space opportunities and address acute needs in their business or industry.

We believe companies can engineer breakthrough innovations. To understand how this happens, executives should first understand what makes an innovation rise to the level of “breakthrough.”

In our experience, breakthrough innovations have one of three fundamental characteristics that set them apart:

1. Establish category-defining new products, services and experiences – beyond growth and profitability, these breakthrough innovations spark entirely new businesses and categories of business; e.g. digital payment and settlement platforms, such as India’s universal payments platform, as well as Apple Pay, Google Pay and PayPal; Square, Stripe and Moven.
2. Significantly compress time to value. For example, by re-using learnings from one business segment to accelerate breakthroughs in another, the way AWS used the success of Alexa’s conversational AI intelligence in the consumer market to capture a huge share of the enterprise contact-center market. 
3. Dramatically reduced cost of development. Today’s technologies make it possible to drastically cut development and associated costs, such as industrial manufacturers piggybacking on cloud, edge and 5G advancements to modernize manufacturing facilities without having to “rip and replace.” 

Building on a strong digital core, we believe three distinct capabilities can enable a quantum leap in performance enabling companies achieve breakthrough innovation:

1. Platform-based business models that create new marketplaces and value chains, as Rivian, the up-start electric vehicle company, is doing by offering insurance tailored to how, when and where their customers drive, through a collaboration with Nationwide.
2. Deploying next-generation intelligence, including computer vision, and large language models. In computational biology, language models are being used to predict protein structures, which can accelerate efforts to understand the building blocks of cells and advance drug discovery.
3. Exploiting computational and algorithmic advances, including specialized semiconductor chips and advanced computing systems like quantum, neuromorphic and swarm computing. For example, computational and algorithmic advances will allow researchers to analyze the staggeringly complex human microbiome and unlock new insights.  

We are at a unique inflection point. Now is the time for companies to harness the power of cloud, AI and metaverse to establish a digital core and capitalize on the next generation of technology advances. We are inspired by many examples of breakthrough innovations happening already and technology’s power to help companies continuously reinvent their enterprise. By jettisoning a mindset of incremental innovation and embracing breakthrough approaches, business leaders will dramatically reshape their companies, entire industries and broader society.