Technology continues to transform business: whether it is artificial intelligence (AI), blockchain, cloud computing or augmented reality. Managers must understand both the potential as well as the risks these technologies pose. How can companies leverage innovative thinking to transform themselves?
Every company today faces opportunities and threats from technologies, even if the company itself is not a high-tech company. A large body of evidence shows that companies must innovate or die—they must be willing to adopt new strategies even if those new strategies are in conflict with their existing ways of doing business. Because, if they stick with status-quo thinking, new forms of competition are likely to make their existing business obsolete at some point—in other words, the unwillingness to cannibalize existing strategies can lead a company to being “Amazoned”—i.e., outcompeted by new business models leveraging new technologies.
Hence, companies must cultivate and maintain a culture of innovation, which is exhibited through a variety of organizational values and beliefs, such as:
- Having a process for conducting mini-experiments with novel techniques and products,
- Not penalizing failure, but instead learning through failure,
- Developing a healthy risk tolerance capability,
- Enhancing interdisciplinary thinking in teams.
These values and beliefs must start with top management, through a clear vision and mission, and be diffused throughout the organization with appropriate procedures and policies that reward innovation and creative thinking.
As a final example, companies are increasingly relying on a new form of business strategy, called “platform competition;” platforms provide a place where two groups –say providers and users – can offer and find solutions to their mutual needs. Two classic examples of platform companies are Airbnb and Uber. Given the transformative power of platforms in the marketplace, many companies (Nike, GE, and others) are transitioning their business models to leverage the power of platform thinking. Because they rely on technology to connect providers with users, platforms are a uniquely high-tech topic that is relevant for all types of companies.
You study challenges companies face in developing and commercializing break-through innovations, including a broad range of technologies. What are the main challenges for the companies from this perspective? What is important when high-tech companies develop and implement marketing strategies?
Companies developing and commercializing breakthrough (radical) innovations face more risk than other companies. This risk comes from many sources, including risk arising from product development, risk arising from uncertainties in the market/customer needs and risk arising from business networks and partners that will be required to provide key elements of the solution. For example, technology companies experience difficulties in knowing the best use cases for new technologies, in crafting compelling value propositions tailored appropriately for specific market segments and in lacking a customer/market orientation.
Not only do high-tech companies face greater risks, but they also face additional obstacles, including (for example) a technology (product)-centric orientation with a corresponding tendency to under-value/under-appreciate the necessary marketing capabilities for success. Studies show that success in high-tech markets requires strengths in both product/technology development AND in marketing competencies. Without both of these capabilities working in tandem, high-tech companies are not likely to succeed.
According to the previous question, what is the logic behind the technologies ranging from scientific innovations to innovations in restoration and ecology?
The idea here is that new technologies come in myriad forms and from a range of contexts. Naturally, when most people think of technology, they think quickly of product categories such as consumer electronics (games, phones, TVs, etc.), information technology (hardware, software, cloud computing), industrial equipment (robotics), medicine/bio-tech (genomics), AI (cuts across industries), photonics/lasers, automotive tech (self-driving cars) and telecommunications (5G networks).
What is important to know, however, is that even traditional companies—say consumer products companies and fast-moving consumer goods such as beverages or food products—develop innovations in ingredients, materials, business models and marketing strategies that also would be considered breakthrough innovation. Companies that provide services see innovations in their strategies as well. Hence, all companies can benefit from learning about best practices in developing and diffusing innovations.
In my own research, which increasingly exists at the intersection of business and nature, I’ve been studying how innovations and technology can be used to restore degraded landscapes and preserve biodiversity—harnessing the power of drones, genomics and machine learning to better identify where to invest resources and to monitor the effectiveness of ecological restoration.
Your TEDx talks also deal with biomimicry, which means Business Innovations Inspired by Nature. How can companies use biomimicry to solve technical and engineering challenges?
Biomimicry is the process of learning from and then emulating nature's forms, processes, and ecosystems to:
a. Create products and materials with more sustainable designs,
b. Develop processes and policies (structures and systems)—new ways of living—that leverage nature’s approaches,
c. Produce materials, buildings and structures modelled on biological entities and processes.
Companies use biomimicry to solve intractable problems that nature has already solved—such as how to remove salt from water, how to create materials that are both lightweight and strong, how to prevent impact concussions or how to design urban structures to use less energy, to name just a few. I continue to research innovative industrial uses of biomimicry and the creative ways companies are harnessing this new tool for creativity, sustainability and innovation.
Your recent book Marketing of High-Technology Products and Innovations (3rd Edition) deals with the topic how to successfully market high-tech products. Is that related to the specific industries or the products? Any best practices from that perspective?
The frameworks for best practices marketing in my book are appropriate for companies who face turbulent environments—those characterized by risky investments in R&D, the emergence of new forms of competition and disruptive business models and, importantly, the difficulty to accurately gauge customer needs for adopting new technologies. Hence, the way companies conduct market research in these environments requires a new toolkit, including customer visits, ethnographic design/observation and scenario planning, to mention a few.
Best practices in high-technology marketing also include a unique approach to market segmentation (called “crossing the chasm”), crafting compelling value propositions that are much more quantitative in nature (emphasizing cost savings, revenue growth, etc.) and a marketing communications strategy focused more on thought leadership (content marketing and earned media) than paid media strategies.
Is there a difference between marketing of high-tech services on one hand and products on the other?
Because services are intangible, they face unique challenges that exacerbate the challenges high-tech environments pose. From a customer perspective, services cannot be reliably evaluated prior to purchase—instead, customers must rely on the service provider’s reputation and credibility. In addition, from a provider perspective, services (such as Information Technology consulting, for example) scale very differently than products (that can be manufactured and then inventoried). There are other differences as well, but the key point is that services marketing tends to involve additional consideration that product marketing does not.
Technology companies as well as a wide range of more traditional companies are increasingly moving to a service-model of delivery—think cloud computing, software as a service, open source AI tools, etc. “Servitising” products is an important way to offer new value to customers.