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.TRANSCRIPT
Digital Disruption: Unleashing the Next Wave of Innovation
http://solutions.forrester.com/disruption
James L. McQuivey, Ph.D. Vice President, Principal Analyst @jmcquivey
The barriers to entry in your market just vanished. Are you ready?
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A disruption long in the making
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Two objections to digital disruption
1 People will never do that
2 It will cost too much to do
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
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
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
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
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
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.
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
Disney continues innovating the adjacent possible
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
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
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
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
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?
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
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.
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?
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
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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.