We will do this through a Decision Model Canvas for disruption. That is, a visual representation of how to manage the planning and execution of disruptive strategies. Business and technology leaders at large and small companies alike can use this canvas to map out company strategies and processes, and communicate the results to their team, their investors, and their partners.

Key findings of our analysis include the following:

• Many companies fail to take advantage of disruptive forces because of their traditional financial planning methods, slow decision-making process, and senior management’s distance. The Decision Model Canvas can help address all of those.
• Technology is not necessarily the key driver of disruption – new social arrangements around work are an essential ingredient and so too is a systematic approach to disruption as strategy.
• The attention given to business model innovation is often misplaced; where companies need to focus their attention is business process. Process does not need to imply business process outsourcing or radical changes in the supply chain – it can be as simple as a new participative (or crowd-based) strategy process or as radical as refocusing the company on platforms.
• The Decision Model Canvas will look at seven activities that companies go through when developing a disruption strategy. This is an overall picture that illustrates the need for new analysis, new competencies and new decision-making models, and guides readers through the essential questions they should ask at each step.

Decision Model Canvas for Disruption Planning

Source: Gigaom Research, Haydn Shaughnessy

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This analysis reviews the likely new models of industry disruption. Gigaom Research will work with the Gigaom community via a survey to test these new disruption hypotheses.

It’s important not to confuse disruption with competition. True disruption plays the role Christensen ascribes to it: changing the structure of markets, the participants within them, and the balance of power, rather than simply releasing ideas and products that might outweigh those of other players.

The following are new forms of industry disruption:

• Adjacency platforms, such as Alibaba’s Alipay, that organize emerging or existing ecosystems yet are also highly centralized, powerful hubs that deploy products, services, software, and payments. These platforms typically organize horizontal disruption (multiple lines of attack on a vertical industry) or show no respect for vertical borders.
• Decentralization and creative destruction describes Schumpeterian disruption that is ideologically driven by entrepreneurs whose goal is to disrupt oligopolies. This type of disruption is increasingly capable of rolling out alternative global services (e.g., Bitcoin,) using the homogeneity and connectedness of what’s typically the open-source community.
• New globalism enables disruption from a completely new technology and/or player, especially a software-defined competitor (e.g., Netflix in global video streaming) betting on a new global market and often taking advantage of global mobile access.
• The reverse data model implies the current dominance of the Google/Facebook model could be challenged by offerings that manage online identity and presence on behalf of customers. The customer becomes a significant, empowered node, rather than one that surrenders control to the platform provider.

Thumbnail image courtesy of hansslegers/iStock.

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But what happens to the enterprise when the IT-to-business reconnect is complete? This report argues that modern IT — that is, one that is cloud-based, platform-centric, and often making use of extensive partner ecosystems — allows companies to free themselves from old enterprise constraints. However, business management and IT organizations must address ensuing conceptual and business model issues:

• What we have come to define as a “technology platform” is changing. The classic API-and-services concept needs to be extended. IT is developing a far better understanding of the unique contribution of the strategic role of connector technologies (APIs, RSS, identity and billing systems) that create a platform for business connections.
• That business platform, often described as an ecosystem with the API supplier as “dominant species,” is morphing into something better described as a “federated organization” that gives us access to many new ideas about rapid business formation.
• Businesses that embrace modern IT create a new enterprise operating model (NeoM) that supports emerging business models and revenue options. They can also apply NeoM principals internally: In the case of pioneer companies like Netflix, for example, this means getting rid of departmental barriers by focusing team activity on internal platforms and teams.

The post The new enterprise operating model appeared first on Gigaom.

Ideally the organization needs a coherent approach to innovation, one that allows successes to be replicated and failures to provide lessons for the future. That means the different innovation techniques or priorities need a meeting place or a common basis of understanding. A software platform is the best place to provide that coherence and the replicability that goes with it. But four trends — open innovation, design thinking, lean innovation, and the transformation matrix — often run in parallel at an organization rather than in synchronized fashion. They also compete for executive attention.

Our Sector RoadMap^TM identifies six Disruption Vectors that tech buyers can use to aid in picking products that best suit their own situation. Suppliers can harness or drive the vectors for revenue and market share gains.

Key findings in our analysis include:

• Some platform vendors are attempting to reorient themselves away from their incremental innovation past to support enterprise transformation needs, the most critical Disruption Vector. Imaginatik has pivoted to become a full-service company with executive-level strategic advisory services. Spigit-Mindjet is looking closely at automating innovation processes, solving a profound problem in decision-making by providing innovation algorithms. And Hype is hoping to convert its strong track record in process innovation to a more strategic level.
• The acceleration of process innovation and product and service updates is the second most important vector. Innovation platforms are ill-fitted to this need because they tend to be idea-generation platforms.
• All platforms that we reviewed believe they have strong relevance and growth in the social-business vector because they are the strongest use case for social business. They are all equally well-prepared for this but need to think more about the challenge methodology that would drive integration with social business. Collective decision-making is another important vector, one in which the smaller platforms like Qmarkets are strong. The elasticity of using external production and design will eventually extend into the internet of things.
• The outlook for innovation platforms is strong, as we are now seeing increased venture capital activity and acquisition. The sector still needs to scale. It will do so when platform vendors get abreast of the C suite’s transformation requirements. Spigit-Mindjet, Hype, and Imaginatik seem well-placed to capitalize on that, but they also need to catalyze it and not wait for it to happen. With  Mindjet’s acquisition of Spigit and Imaginatik’s full-service offering, we are beginning to see more vision in the segment.

We evaluated a number of representative companies supplying innovation platforms. Currently Spigit-Mindjet and Hype are the suppliers best aligned with market forces. Imginatik is taking a bold bet on being the first to enter the C suite and become a strategic transformation adviser and support service. Brightidea has perhaps the strongest client base but still seems oriented around a traditional view of innovation, whereas Qmarkets is strong in decision-making, an area that could grow in importance as innovation projects proliferate.

Source: Gigaom Research

Thumbnail image courtesy of Wavebreakmedia LTD/Thinkstock.

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Companies can apply lean startup methods to their innovation and product-development process if they’re careful to avoid some of its pitfalls. In this paper we look at the upside and the dangers of lean.

Most larger companies have strict ROI or other financial metrics and stage-gate processes that dictate how product development should take place. Lean innovation plays comfortably into such a structure. It is the association with open innovation and business model innovation that makes lean more complex and encourages innovation.

Companies also have product-release cycles that can be severely disrupted by multiple lean projects with complex iteration cycles. And they are traditionally insight-driven rather than hands-on with customers in the product-development process. That means lean can be introduced into Skunk Works and other edge innovation processes but is much more difficult to get working in the mainstream of the organization.

Large companies need four main process innovations to exploit lean fully:

1. They need to introduce or expand customer iteration and adapt product-launch cycles and go-to-market strategy accordingly while creating investment capacity for customer-relationship development with early adopters.
2. They need to learn how to do brand and product positioning in real time, becoming masters of the art of pull — i.e., using social media to attract exciting communities around their projects.
3. They need to develop decision-making strategies that take advantage of lean innovation techniques like iteration and feedback loops.
4.  They need to adapt the accounting and forecasting capacity of the company to take account of continuous iteration.

Thumbnail image courtesy of baojia 1998/Thinkstock

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This Sector Roadmap^TM looks at the emerging infrastructure of product development and asks whether we have already passed the era of iconic design. It’s a little different than our Roadmaps that focus on a single product segment: In this analysis we examine key trends in design innovation that are shaping hardware in general, whether that is a cell phone, a toy, or a wearable medical device.

Of the common Disruption Vectors in this environment — the trends companies can drive or ride to revenue and market share gains — designing for devices is the most critical. Crowdfunding and the concept of radical adjacencies outside a company’s core product set are nearly as important. New materials, mass differentiation, and additive manufacturing are also movements that companies can harness.

Source: Gigaom Research

Other key findings in this Sector Roadmap include:

• The overarching driver of these trends is the device-ification of hardware products —how companies make products that embrace communications, software, and services, all informed by a variety of feedback loops.
• Engineers have previously worked in closed groups, but they are opening up to more modular design and more design sharing. Software concepts similar to open-source and iterative development are emerging in hardware design.
• The incumbents in the device economy won’t necessarily hold on to their leadership. Rather, companies as diverse as Nike, Intel, and Disney appear well-positioned to take advantage of these new trends in hardware design and innovation.

Thumbnail image courtesy of Flickr user kakissel

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This has immediate implications for companies in consumer products, electronics, and business technology sectors, and will force long-term disruptions in optics, biotech, robotics, and elsewhere. Capturing new design skills is essential. Recent opportunities in smartphones illustrate the limitations of current thinking. The availability of 3D printing, the creation of large hardware design communities with open source engineering, new materials for displays (such as printed electronics and quantum dot technology), and the gains of “always-on” consumers are doing little to change the actual form of the smartphone and peripherals such as smart watches, as seen in the recent offerings of major vendors like Apple and Samsung.

Understanding the business model impact is just as critical as the design implications:

• In this new world of devices, products are multifaceted and must integrate hardware, software, services, and connection. The successful designer in future will be able to create compelling usability across all these four elements and will fail if they do not have the right breadth of skills.
• At the same time, the mechanical and industrial engineers who design hardware are creating communities that have characteristics similar to those of the software community in the early days of object oriented computing — modularity, openness, and collaboration. These communities will accelerate hardware innovation the way that developers accelerate software solutions. Hardware innovation is about to become significantly easier, more collaborative, and more dynamic
• This hardware rejuvenation is in part enabled by technological convergence as display technology, 3D printing advances, and sensors all become more capable and cheaper. And underlying this trend is a more profound movement toward programmable materials or citizen-level biotechnology, which will widen the arena for disruption in hardware.
• The expansion of computing into many other areas and the growing availability of design communities are bringing new players into the space. The competition for design skills will be fierce as new opportunities tempt companies from seemingly unlikely origin to move in new directions: paper manufacturers into e-paper (paper as a device), medical firms into printed electronics, media firms (like Disney) into printable optics, and eco-firms into display.

The post The rebirth of hardware demands new definition of design appeared first on Gigaom.

This is the radical-adjacency approach: the decision to move into wholly new markets or to go to market with an entirely new class of product and to redefine the organizational form to succeed. The approach is called “adjacent” because it leverages a company’s experience but “radical” because the markets or technologies are several steps removed from the classic notion of an adjacent market or competency. Four strategies are emerging that embrace radical adjacency:

• Extensible competency
• Infrastructure utilization
• New market entrance
• Organizational transformation

Each of these involves enterprises in radical adjacencies away from the core. Successful practitioners of radical adjacency (Apple, IBM, Amazon, Google, Ericsson) tapped into one or more of the above. Their success built off four key factors:

• Radical adjacency as a fluid core with multiple, changing competencies
• Launching into a bigger market
• Reframing the strategic story
• Externalizing core processes

Key technologies make this possible: Cloud allows companies to partner and combine competencies into new service offerings, and mobile is forcing companies to be less and less monolithic and to take many small steps much more frequently to change how they function. Globalism, cloud, and mobile make it imperative to seek out the partner skills that give a company a new or persistent edge.

Source: flickr user marc falardeau

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Innovation activity is growing across many more markets than in the past. A rising proliferation of techniques, coupled with changing market conditions, means that today companies must manage many more projects and risk resources across a much wider panoply of options. At the same time, initiatives such as APIs and content syndication as well as mobile devices and apps are forcing companies to serve narrower markets. This narrow innovation has hardly registered as a genre, but it is being practiced in areas like media, telephony, travel, and anywhere else apps are found.

These challenges are driving systematic innovation, a process derived from Six Sigma quality practices that embrace two key concepts: lean innovation and algorithmic innovation, a key driver of innovation in companies like Samsung and Intel. Innovation will continue to evolve in 2013 and beyond, through:

• Enterprise crowdfunding
• Narrow innovation strategies
• A rebirth of manufacturing
• Moving from Six Sigma to algorithmic innovation

The post Rethinking innovation: How to manage ideas systematically appeared first on Gigaom.

This report examines the in-vehicle app landscape, focusing on the different types of car apps, the major players in the space and how each fits into the vehicle industry as more and more apps emerge.

The robust in-vehicle app environment is made up of three concurrent and overlapping modes:

• in the pocket, where the mobile phone is gradually being integrated with car control and car entertainment systems
• in the car, which consists of apps made specifically for the vehicle operating system
• in the cloud, a mode which consists of car apps, from those that provide traffic data to location-based ones, updatable on the fly

From these modes, a new class of services will emerge to exploit information, entertainment and education, all of which will be delivered via numerous routes: USB devices, smartphones, call centers, private-cloud services and, finally, direct from the public cloud in conjunction with newly emerging app stores.

However it needs stating that the auto sector is extremely small in comparison with the mobile phone sector (70 million annual sales vs. 1.4 billion, respectively). From 2015 onwards, applications that connect the car to the home, and that exploit battery and driver data, may become essential part of the green car experience, but this is a slow growing market. That means that the apps scene is far more interesting for offerings that address the existing market rather than new and emerging markets. Short-term opportunities lie in the pocket segment; the long-term opportunities lie in how we consumers, as well as the industry, can re-conceive the concept of mobility.

Looking ahead to the age of the electric vehicle and the smart grid, the in-vehicle app landscape will take another turn as it becomes a part of the same infrastructure that powers both our homes and offices. The electric car will change the vehicle industry once it reaches critical mass, but when this will happen is currently unclear. In the interim, a battle will take place over who controls the end-user experience among proliferating options.

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