For CEOs, timing is everything. Invest ahead of the curve and shareholders punish you for wasting precious cash. Invest too late and you may miss the boat entirely (e.g., Kodak) or end up paying royally for risky catch-up acquisitions (e.g., Time Warner)
The current set of digital disruptions present a particular timing challenge. Businesses need to time their investments like a surfer catching a wave. But in this digital sea, the waves (e.g., mobile, IOT, machine learning) are coming from multiple directions, at different speeds and varying amplitude.
So what are successful ‘innovation surfers’ doing differently? Here are a few approaches that seem to work:
Get close to the source of the wave. Spend time at the epicentre of disruption to understand what may be coming and when. Importantly not all digital waves comes from the Silicon Valley. Finance companies such as Ping An are driving innovation from Asia. London is evolving a machine learning cluster around Google’s Deep Mind. Some firms are setting up research arms close to these innovation sources, others are arranging regular (e.g. semi-annual) tours for the executive team.
Detect waves as they approach. Weak signals generated within company MIS (e.g., sudden changes in channel mix) can yield critical insights. All too often these signals are ignored, as they are often deep into the ‘long tail’ of data. Some firms are setting up dedicated advanced analytics teams to crunch MIS data for exactly such insights.
Improve reaction time. Spotting a wave is one thing, catching it is another. Firms are improving agility by flattening organisational structures, simplifying governance and reducing time to market. Much can be learned from IT.
Commit sparingly and whole-heartedly. All too often firms try to ‘hedge their bets’ by making small investments across multiple different disruptions. Like a surfer trying to ride without paying full attention, that approach is doomed to failure. Better to pick a small wave and ride it to its conclusion.
Surfing waves is hard, surfing disruption harder still. CEOs need to learn to surf like champions.