Happy New Year!
“[A]s night follows day,” the New Year brings with it a plethora of articles proclaiming ‘2023’s top ten technologies’. Fascinating as some are—my favorite (unsurprisingly) being MIT Technology Review— pay them no heed. The quote excerpted above goes on: “This above all: to thine own self be true.” Heed that advice. Rather than look at lots of lists of the latest technologies—many of which will prove to be over-hyped and irrelevant, or may take many years to bear fruit—focus instead on what can actually create a more prosperous future in these turbulent times for your particular firm.
‘The new abnormal’
We cannot return to the status quo ante, and there’s not much hope of in the foreseeable future for any ‘new normal’, so we are all now trying to figure out how to survive, and hopefully to thrive, in what at Endeavour.Partners we have come to call the ‘new abnormal‘¹. Recent experience has changed our perspective on what this will take.
Breakthrough innovation is now critical to surviving, let alone thriving
As a business leader in this new epoch, don’t focus on generic technologies and trends that might — but much more likely won’t — prove relevant to you and your firm. Instead shift and narrow your focus to investing aggressively in figuring out which are the few key technologies that will really be relevant to your particular company and its peculiar circumstances — in particular digital tech such as IoT, AI and robotics, and other deep tech’ — and in how you can harness these technologies to create new value through breakthrough innovation.
Breakthrough innovation — products and services that are ‘new to the world’, almost always comprising novel combinations of available enabling technologies — is now no longer ‘nice to have’, or even just ‘an attractive opportunity’ (although it does typically deliver the highest RoI, creating about 70% of new value from just 10% of spend)², it has become a necessity.
Incremental innovation has long been deemed necessary, although not necessarily sufficient; now, however, much of it is no longer necessary, it’s definitely not sufficient, and investing in it may even be harmful. For example, digital automation that increases efficiency, saving time and money, but in so doing impedes innovation or reduces resilience may hazard rather than help your business’s prospects in this more dynamic and uncertain epoch. Indeed in many cases the best option may be to simplify the business and just walk away from legacy products, processes and platforms, rather than investing more in improving them.
If you cannot successfully shift from exploitation to exploration — from protecting and perpetuating the profits that come from capitalizing on your company’s accumulated resources to becoming a digital and deep tech explorer creating new value — you are likely doomed to decline and demise as a result of disruption by digitally empowered tech ventures, or being eclipsed by other established enterprises, your erstwhile peers, who move earlier or more effectively.
Powerful new technologies
Over the last few years several powerful new technologies have emerged that are transforming the business landscape.
Some have very broad and deep reach; five key digital technologies in particular — smartphones; cloud services; the Internet of things (IoT); artificial intelligence (AI); and advanced robotics — are General Purpose Technologies (GPTs), having an impact throughout the economy. They are rapidly reshaping our world; empowering people in their daily lives; catalyzing connections and enabling new business models; revolutionizing the world of work and unleashing creativity by automating routine and narrow tasks; accelerating innovation; and energizing entrepreneurship³.
Their impact is at least as powerful as prior GPTs — such as the printing press, steam power and electricity — and their uptake is happening much more rapidly, over just a few years. Their potential was apparent even before COVID and its dramatic acceleration of their adoption, infecting almost all of us with heightened awareness of what they could do and what they will be able to do, driving irreversible shifts in people’s preferences.
Other deep technologies — such as additive manufacturing (3D printing), solar panels and offshore wind power, electric vehicles, alternative proteins and gene-editing— have profound impact in specific sectors. And some — such as blockchain⁴, augmented reality (AR), and the metaverse, ⁵ ⁶ have demonstrated that despite falling far short of the hype about them, they can deliver real value in appropriate applications.
Polycrisis; or Chicxulub
And at the same time, we’re also suffering through several other major disruptions — such as climate change and social strife — driving a surge in recognition of the importance of technology and technological innovation being sustainable, ethical and equitable, and humane, and also of the increased importance of strategic resilience.
Some are now using the term ‘polycrisis’— “… interlocking and simultaneous crises of an environmental, geopolitical and economic nature” — to describe this new abnormal⁷:
If you have found the past few years stressful and disorientating, if your life has already been disrupted, it is time to brace. Our tightrope walk with no end is only going to become more precarious and nerve-racking
John Smith, CEO, ACME Co.
We’ve been using Chicxulub — the meteorite whose impact marked the beginning of our current geologic era⁸ — as an analogy to describe the combined impact of these disruptions. Although it exterminated three-quarters of all plant and animal species, including all (non-avian) dinosaurs whose scale had made them hitherto the dominant terrestrial animals, it also opened up abundant new ecological opportunities and the new epoch saw a massive surge in evolutionary innovation, with rapid and radical diversification into new forms and species in pursuit of new niches.
Foresight and anticipation
In this new epoch a significant shift of investment to breakthrough innovation is essential for established enterprises.
Pioneering computer scientist Alan Kay⁹ said, “The best way to predict the future is to invent it.”
It’s time to invent your firm’s more prosperous future.
First, that requires foresight, anticipating how the environment will evolve, identifying those specific key technologies that can be game-changers for your firm, and how they will co-evolve with people’s changing preferences. Next it needs insight, figuring out the connections amongst your company’s current resources, these powerful new technologies and new demand opportunities. Then it calls for creativity, coming up with novel combinations of technologies that provide the basis for compelling new products and services.
Acuity and ambidexterity
The foundation for this is a shift in focus of time and attention away from inside the organization to the wider world outside, strengthening acuity—sharpness of vision and thought. It also demands ambidexterity, organizing so that the firm can explore these opportunities and build new businesses while at the same time sustaining its current core, the established businesses—albeit likely with much more limited investment.
Novel combinations nearby
Critically, pursuing these new opportunities need not necessitate voyaging far afield.
The most promising opportunities are often found in novel combinations adjacent to or nearby your company’s current competences and capabilities¹⁰; most firms need not venture into uncharted territory, terra incognita (although kudos to those who do, such as our namesake HMS Endeavour)¹¹.
Building tech titans step-by-step
This is how the world’s most successful tech businesses, with whom we’ve worked over many years, become global leaders. It’s how historically Nokia evolved from electric cables through consumer electronics to global leadership in mobile phones, combining its cellular know-how with flexible new digital technologies and a simple and easy ‘soft-key’ user interface (before allowing itself to be disrupted by a novel combination of technologies in the form of the modern smartphone). It’s how Apple supplanted Nokia and became a trillion dollar business, despite near-death experiences along the way, evolving step-by step from the Apple II through the Mac, iMac and iPod to the iPhone, which combined its computing and media tech with cellular connectivity, an intuitive multi-touch user interface, and an app store. It’s exactly what Tesla announced it would do and then delivered over the last decade as it went from roadster through luxury sedan to mass-market crossover and revenues of tens of billions of dollars¹².
Indeed, as I described at a recent MIT conference, perhaps the most powerful technology that the tech sector has produced is not so much hardware or software, but rather its distinctive approach to strategic management, which amongst other things requires relentlessly pursuing renewal.
In the coming days and weeks we will be expanding on these topics, and as we do periodically we will also be pursuing some research to explore them further. And we’d welcome your thoughts; please don’t hesitate to get in touch with us either here, or via our website at endeavour.partners.
These challenges and how to address them are the primary focus of one of the programs that I teach, at MIT ‘Breakthrough Innovation: Creating Value in Times of Uncertainty’.Back to Insights
- Not the album ‘The New Abnormal’ by ‘The Strokes’ which, nine years after its predecessor, released in April 2020 as the pandemic exploded, and won the Grammy Award for Best Rock Album in 2021
- See for example ‘Managing your innovation portfolio’ by Bansi Nagji and Geoff Tuff in Harvard Business Review in May 2012, available at https://hbr.org/2012/05/managing-your-innovation-portfolio
- See for example my article ‘The economy is digital’ available at https://www.london.edu/think/the-economy-is-digital
- Encompassing more broadly distributed ledger technology (DLT) in general
- Encompassing more broadly virtual reality (VR) in general
- Although we considered quantum computing for inclusion in this category, it has not yet demonstrated any real world commercial value; see for example ‘Hype around quantum computing recedes over lack of practical uses’ by Richard Waters in the Financial Times on 10 January 2023, available at https://www.ft.com/content/d64e45b4-692a-429e-bc64-146303ec7fdf
- From ‘Year in a word: Polycrisis’ by Jonathan Derbyshire in the Financial Times on 1 January 2023, availabel at https://www.ft.com/content/f6c4f63c-aa71-46f0-a0a7-c2a4c4a3c0f1 and ‘Welcome to the world of the polycrisis’ by Adam Tooze in the Financial Times on 28 October 2022, available at https://www.ft.com/content/498398e7-11b1-494b-9cd3-6d669dc3de33
- The current geologic era is the Cenozoic era
- Alan Kay is the father of both the graphical user interface and object-oriented programming that have become the dominant design for modern computing
- See for example, ‘The double-edged sword of recombination in breakthrough innovation’ by Sarah Kaplan, and Keyvan Vakili, located at https://onlinelibrary.wiley.com/doi/abs/10.1002/smj.2294
- Her Majesty’s Bark Endeavour was Captain James Cook’s ship in which he completed his first voyage of discovery in the South Pacific from 1768 to 1771
- See ‘The Secret Tesla Motors Master Plan (just between you and me)’ published in 2006 (sic) available at https://www.tesla.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me