By Kevin Susman, VP of Brand and Communications, MATRIXX Software

I lead innovation workshops all over the world for companies seeking to extract greater value from their digital transformation investments. While it may seem there is nothing left to teach on the subject, it is clear from the many individuals I work with that, somewhere between the intention of digital transformation and the implementation of it, businesses have lost sight of its commercial benefits.

It’s not that the companies I counsel in my Art of the Possible workshops don’t want to transform. They do. It’s not that they lack expertise or capability or even desire or effort. These are smart, capable, experienced people. Yet they all share a common thread, a sort of analysis paralysis— with so many options to choose from, so many ways they could evolve their commercial models, they suffer paralysis of choice, and subsequently choose nothing.  More than technology, more than analysis, more than consultation, what most teams need, at the risk of sounding cliché, is an instigator to help them think differently.

I hesitate to use the word “innovation,” because it is so widely overused and misused. Many believe they are innovative, even more transact upon it. But innovation is precisely what these and so many organizations need, if only they could even agree to what innovation is. Which is why in my workshops, we have to begin by resetting entirely on what innovation even means: is it new or is it innovative?

At first glance, you may think these are one in the same. In fact, when I quiz participants whether a product is new or innovative, most aren’t even sure where to begin with making the assessment. As we work to push deeper and the edges of both terms grow sharper, it becomes clear how new and innovative represent fundamentally different strategic objectives.

Are you defining innovation correctly?

For the purpose of my work, I define innovation as the fundamental reimagining of the established way of doing things. To compete on the innovation front, it’s not enough to have something new that looks or performs differently or even better. Innovative features and capabilities are not enough, either. Instead, the entirety of the ownership experience must be fundamentally different. Tesla is a good example of an innovative company. No matter what you think of their vehicles, it doesn’t change the fact that everything from how you buy their cars to how their technology continuously evolves over time, has created a radically reinvented car ownership experience.

Setting aside the obvious reasons why creating an entirely new experience is so difficult, it is compounded for traditional, analog organizations that need to commercially transform themselves. In order to create true innovation, there must be an acceptance that the market is inefficient and/or flawed. For those incumbent players who have successfully thrived on those very market inefficiencies, there is a real struggle with letting go of the status quo. One of the reasons disruptors thrive is that, much like Tesla, they have the advantage of a clean slate. Many companies do not.

This doesn’t mean analog companies should accept defeat and forego innovation entirely. Commercial innovation can yield tremendous benefit. Just as Sun Tzu pointed out in the Art of War, home-field advantage affords a huge upside. It forces your competitors to compete on your ground and your terms. Innovative products work in a similar way. By destroying established norms, you are, in effect, forcing everyone else to compete on the expectations your product has set. Unlike with first-mover advantage, commercial innovation truly disrupts competitors that are not fundamentally organized to compete against those new expectations.

The power of new

Innovation isn’t the only way to make money in the marketplace, however. Apple is a brilliant example of a company that has become hugely profitable by monetizing the new. As a commercial strategy, new is built on a much simpler premise—to continually improve upon the product in order to extract greater value from it. In many ways, new is much easier to implement for a go-to-market and commercial strategy. As opposed to status quo-destroying innovation, the success or failure of a new product or service is based upon already established expectations. Not to oversimplify, but winning with new is about better execution than the competition, as opposed to better innovation.

Which is exactly why it is so important for analog companies to distinguish between the two. Consider, for example, the BMW i3. It was launched in 2012, the same year as the Tesla Model S. However, unlike the Tesla, the i3 you own is the i3 you bought. The car is loaded with exciting, inventive features; however, from a market perspective, all those features simply added up to a new car, not an innovative BMW. The result? The BMW i3 suffered from being forced to compete on the terms being defined by the innovative Tesla Model S.  The i3’s disappointing sales numbers, and subsequent discontinuation in the US, are compelling proof of what can happen when new and innovative are confused.    

Separating new and innovative and then making them both work for you

When considering digital transformation through the lens of innovation, it is tempting to want to always do more. Implement more technology, create more services or add more functionality to your product. This mindset leads many companies to fixate too much on the competition, or fall victim to an endless pursuit of the killer use case. In reality, the best way to overcome paralysis of choice is to relentlessly cull and do less. By rethinking the implications of innovation, analog companies can focus on delivering greater value for their customers, and that becomes the North Star for the innovation journey.

What about commercializing the new? Similar to the innovation journey, such requires abandoning the one killer use case. However, where it differs, is by recognizing that succeeding with new is about embracing a kaleidoscope of incremental improvements that collectively deliver improved value across multiple dimensions–rapid iteration, experimentation as part of the culture. The result? New experiences, new services, new products, new journeys, new campaigns, all adding up to a better and more compelling experience for customers.

Embrace the difference to deliver successes

For analog companies looking to eliminate paralysis and succeed with transformation, disentangling the new from the innovative in a commercial strategy is imperative. As hard as it is to accept, there is no one-size-fits-all approach. 

They will need their technology investments to make themselves better than the competition so they can compete with the new. Whether those improvements are in user experience, product mix, speed of experimentation, or all of these things and more, they will need to move quickly and experiment often to give their customers greater value which translates into a better bottom-line.

In addition, they must develop a greater tolerance for risk such that they can embrace innovation. This will require accepting that they have benefitted from market inefficiencies that now need to be destroyed, and then looking for ways to maximize the upside to their business while minimizing the fallout. Perhaps just as difficult, when they do pivot, they’ll need to remember that their brand is built on their promises and the expectations of their customers.


In truth, the analog companies I advise will require both new and innovation strategies in order to succeed. What will add value in one market will be meaningless in another. What will work for one company won’t for another, and none of it will happen overnight. But by culling options, and asking how they could do things entirely differently, participants can refocus on what’s important - guiding their key stakeholders to identify where opportunities for new exist, and then shaping and informing innovation investments to achieve transformative results.

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