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CDF Key Takeaways – Disruptive Innovation & Technology

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Key Takeaways from Disruptive Innovation & Technology

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  • Disruptive innovation and incremental innovation are different. Incremental innovation leads to small improvements that don’t disrupt entire business models.
  • Disruptive Innovation comes from adjacent markets (look at your largest supplier and who else to they sell to) and caters to smaller segments served of the market who want simpler, less expensive solutions.
  • Innovation generally requires a budget set aside for ideas that may not work out, as many innovative ideas fail.
  • Look at how the organization and the CEO respond to failure to determine whether there is a cultural problem. Are people punished, or are failures presented as a learning opportunity? There will be lots of failures, and failures are expensive.
  • Disruption MUST be CEO-led and championed, not delegated to others.
  • The board has a fiduciary responsibility to think about potential disruptors. They should ask how specific technologies could disrupt the business and come up with scenarios and forecasts, to prepare for it. Boards should never settle for “We’ll see what happens.”
  • Companies have many ways to learn (acquisitions, partnerships, R&D) what they might be up against.
  • Looking for new opportunities is an offensive strategy and serves as the best defense to potential disruption.
  • Pay attention to the relationship between confidence and competence. Often the more confident one is, the less competent they are. Those who realize they don’t know it all, will be more open minded and willing to try new strategies to avoid disruption or to become the disruptors.
  • Developing expertise in-house. This will also help you to hire the right experts, because these individuals will ask the right questions.
  • You need to become a technology company in order to survive. Think about how the internet was an industry on its own, and now all companies use the internet, even if just for a webpage. This is how technology is working.
  • Homogenous boards are dangerous. Boards need diversity. Do the shoe test. Shoes are not the same in a diverse group of people.
  • Have conversations with the board about data and how it might help you to make decisions.
    • Data should be clean, useful and under your control.

The importance of customer-centricity

  • Understand the customer journey. Do not get too isolated in the C-Suite.
    • Use customer-centric grounding to create a unique customer strategy.
    • Use technology as a tool and get help from / talk to experts.

The Chief Digital Officer

  • This is a catalyst function to cross boundaries across the domains with speed.
  • Business leaders are often entrenched and interested in protecting their turf. This external function intercedes to help with disruption and innovation.
  • It is likely a transition role
  • Make sure the CEO buys-in to any changes. Workarounds won’t work in the long-term due to the speed of change.

Trends: Geographically and across industries

  • The greatest number of patent filings for intellectual property (IP) are coming from China and the United States.
  • Technology companies will be disruptive.
  • Public awareness of IP has increased.
  • Work with the FBI to prevent IP theft. Learn from experiences of others.


  • China has 50 times more mobile payments than the United States.
    • Legacy systems are the barrier in the U.S. due to credit cards
  • China is a surveillance state with less care for privacy and are therefore able to collect massive amounts of data.
  • This gives them a market speed advantage.
  • Chinese will use legal framework, market forces, cyber means to acquire IP.
  • China is able to innovate with speed. It is hard to compete with Shenzhen time. They evolve and grow quickly and will be the largest country economy.

Blockchain and Smart Contracts:

  • A blockchain is a ledger distributed among computers. It solves the problem of trust and is driven by efficiencies (i.e. – supply chain efficiencies).
  • A smart contract consists of pieces of code that store, verify, and self-execute rules.
  • Envision a world with a number of blockchains, some of which are not yet here.
    • Interoperability is the challenge
  • Will your industry be disrupted by blockchain, and are you prepared?
  • Permission-based or permission-less blockchain will transform healthcare, for example.



  • Look at the customer centricity strategy and what information systems you currently have in place.
  • Read! The last book he read “The Business of Platforms- How Digital Platforms are Changing Business Models and Strategies” – Professor from MIT


  • Disruption is here. It is a normal trend of history and is not going away.
  • Learn by doing.
  • Make sure experts come from top-ranked universities, governments, etc.


  • Get a budget for failure and allocate funds to skunkworks.


  • Recognize other countries are leveraging the nation-state and aren’t playing by the same rules.
  • The only way we can win is for the private and public sectors to work together with healthy relationships.