The case for disruptive innovation
Disruptive forces could help telcos discover new opportunities for innovation and growth in the longer term. John McDonald is a strategist in disruptive innovation in the health industry in Canada. He takes a highly strategic approach to building alignment on emerging risks and opportunities three to five years out, centred on disruptive innovation, helping corporates see the world like a disruptor, and helping disruptors see the world like a corporate. He has evolved a couple of methods to help leaders build alignment around the forces of disruption, which appear unstructured and unpredictable, but which are easily understandable with the right structure.
- John argues that telcos need a genuine understanding of the forces of disruption, which are unfolding at an ever-increasing rate across all sectors. It’s not possible to innovate unless you are aware of the forces and can imagine an alternate future. This foundational thinking is what drives what you’re willing to place bets on. Before creating a strategy and plan, it is critical to put a thesis in place which describes what you believe to be true. As John McDonald explains: “We act based on what we believe to be true. Place bets on what you believe and how you think it will work out.”
Source: STL Partners, John McDonald
John says that most disruption comes not from initiatives at the centre but experiments on the periphery. This might only appear as less than 5% of the picture to those running existing businesses. The challenge is to learn from and share the underlying assumptions and insights behind these innovations.
John suggests the discovery journey that triggers open discussion about disruptive forces and business models, starts with a trigger that asks, “Do I need to care about this?” Initial exploration might imply there is no need to care. However, exposure to disruptive forces can provide the conviction to go deeper.
Uncovering the forces for disruptive innovation
John has developed a methodology he calls FORCECASTING™ to help leaders crystallise their theses. In this method, leaders get together to identify the forces that are unfolding, such as AI, to deconstruct the forces, identifying which matter the most, how fast they are moving, and how they are unfolding. It creates alignment around where risks and opportunities are emerging and where to place the bets.
One methodology sets aside a whole day and uses the following process:
Source: STL Partners, John McDonald
This then forms the collective thesis and the basis to move into strategy and planning.
Blurring the line
A key learning for John, having worked with over 60 companies in the health sector, is that innovation often comes from the crossing over of two disciplines e.g. inside healthcare and outside healthcare. This enables the creation of big enough datasets to apply machine learning and to connect the dots across the two domains. This will enable the outside learning in to be brought in, to blur the line across the sectors.
John cites the classic example of the Apple Watch. It has a medical grade electrocardiogram, although Apple is not a health company. Apple built a massive dataset and deep insight through machine learning, outside healthcare. They also had data inside the healthcare domain, and they joined the two and blurred the line to break through. This was at times counter intuitive to healthcare professionals, who are accustomed to operating within very clearly defined silos of expertise and compliance.
It is now commonly accepted that wearables are key to enabling more preventative healthcare services. There will be further scope to bring inside and outside domains together, creating opportunities for telcos e.g. in sustainability. A potential and very powerful application could be the combination of AI and consumer environmental apps will enable users to make small daily changes that reduce their carbon footprint.
STL’s July 2021 report: Finding growth: How to identify and meet new customer needs outlines innovation best practice in identifying and scaling new business opportunities, in terms of how to organise, the necessary culture, where to start, who to involve, and how to exit. The report identifies best practice for telcos based on discussions of the critical success factors with leading telcos Elisa and Telia and with a strategist in disruptive innovation.
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