True innovation is not about adopting technology for its own sake. It is about leveraging it to create meaningful change and instead of starting with technology, start with establishing exactly where you want to innovate in your business explains James Bergin at Xero.

For many business leaders, the allure of new technology is undeniable. Being a modern business with all sorts of tools at your fingertips, including the latest and greatest in AI advancements, is certainly appealing! But just chasing the trends in the technology space will not guarantee business success.

In fact, while jumping on the latest technology is a hobby for some, a fixation on the new and novel can be counterproductive and lead to being stuck in a cycle of short-lived fads. If you think about what was considered cutting edge technology in1990, it’s not really comparable to what we consider to be the same in 2024.

True innovation is not about adopting technology for its own sake; it is about leveraging it strategically to create meaningful change. In other words, instead of starting with technology, start with establishing exactly where you want to innovate in your business and figuring out your innovation ambition, and then move on to exploring how technology can help you to achieve that goal.

What exactly is innovation?

We often throw the word around without really thinking about it, and that can lead us to mistake it for being something intangible and unachievable. But the definition of the word is quite clear: it is the creation of something new that changes something established and transforms the status quo.

According to research conducted by a team led by Larry Keeley, who authored the book on innovation, innovations can be classified into ten different types. Doblin’s 10 Types of Innovation was written after examining over a century of innovations that have changed the world, and it includes innovation types like Profit Model, Channel, Product Performance and Product System. Their research also showed that combining types of innovation in different ways leads to a more impactful and successful result.

What is interesting, given our modern fascination with technology, is that none of the ten types are technologies. Rather than being the eleventh type of innovation, technology acts like a catalyst in an innovation process: if applied correctly, technology can accelerate the reactions between multiple types or elements of innovation.

The key here is to view technology through a capability lens: what capabilities does the technology bring to the fore? What problems can it help us solve? How does it enable us to overcome existing limitations? Do those capabilities allow us to unlock or reach or tackle problems that we have not been able to tackle before?

Using generative AI and large language models as an example, the developments in this space have unlocked natural language comprehension and understanding. Conversational interfaces have moved from their starting point of being something out of science fiction, to being usable but clunky, to the state we are seeing emerge where they promise to be actually viable and even useful!

Since the popularity of the likes of ChatGPT, Google Gemini and other conversational AI platforms has exploded, we are seeing more and more of these tools being used in various products and websites. But it is important to consider what customer problems you are trying to solve by implementing one of these.

Adopting a tool to keep up with your competitors or simply because you see everyone else doing it will not necessarily add value to your users; the real value lies in solving a problem for them in a way that makes a positive difference.

So, if a small business is interacting with their customers in their email application, or conducting business in WhatsApp, or sending a text message for example, they can use any of those outside applications to complete tasks such as generating an invoice or editing a quote. In this instance, the technology is a true catalyst for us in combining Process, Channel and Customer Engagement innovation.

If we look to the future, what capabilities could be unlocked by advances in other emerging technologies, like robotics or quantum computing? What problems are we staring into that affect businesses day-to-day around forecasting, simulation, and prediction, for example, that capabilities unlocked by more widely available quantum computing could in theory help solve?

That question, and answer is still on the horizon, and until quantum computing, in this example, provides ready access to some capability that is of practical use to businesses to solve a problem that their customers care about and will exchange value for, it is not yet relevant. It might be shiny. It might be sparkly. It might be interesting. But it is not a catalyst for innovation in your business today.

If you are truly purpose-led, your purpose should also drive your innovation and help you figure out what problems to tackle next. True innovation is not about the technology by itself, but rather how it can be leveraged strategically to create meaningful change. Businesses should focus on identifying their innovation ambition and exploring how technology can help them achieve that goal, rather than simply chasing the latest trends.

By keeping their purpose at the forefront, understanding the problems they aim to solve for their customers and the types of innovation they can leverage, businesses are then better positioned to effectively harness technology as a catalyst for their own innovation.

Technology is not innovation. So what is innovation?

Just chasing trends in the technology space will not guarantee business success.

While jumping on the latest technology is a hobby for some, fixation on the new and novel can be counterproductive and lead to a cycle of short-lived fads.

True innovation is not about adopting technology for its own sake; it is about leveraging it strategically to create meaningful change.

What is interesting, given our modern fascination with technology, is that none of the ten types of innovation are technologies.

The key here is to view technology through a capability lens: what capabilities does the technology bring to the fore?

Adopting a tool to keep up with your competitors or simply because you see everyone else doing it, will not necessarily add value to your users.

The real value lies in solving a problem for them in a way that makes a positive difference.

It might be shiny, it might be sparkly, it might be interesting. But it is not a catalyst for innovation in your business today.

If you are purpose-led, your purpose should also drive your innovation and help you figure out what problems to tackle next.

True innovation is not about the technology by itself, but rather how it can be leveraged to create meaningful change.

Businesses should focus on identifying their innovation ambition and exploring how technology can help them achieve that goal.