August 22, 2024


Elisabeth Carpenter and Josh Burek

In today's era of rapid innovation, businesses must transform themselves to harness the power of new technologies. However, a McKinsey & Company study reveals that over 70% of such efforts fail to deliver lasting results. To unlock true value, companies must move beyond merely upgrading existing products and processes.



The key lies in challenging long-held assumptions and exploring new use cases. This mindset shift is crucial for maximizing returns on investment in technology. The advent of generative AI, for instance, has seen companies invest heavily without significant returns. To succeed, business leaders must adopt a blank-page approach, like architects designing from scratch.

The evolution of digital cameras and social media platforms illustrates this transformation. Initially, new technologies are used to enhance existing behaviors, but later, they enable disruptive, lasting outcomes. This leap from "skeuomorphic" thinking to native thinking takes time.

To achieve this shift, businesses must identify and address friction points in existing models. Amazon's innovative approach at Whole Foods exemplifies this, moving from streamlining checkout to eliminating it altogether.

True innovation lies in questioning fundamental assumptions, not just improving existing processes. By focusing on users and functions over materials and attributes, businesses can tap into the unique power of new technologies. For instance, AI's strength lies in pattern recognition, not truth-telling.

By adopting a native mindset and challenging longstanding assumptions, companies can unlock the full potential of new technologies and create lasting economic and social value.