The Innovation-Disruption Paradox

Disruption is often linked with innovation. Small companies are often thought of being innovative while larger companies are thought of as the object of disruption. This was the topic of my panel last week at App Nation. During the “Meet the Innovators” panel, I had the opportunity to ask Mike Smith, Co-CTO of the Interactive Media Group at The Walt Disney Company, about innovation within a large company.I asked if large enterprises had to experience disruption to be innovative or if innovation could be a process. Mr. Smith provided the following three insights on what companies should do to deliver magic in IT.

1.  IT must embrace external competition

Consumerization of technology has disrupted many roles and industries, not just the IT role. Consumerization has brought Disney’s CIO and CTO roles closer together. The CTO role was frequently considered as consumer-facing and future-driven, while IT was known for operational excellence. In this new world, both roles are focused on understanding how consumers use technology and what impact this will have on the business. Existing business processes frequently isolate a company from its potential and current customers. For example, many large companies that didn’t allow iPhones found it difficult to understand how these devices could change the computing landscape. Startups embrace new technologies and behavioral patterns to build what we call breakthrough innovative ideas. Mr. Smith believes you must embrace external forces to thrive internally.

2. Use acquisition as a source of innovation

Start-ups may be innovative but they frequently lack the distribution channel and processes to bring these innovations to market. Smith noted that acquisitions are a strategy employed by many firms, including Disney to fuel internal innovation. The company recently paid $4 billion to acquire Lucasfilm, which follows Disney’s very successful acquisitions of Pixar and Marvel. While he didn’t offer specifics on this, I believe large enterprises acquire innovation because it’s difficult to create development environments that operate independently from the main company goals.

3. Organizations must embrace internal competition

He mentioned that the next big thing wouldn’t necessarily come from the existing IT solutions a company currently uses. IT must be willing to try competing platforms. Smith said the finance department won’t necessarily embrace the idea of inefficiency, but it’s needed for businesses to achieve breakthrough ideas. For example, Disney has multiple internal animation platforms that are competing for lead platform. Smith claims this will enable the company to select the best solution for innovation.

What’s next in innovation? Smith said all businesses have missed the mark when applying location services today. New location-based services will be the next big opportunity in 2013.

What do you think? Are location services it? Can businesses drive innovation with competing technology platforms? Please share your thoughts here and with me on Twitter @MaribelLopez.
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