According to an exciting new research report released by Accenture, C-suite execs are indeed making significant investments in new technologies — but frustratingly, in many cases, they’re not reaping the benefits.

How is it that technology seems to be everywhere, but value is not?

This gap is what we call the Innovation Achievement Gap. And it’s a large gap.

We surveyed over 8,000 companies and looked specifically at three dimensions:

1. The adoption of key technologies.

2. The penetration of the technologies adopted.

3. The organisation and culture.

We grouped the top 10% into what we call Leaders, and the bottom quarter into Laggards.

The Laggards forfeited 15% of their potential revenue in 2018 as a result of their inability to capture fully the benefits of new technology. That’s one dollar in seven. And it gets worse. The Laggards are on track to forfeit 46% — nearly half their potential revenue — by 2023. That’s the size of the Innovation Achievement Gap.

We found three main attributes that the Leaders have but the Laggards don’t. By addressing these three factors, Laggards can close their Innovation Gaps.

1. Systems thinking

Instead of thinking in terms of individual technologies, the Leaders think about how the technologies work together as a system.

Think about how many people are now wearing step counters. A fitness tracker or step-counter is a technology. But its value is multiplied when it is part of a broader system.

Strava is a smartphone app that turns a smartphone into a fitness tracker of sorts. Instead of only counting steps, Strava uses the GPS system to track where you went, and how fast you did the route. It has a social network function so you can share your jogging, walking or cycling with others. It also allows users to designate route segments, so that you can benchmark yourself against other people who ran up the same hill as you did, even though you’re not doing it at the same time.

Instead of leveraging just the step-counting technology, Strava has looked at how different technologies work together as a system, thereby multiplying the value of the original technology.

This Systems Thinking enables what we call Future Systems — boundaryless, adaptable systems that can scale innovations repeatedly. That’s what makes organisations agile.

2. Methods

Leaders adopt earlier. The received wisdom always used to be that it was better to be a fast follower than a trailblazer. Fast followers could learn from the mis-steps of the first adopters and avoid their expensive mistakes. But that logic no longer seems to hold true. We found that the top 10% of companies adopt new technologies earlier and re-invest more frequently.

And tied into the first point about mindset, they acquire technology more deliberately. They know they want to install AI. But instead of doing that first, they start by investing in streaming platforms. These event hubs can process millions of transactions in real time and provide AI with lots of data to work with. Leaders think of the whole system rather than just a part of it.

They also spend more of their IT budgets on innovation and are expected to accelerate investment in innovation faster than Laggards over the next five years.

3. Organisation and culture

Leaders carefully consider how new technologies will interact with the people and processes already in place, and they nurture talent in creative ways.

Any company can emulate the mindset and methods of the top 10% to get the value they expect from their significant investments in technology.

Value is difficult to capture, in part because of the enormous challenge of innovating with legacy systems. The conventional IT “stack” — spanning software applications, data, hardware, telecommunications, facilities and data centres — wasn’t built for today’s cloud-oriented world of analytics, sensors, mobile computing, artificial intelligence, the Internet of Things (IoT), and billions and billions of devices. Nor was it designed to adapt to the world of tomorrow, whatever that might be.

Even some “digital native” companies born in the cloud haven’t adapted their systems fast enough.

The lesson is that in every kind of company, growth depends on a systematic and sequential adoption strategy in line with Future Systems — enterprise systems capable of scaling innovations repeatedly and giving organisations the strategic agility they need to stay ahead of their competitors.

For more insights please contact me directly. I would love to hear your thoughts on these ideas. Or download the full report by clicking here.