In recent years, the technology sector has shown a particular inclination towards disruptive innovations. This generally refers to the introduction of new technologies that displace established competencies, change the market, and create a new value network within the technology ecosystem^[1]. However, W. Chan Kim, in his enlightening article "What Innovators Who Create New Markets Do Differently", introduces a distinctive mindset – 'nondisruptive creation'.

The Mindset of Nondisruptive Creation^[1]

Nondisruptive creation breaks away from the traditional concept of disruption, emphasizing the creation of new markets that do not displace existing businesses or jobs. A prime example of this is the billion-dollar industry created by the Square credit card reader. This introduction of a unique strategy fueled immense growth and innovation without uprooting existent players.

This approach seeks to challenge established ideologies in contemporary business and technology landscapes. It questions the idea that we must analyze and shape the current scenario to envision what could potentially be. Furthermore, it contests the belief that technology innovation is the absolute key to market creation and growth, and finally, defies the perception of the innovator as a lone genius who relies solely on instinct.

AI - A Tool for Innovation and Streamlining Operations^[2][3]

Surely, the weight of technology innovation cannot be understated, especially in discussions surrounding Artificial Intelligence (AI). Forbes Councils Member, Christopher Nguyen, proposes the SOLID framework for executives to navigate more effectively in the world of AI. This framework distinguishes five critical perspectives:

1. Size: Small AI models offer agility and precision, preferable for security-focused industries. In contrast, Large Language Models possess broader data-processing capabilities, suitable for tasks requiring expansive subject comprehension.
2. Ownership: The choice here is between quick solutions with vendor dependencies (akin to renting an apartment) and developing an open-source AI system allowing for absolute control and customization (analogous to owning a house).
3. Level: System-1 AI is ideal for quick question-and-answer scenarios, while System-2 AI suits long-range planning and reasoning.
4. Industry: In digital sectors, AI performs efficiently with large, homogeneous data sets. Nonetheless, physical industries like manufacturing may require a human-AI collaboration due to the heterogeneity and scarcity of data.
5. Domain Knowledge: Executives could choose between Generalist AI models (broad and adaptable) and Specialist AI models (precise with depth) based on specific organizational needs.

Discussions around AI are incomplete without the perspective of one of the global software giants, SAP. SAP's Chief Technology Officer Juergen Mueller paints a success story of how AI accelerates efficiency by turning a two-hour job into a 15-minute task. SAP has integrated AI across its applications, impacting significant sectors like HR, customer experience, and finance. The company has internally trained over 50,000 developers on AI and established an AI ethics council emphasizing safety, security, responsibility, and legality in AI development.

Key Takeaways

The articles underscore the importance of innovative mindsets, the wise adoption, and application of AI across different facets of an organization. Nondisruptive creation provides an alternative lens to look at market creation and growth. At the same time, adopting AI is no longer a competitive advantage but a business necessity. Combining this with the learnings and experiences shared by SAP, it is evident that proper execution and good data quality are crucial in deriving optimal value from AI.

Sources

W. Chan Kim. (2023, December 12). What Innovators Who Create New Markets Do Differently. https://hbr.org/2023/12/what-innovators-who-create-new-markets-do-differently

Christopher Nguyen. (2023, December 12). Five Considerations When Adopting AI: An Executive's SOLID Compass. https://www.forbes.com/sites/forbestechcouncil/2023/12/12/five-considerations-when-adopting-ai-an-executives-solid-compass/

Carl Franzen (2023, December 09). How AI can cut two hours of work into 15 minutes with SAP CTO Juergen Mueller. https://venturebeat.com/ai/how-ai-can-cut-two-hours-of-work-into-15-minutes-with-sap-cto-juergen-mueller/