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July 03, 2018
Combinatorial alchemy: Discovering the recipe for technology-driven innovation
By: Michael Cremin

Steve Jobs once said, “Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn't really do it, they just saw something. It seemed obvious to them after a while. That's because they were able to connect experiences they've had and synthesize new things. And the reason they were able to do that was that they've had more experiences or they have thought more about their experiences than other people.”1

Innovation and disruption are impacting all industries, reshaping market share and changing the ways companies design their services and go-to-market strategies. The most successful innovators and disruptors have found a way to incorporate technology in creative and exciting ways to invent new experiences and offerings that in turn generate value with customers. Although our research shows that 90 percent of executives agree their growth strategy is technology-driven2, only a fraction of companies will deliver the desired product and services innovation from their technology investments. This gap creates enormous exposure to competitive disruption and, in turn, increases the risk of lost revenue and market share. Accenture Strategy believes that successful companies will take a combinatorial approach to disruption—linking creativity and technology to cut across silos, invite different experiences and place the customer experience squarely at the heart of innovation.

In most cases, business and technology innovation is typically not driven by the invention or implementation of one single technology; rather it’s driven by the pulling together of multiple, individual “ingredients” in creative ways in which the result is both transformative and greater than the sum of the individual parts.

We believe building this “combinatorial alchemy” mindset and capability requires focusing on five core ingredients:

  1. Cross-functional teams—Companies will succeed, or fail, based on their ability to create the right “recipe” of solutions to address the full value chain. This will require deploying cross-functional working teams with the ability to look at different technologies and combinations of technologies from their own lens and experiences and collectively create new product and service offerings as well as stretch traditional industry boundaries. In fact, our research shows that one in two organizations are pushing product and service expansion to drive their projected 2020 growth.3

  2. New technologies—Rapid advancements in physical and biological technologies—coupled with areas such as analytics, blockchain, Internet of Things (IoT) and artificial intelligence—have accelerated a new set of “ingredients” that companies can now take advantage of to drive growth opportunities. More than half (53 percent) of executives say technologies like AI will enable them to exploit new market opportunities.4 The key to success will be creatively thinking about how these emerging technologies can be applied and combined in new ways.

  3. Design-thinking approaches—Organizations must be outcome-focused, employing design thinking approaches to identify how technology will impact and enable all facets of the customer value chain. Our research finds that 80 percent of executives believe that organizations that can tap into what motivates human behavior, and design the customer experience accordingly, will be the next industry leaders.5

  4. Ecosystem-based—Leading organizations will develop solutions using ecosystem-based models where strategic partnerships are established to scale and provide complementary services to drive competitive advantages. These partnerships create benefits for each member that could not be achieved alone, or at a desired speed / level of investment.

  5. Future-oriented—Companies that apply standard, short-term financial measures to innovation, or only partially invest in innovation capabilities, are the most vulnerable to disruption. Strategies must be evolving, vigilant and fluid. Companies that don’t prepare to catch the out-of-the-box idea are most susceptible to miss the opportunity, and potentially be put out of business.

The possibilities of this alchemy are endless. They range from a healthcare company that uses IoT-enabled wearables, in conjunction with artificial intelligence, to monitor customer biometrics in real time and proactively suggest activities (exercise programs, support groups, etc.) and products (via their ecosystem of partners) to improve wellness, to ecosystem partnerships between retailers and consumer goods companies that use artificial intelligence, IoT and mobile technologies to understand shopper behavior in the aisle and push targeted offers at the time of purchase. The key is employing this alchemy mindset to unlock technology-enabled product and service offerings that create new, competitively differentiated experiences in a repeatable, scalable and profitable manner.

Fresh ideas

Companies that successfully execute a combinatorial strategy can not only gain market share in their existing industry, but can also potentially transcend traditional industry models. Execution of this strategy will require companies to have a “disruptive” minded culture and the right operating models, capabilities and partnerships to not only innovate, but scale and sustain that innovation. Companies that don’t invest, or under invest, in these capabilities are destined for failure and loss of market share.


1 “Steve Jobs: The Next Insanely Great Thing” by Gary Wolf,
Accenture Strategy, Revenue Growth: Perception or Reality, 2017
Accenture Strategy 2017 tech-led change for AI research.
Accenture Technology Vision 2017 Survey

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