Early on in my career, I remember a consultant sitting in on a project workshop telling me that innovation is not something you can call yourself; only someone else can give you that title. 

After leaving two companies, I co-founded last year I was recently looking for what to work on next. I set up job ad searches for innovation and found 200-300 ads came up each week. Then I looked for Innovation job titles on LinkedIn, sure enough, they were everywhere. I spoke to a few companies about their Head of Innovation or Head of Transformation roles; depending on where they were on their journey, the answer was different. Yet I'll be honest; no-one considered me a suitable candidate to join their organisation.

Then, ironically, when I was judging some industry innovation awards, it struck me that people don't know how to identify innovation. The word "innovation" comes from the Latin word "novus" meaning new. If innovation is now commonplace, then how can it be new? From my review, much of what is being called innovation falls into buckets of work like; product development, process improvement, continual improvement, systems improvement or technology modernisation.

Over the past ten years, innovation has become an industry in itself, yet the latest figures show that labour productivity in New Zealand continues to lag behind that in Australia. From 1996 to 2018, the annual average growth in labour productivity was 1.4 per cent a year in New Zealand but 2.1 per cent in Australia. We aren't competitive on the world stage. To compete at a global level, we need to shift the way we think about what I'd define as disruptive innovation. Here are some of the characteristics I believe are necessary, and I'm interested to hear if you agree or have anything to add.

1. You break a system, regulations or even the law but upholds the principles the law intends to protect.

When we launched Global Mode™ in New Zealand, it was the digital equivalent of parallel importing. Yet we faced copyright breach claims from Sky, Spark, TVNZ because they alleged we breached their content distribution rights. Customers using Global Mode™ paid-for content and piracy on the broadband networks who used Global Mode™ went down as a % of total traffic. There is no argument there was a grey area of law, it was undefined, the critical point is this. When I think about launching something new, I look for the gaps in legislation that allow us to operate, but take advantage of the incumbents' position - we don't play by the same rules. These rules stop your company from being disruptive. When you look at why the legislation exists, there is always another way to interpret the intent. I can give you an example of this thinking in Healthcare, Housing and Insurance. With Doctor2Go, we were issuing scripts using telehealth between four geographic locations, nurses, GP's the patient, and the Pharmacy were all in different physical areas in New Zealand. We acted like Uber by facilitating access using technology by lowering the barrier to help patients get medical help fast - the patient was at the centre of the experience. Stop letting regulations frame your decisions, look at the principles.

2. There are no case studies.

I was sitting in on the focus group for MIUWI a few years ago where the idea of buying a house with a stranger was the topic, everyone in the focus group said - no way, I would never do it. In a traditional market research focus group, you'd trash the idea, for me, that was the evidence we needed we were on the right track — Airbnb and Uber's underlying principles based on sharing economy principles, more effective use of assets. MIWUI went off track for a year before they came back to the original concept, which is now gaining notoriety and attention from the Kiwibank Fintech Accelerator programme. There are no case studies for innovation, and people will think your idea will not work. Not everyone will disagree, you'll find some thought leaders and early adopters, but by and large, your concept will seem preposterous to everyone, until it doesn't. If you want to lead the market, you're creating the first case study.

3. Traditional competitors partner to change the status quo.

Coopetition is the act of cooperation between companies competing in a similar market, but that have unique advantages. Doctor2Go was New Zealand's first digital primary care practice, but more well known is Dr Lance O'Sullivan for his work remotely diagnosing children. Don't make the mistake that healthcare is not a business; it's one of New Zealand's largest industries so it is competitive. I ran into Lance a few years after we started Doctor2Go - Lance said he'd been watching our progress, I asked him why he didn't reach out to say hello earlier, to which he replied I thought you were a competitor. Technically we are Lance, I responded, but the more I see you raise the profile of digital health, the easier it becomes for me. Changing the status quo is much harder than you think. In a market which is not mature, your competition is the 'status quo' or the current way of thinking. You're better off to pool resources to evidence the shift, so the segment you operates grows larger. Don't confuse this with convergence, phone companies will become power companies, and media companies will become Internet companies. We're talking about early-stage disruptive innovation; when you create a new way of working there is so much incumbency it's good to have an ally even if it's your competitor, it means you're on track. If you're forward-thinking, you'll accelerate the ways you work with your competitor in certain parts of your business.

4. Your idea is a catalyst for transformational change.

Disruption innovation is a catalyst for transformational change; this means it cannot occur at a business unit or company level. It operates at an industry or society level and often has a much larger purpose. I always didn't think like this; When we launched Global Mode to give people access to Netflix, it was just a cool idea, we had a prototype, and we found a customer. But the result of Global Mode well, the last time I looked seriously I found nineteen paid streaming options in New Zealand. Chorus fibre uptake was 285% the year we launched, piracy data on our customer networks stayed static, but paid streaming data exploded to 10x the piracy data volume, Spark's lightbox service struggled to make money. Sky lost $800M off of its market cap while we were operating. The market dynamics changed, people that had free broadband from the company, switched to a paid broadband service from Slingshot, spending $80-90month for an add-on worth $7-8/month decreasing Slingshot's acquisition rates and reducing churn. Doctor2Go was started nearly six years ago; most people in the healthcare sector have heard about it; now, pockets of medical practitioners are adopting telehealth. If you're focused on a new product or service you are you're missing the big picture and are unlikely to create a new market, look at how you can make a bigger impact.

5. You make the current way of working completely obsolete.

Because start-ups are resource-constrained, they approach the problem from a completely different angle and your operating model changes. One of the first project I did this with HealthTV. We hacked a system together using hacked DSL a Telecom interconnect and some DSL boxes to undercut Telecom OneOffice. I came across this later on in my career with SMX, the first company in the world to operate a mail security platform with no quarantine. It was costly to build this software functionality and forced the founders to integrate two security vendors to make the clean rate so high they didn't need it. At Bypass, we couldn't afford the hardware, so we released the first XaaS model for DNS in the NZ, and maybe the world, and our price to provide the same outcome as our competitors were 4x less. At Doctor2Go, we didn't have some onsite medical tests so we couldn't apply for a PHO funding, so we never looked at having a building. Because we didn't have these overheads we didn't have these costs; ultimately we accelerated the model to offer online primary care access for a fixed fee per month. Because the starting point for disruptive innovation some of the fundamental costs of traditional ways of doing business are never incurred. Once the idea becomes profitable, it doesn't bear these same costs. The result is a new category is created which operates on different terms. This new way of working makes your business unit redundant and your competitors business unit redundant. Overall the cost to service the market decreases as technology enables a new way of utilising resources like buildings and transport more effectively while organisational boundaries are blurred to deliver new outcomes. Ultimately the person who creates the new space owns mindshare.

The conclusion I’ve reached so far

My primary concern is that in the next few years we're going to experience an economic downtown. When you consider the pace of change and how often we see a US tech giant company is overbuilding a New Zealand industry using digital tools to need to ask, are we really in a position to compete globally? eBay never entered NZ, we had Trademe, by AirBnB did, it just took 2-3 years. Uber was much faster, adoption took 12-18 months, but Lime was here and launched in less than three months. We have NZ equivalents for every company, much better placed to service our local needs and work with us based values. Are these are important, our country is the most trusted place in the world to do business, we may not have it right, but at least we understand the issues we have with race relations. We have women the right to vote and are actively seeking to correct gender imbalance, and we've given personhood status to the environment to protect our natural environment. I'm not worried about our ability to compete in a global market; I'm concerned most people don't know they're already operating in one. Start by being more curious, creating an environment that celebrates failure (and the learning that comes from it) and brings diversity into your business.

The way we define risk has changed if you're not investing in disruptive innovation, you are not thinking far enough ahead. Reach out to me if you're interested in finding out more about Cohesive Interference and Disruption Assurance if you can't figure out where to spend your time and resources to ensure the future viability of your company.

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