Technology Innovation Should Prioritize Consumer Value, Not Hype
In the endless race to adopt cutting-edge technologies, businesses often fall into a costly trap: mistaking adoption for innovation. Technologies like AI and AR are going through their own hype cycles, and the media loves reporting on failed experiments and sunk costs as businesses race to be early leaders. Leaders are pressured to announce their strategy for adopting new technologies (or else appear stagnant), while they often question or fail to understand the value they will provide. The real winners of innovation are not the fastest adopters, but those who ask the fundamental question: How does this technology positively impact the people who use it?
The Innovation Fear Trap: Why Most Tech Investments Fail
The pressure to innovate often stems from fear-the fear of falling behind or the fear of missing out on the next transformative technology. This reactive mindset can lead to unwise, costly decisions. Gartner predicts that by 2025, 30% of generative AI projects will be abandoned after proof of concept, often due to unclear business value, insufficient risk controls, or poor data quality. Additionally, a separate recent study found that a quarter of IT leaders already regret their hasty AI investments.
It's possible to get it right, but that means first defining what "right" means for your company. Before making a major technology investment, I urge business leaders to understand the technology and its potential impact on their specific company, customers, employees, and business needs. A structured, human-centered innovation framework can achieve better results-one that balances ambition with practicality and puts customer outcomes first.
Most companies tend to fall into one of four categories when it comes to adopting new technologies:
All-in: Typically, startups race to prove an idea based entirely on a new technology with no Plan B. Failure rates are often high, but are tolerable given the structure of venture capital.
Greater Good: Companies that announce and pursue long-term, big-budget transformations to adopt new technologies.
Toe Dippers: Companies that invest deliberately and strategically in pilots and proof-of-concept projects and only invest further if the results prove meaningful.
Waiters: Companies that keep a close eye on competitors in the market and only take a reactive approach when technology impacts their status quo.
All of these approaches are valid and have varying degrees of risk and potential impact. Success depends on whether your strategy is consistent with your risk tolerance and whether it is executed correctly.
Examples of Right and Wrong
McDonald's: Dipping a Toe in the Hole
In 2024, McDonald's ended its AI drive-thru test after three years of experimenting with IBM. The system's failures quickly went viral, and it had trouble interpreting customer orders (one customer watched in disbelief as the AI system ordered 2,510 Chicken McNuggets for a total of $264.75), leading to the project's cancellation. It's easy to label this a failure (as many in the media did), but I think it's an example of investing in innovation. McDonald's tested AI at a manageable scale, at a cost they could afford, and when the results didn't meet their standards, they abandoned it. They viewed the experiment as a learning opportunity rather than a definitive solution, and will likely carry those learnings into other AI initiatives in the future.
The Bigger Advantage: A New Platform Approach
Many companies announce grand plans to revolutionize industries with new technologies, only to fail to deliver tangible results. Take the "Metaverse," which reached the peak of its hype in late 2021. Companies like Decentraland have raised huge sums from cryptocurrency ICOs and venture capital, with brands spending millions to buy virtual real estate. Recent reports suggest the platform has only 8,000 daily users, and much of this virtual "land" remains unused. The core concept is driven by hype rather than providing real value to users.
Meta's rebranding and long-term investment in the Metaverse and AR, in turn, has raised questions, but its huge investment may eventually pay off. As the company is able to develop the hardware and platform needed to create new value for consumers, and can do so over a longer period of time, they may still find a market fit for the Metaverse and win at the platform level.
Bottom-up vs. top-down adoption
For smaller companies, investment often takes a different form: either adopting a new tool or integrating new technology into existing business processes. Top-down mandates to adopt new technologies often meet resistance or fail to produce results because they are not aligned with everyday needs. We often find that a bottom-up approach, where teams test tools in limited trials and advocate for wider adoption based on proven value, is more effective. If employees refuse to go back to old ways after trying it, that's a strong sign that the technology is adding real value.
Human-centered design: The heart of smart innovation
Ultimately, successful innovation starts and ends with people. Smart companies focus on understanding and solving real human problems before making any technology decisions. Once they've completed this initial step, companies can then think about how to leverage technology to scale those solutions. This human-centered approach requires business leaders to:
Start with real problems: Start with a deep understanding of what your people (customers, employees, partners) really need. What frustrates them? What slows them down? What opportunities do they see? Success means solving these specific problems, not chasing technological novelty.
Blend internal and external perspectives: Leverage the deep business knowledge of your internal teams and subject matter experts who bring new perspectives and technical expertise.
Build for the long haul: Innovation isn't a sprint-start with smart experiments, but plan to invest the time, budget, and talent to not only launch initiatives but also build meaningful, scalable results.
Focus on human values: Remember that the best innovations are often not the most technologically advanced, but the ones that make people's lives demonstrably better. Sometimes, incremental improvements, like longer battery life or enhanced usability, deliver the greatest value. Let human needs, not technological capabilities, guide your decisions.
When companies prioritize solving real problems rather than pursuing technology, they make smarter decisions and build lasting competitive advantage. Achieving this clarity sometimes requires an outside perspective-a partner focused on understanding human needs and aligning solutions with the business's unique goals and values. Smart innovation rarely happens in isolation; it thrives by partnering with people who challenge assumptions, bring new ideas, and help bridge the gap between aspiration and execution.
By putting human needs first, making strategic decisions around how to invest, and executing those decisions correctly, companies of any size can transform innovation from a risky gamble to a reliable engine for meaningful growth.