What is a 10X technology?

I wrote about the four points a company must have to reach a significant value in a previous post. The list comes from Peter Thiel's book "Zero to One".

Thiel points out that is that the use of Proprietary Technology is critical to a company's success. He suggests that the technology backing the offering must exceed rivals by a factor of ten.

What is a 10X technology?

Genrich Altshuller proposes five levels to classify innovation by its impact, an index of sorts.

Apparent solution

A technology that seems new but doesn't offer any enhancement over current solutions. According to Max McKeown's book "The Innovation Book", 68% of new ideas fit into this category.

Improvement

An improvement is the optimization of a current solution. While it doesn't improve the solution's result, it does advance the path to the outcome. An estimated 27% of ideas fit into the improvement category.

Invention

Inventions offer significantly new offerings but from within the same frame of thinking as the alternatives. These ideas account for 4% of all ideas in use.

New Generation

Technologies that enable disruptive innovation fits within the "new generation" category. These systems define new rules for the entire system of interaction rather than a sub-section. 0.24% of ideas fit into this category.

New System

New systems have the same outputs as old systems but delivery those outputs in an entirely new way. 0.05% of all ideas implemented fit into this category.

Altshuller's pyramid gives a suitable means to classify the technologies driving the business to find a 10X technology. A 10X technologies are "New Generations" or "New System" levels of technologies and, as a result, promote the business offering to levels that convert to significant market share.

Culture VS the Innovator

Culture has often described as the mystical component to a company's competitive advantage. Culture guides people through choices on the path to generating value for a company. Yet, many companies face profound cultural challenges to innovation.

Changing organization culture can be challenging. Edgar H. Schein, in his book "Organizational Culture and Leadership" suggests a path to changing company culture for corporate innovators. The root cause lies in the way a group engrains a belief as a culture.

Groups habitually select their beliefs from a group's leader. Typically when a group is faced with a decision, a leader will offer a recommended solution. Once that solution yields a positive outcome, the group accepts the idea initially as a value but then, later on, and continually reinforced, as an assumption.

It is these set of assumptions that guides groups to recognize situations and select suitable responses. Furthermore, they function as a mechanism to reduce uncertainty and slowly convert into non-discussed rules for the group. Innovation inherently challenges assumptions and in doing so, drive the group into uncertainty. With uncertainty comes group anxiety which the group interprets as a source of pain. The group then naturally and cognitively moves to defend itself against the sources of discomfort and pain. These defence mechanisms (denial or rationalization) are more accessible to invoke than the process of validating new assumptions.

Since culture is a deeply accepted group of assumptions, an innovator must first determine the set of assumptions the organization supports. Once found, an innovator must ascertain the benefit they bring to the group. Lastly, an innovator must know how calm and diminish the rising levels of group anxiety a change might bring. In doing so, pave the way for cultural acceptance of the innovation-driven change.