Tech Innovation Should Prioritize Consumer Value, Not Hype
In the relentless race to embrace cutting-edge technologies, companies often fall into an expensive trap: mistaking adoption for innovation. Technology like AI and augmented reality are going through their respective hype cycles, and the media loves to highlight the failed experiments and sunk costs as companies race to become early leaders. Leaders are pressured to declare their strategy for new technology adoption (or appear stagnant), often while questioning or not understanding the value of what the new technology will offer. The real winners in innovation are not the fastest adopters but the ones who ask the essential question: How does this technology positively impact the people who will be using it?
The Innovation Fear Trap: Why Most Tech Investments Fail
The pressure to innovate often stems from fear— fear of being left behind or fear of missing out on the next transformative technology. This reactive mindset can lead to poorly informed, costly decisions. Gartner predicts that 30% of generative AI projects will be abandoned after proof of concept by 2025, often due to unclear business value, inadequate risk controls, or poor data quality. Moreover, a separate recent survey 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 significant technology investments, I urge business leaders to understand both the technology and its potential impact on their specific company, customers, employees, and business needs. A structured, human-centered framework for innovation makes it possible to arrive at better results—one that balances ambition with practicality and puts customer outcomes at the forefront.
Most companies tend to fall into one of four categories when adopting new technology:
- The all-iners: Typically, startups that race to prove an idea based solely around a new technology, with no plan B. The failure rate is often high but is tolerated based on how venture capital is structured.
- The big betters: Companies who announce and pursue long-term, large-budget transformations to adopt new technologies.
- The toe dippers: Companies who make measured and strategic investments into pilot programs and proof of concept projects and only invest further if the results prove meaningful.
- The wait and seers: Companies who watch competitors in the market and take a reactive approach only if the technology impacts their status quo.
All of these approaches are valid and come with varying levels of risk and potential impact. Success comes from aligning your strategy with your risk tolerance and executing that strategy properly.
Examples of Getting It Right vs. Getting It Wrong
McDonald’s: A Toe-Dipper Done Right
In 2024, McDonald’s ended its AI drive-thru testing after three years of experimentation with IBM. The system’s mishaps went viral, struggling to interpret customer orders (one customer watched in disbelief as the AI system ordered 2,510 McNuggets Meals, totaling $264.75), leading to the project’s cancellation. It’s easy to label this a failure (as many in the media did), but I’ll argue that this is an example of an appropriate investment in innovation. McDonald’s tested AI at a manageable scale, at a cost within their means to shoulder, and walked away when the results didn’t meet their standards. They treated the experiment as a learning opportunity, not a definitive solution, and are likely to bring those learnings forward into other AI initiatives in the future.
Big Betters: Approaches to building a new platform
Many companies announce grand plans to revolutionize industries with new technologies, only to fall short of delivering tangible results. Consider the “metaverse,” which reached the peak of its hype in late 2021. Companies like Decentraland raised huge amounts of capital from crypto ICOs and venture capital, and brands spent millions purchasing virtual real estate. Recent reports cite that the platform has as few as 8000 daily users, and most of this virtual “land” remains largely inactive. The core concept was driven by hype and not real value delivered to users.
Conversely, Meta’s rebrand and long-term investment in the Metaverse and AR have drawn skepticism, but its massive commitment could eventually pay off. Because the company is able to develop both the hardware and the platform needed to create new value for consumers, and do so over an extended period of time, they may yet find a market fit for the Metaverse and win at a platform level.
Bottom-Up vs. Top-Down Adoption
For smaller companies, investments tend to take a different form: either in the adoption of new tools or integration of new technology into existing business processes. Top-down mandates to adopt new technology often face resistance or fail to deliver results due to poor alignment with day-to-day needs. We often find that a bottom-up approach—where teams test tools in limited trials and advocate for broader adoption based on proven value—is far more effective. If employees resist returning to old methods after a trial, it’s a strong indicator that the technology adds real value.
Human-Centered Design: The Core of Smart Innovation
Ultimately, successful innovation starts and ends with people. Before any technology decision, smart companies focus on understanding and solving real human problems. Once that initial step is complete, companies can then consider how technology can scale those solutions. This human-centered approach requires business leaders to:
- Start with Real Problems: Begin by deeply understanding what your people—customers, employees, partners—actually need. What frustrates them? What slows them down? What opportunities are they seeing? Success means solving these concrete problems, not chasing technical novelty.
- Blend Inside & Outside Perspectives: Leverage internal teams’ deep business knowledge alongside subject matter experts who bring fresh perspectives and technical expertise.
- Build for the Long Run: Innovation isn’t a sprint—start with smart experiments, but plan to invest in the time, budget, and talent to not just launch initiatives, but to build meaningful, scalable outcomes.
- Focus on Human Value: Remember, the best innovations are not often the most technically advanced—they’re the ones that make people’s lives noticeably better. Sometimes, incremental improvements—like better battery life or enhanced usability—deliver the most value. Let human needs, not technical capabilities, guide your decisions.
When companies prioritize solving real-world problems over chasing technology, they make smarter decisions and build lasting competitive advantages. Achieving this clarity sometimes requires an outside perspective—partners who focus on understanding human needs and aligning solutions with your business’s unique goals and values. Smart innovation rarely happens in isolation; it thrives through collaboration with those who challenge assumptions, bring fresh ideas, and help bridge the gap between ambition and execution.
By putting human needs first, making strategic decisions around how to invest, and properly executing upon these decisions, companies of any size can transform innovation from a risky gamble into a reliable engine for meaningful growth.
