Innovation ≠ Technology: What if the Firm Itself Is the Innovation?

The future belongs to organizations that realize their business model is their most powerful tech stack

We’ve been sold a singular image of innovation: something sleek, digital, and code-based. When you ask business leaders about their innovation strategy, the first thing they do is rattle off software solutions they are evaluating or implementing. While these technologies are great, they are widely available to competitors and often create a checkbox approach to innovation. We’ve implemented XYZ, check the box – we are innovative!Unfortunately, technology is no longer a differentiator…it’s table stakes. With how fast the world is evolving, innovation is not a destination (if it ever was); rather, it’s a continuous and often uncomfortable journey.

Recently, while presenting to a Board of Directors, I posed the very simple question: What if the innovation is the firm itself? Eyebrows raised, and they asked for an example. I like to use the non-digital legend, Southwest Airlines.

Long hailed as one of the most innovative companies in aviation, Southwest’s defining breakthroughs weren’t technologically based; they were operational and cultural. No seat assignments, it’s cattle-call boarding where they herd humans into A-B-C / 1-2-3 lines that may feel kindergarten-level in sophistication, but it was disruptive by design. They didn’t invent new tech; they reframed air travel around speed, simplicity, and customer turnover.

For decades, that simplicity was their edge. They outmaneuvered larger competitors with fewer moving parts, “the Southwest effect” caused average fares to drop 50% forcing competitors to price match or exit routes entirely. They made choices that others wouldn’t, and that, in itself, was innovative. Today, as the airline evolves away from some of these strategies, the lesson remains: what made them remarkable was not technology, but a different way of thinking about the customer and service delivery.

Lately, it has felt as if today’s corporate innovation landscape often resembles performance art more than actual transformation. Companies pour billions into AI labs, blockchain experiments, and metaverse real estate while their fundamental operating models remain stubbornly analog. They’re essentially trying to build rockets while their organizational DNA is still programmed for horse-drawn carriages.

And here’s what nobody wants to admit: your business model isn’t just how you make money, but rather it’s a tech stack for human coordination. And like any technology, it can be hacked, upgraded, or completely rewritten.

Imagine if instead of organizing around what you do, you organized around what your clients actually need. Instead of siloed marketing, operations, and strategy teams that awkwardly coordinate through conference calls and Slack channels, you’d have integrated pods built around specific client outcomes. This isn’t just about “cross-functional teams” - that’s still thinking inside the box. This is about outcome-centric organisms that can rapidly evolve, merge, and reconfigure based on emerging challenges. One of my mentors and a dear friend, Doug Sleeter, ex-Apple, said over a decade ago that “Agility Trumps Ability,” and it rings truer today than ever before.

In fact, aggressive simplification, like Southwest’s boarding process, is sometimes the most radical but effective strategic lever. This “Kindergarten Principle” applies far beyond airline boarding. The most innovative organizations often look suspiciously simple from the outside because they’ve eliminated layers of accumulated complexity that everyone else accepts as necessary. It makes them more nimble and agile.

Consider how Stripe revolutionized payments not by inventing new financial technology, but by simplifying the developer experience. Seven lines of code versus weeks of integration work. The innovation was organizational: how they structured their API, their documentation, and their entire customer journey.

True innovation demands institutional plasticity, the ability to reshape the dated organizational DNA in response to changing realities. This means building companies that can literally reconstruct themselves: changing not just what they do, but how they think, how they organize, and how they create value.

The future belongs to organizations that treat their own structure as a continuously evolving prototype. Instead of static org charts, imagine dynamic constellation maps that show how teams form, collaborate, and dissolve around specific challenges.

In a world that’s accelerating toward techno-human convergence, innovation is less about the tools we wield and more about the structures that we build. That may mean putting less energy into reviewing new tech, and more into rethinking how we define the business in the first place.

@Kacee