In a memorable scene from an old John Ford movie, a powerful West Point football team of the early 1900s is administering a terrific drubbing to tiny Notre Dame. In a bruising game, without helmets, the muscular cadets look like they’re just too much. All of a sudden, a Notre Dame player drops back and throws a long pass for a touchdown. A pass had never been attempted before, so actor Tyrone Power, playing the Army coach, storms off the bench and yells: "Did you see that? It’s baseball!" You can guess who wins.

That pass is the apotheosis of a killer app. It was completely new, changed how the game was played, and gave Notre Dame an advantage that it built into a football dynasty.

Yet many executives are figuratively using the old Army football strategy. They merely try to find bigger, faster, stronger players. Maybe they run off tackle instead of right up the middle.

These executives are missing out on a wave of innovation in e-commerce unlike anything the world of business has seen in a very long time. The reason is simple. It’s not that people aren’t trying. It’s that they don’t fully understand the difference between killer apps and what might be called "faster, better, cheaper" efforts. This is the most important distinction in business today.

So, how do you tell the difference?

Faster, better, cheaper is about incremental optimization. FBC is about reducing transaction costs and cycle times. FBC may take advantage of technology changes, such as the Internet, but a company still delivers the same products or services to the same customers.

By contrast, killer apps are about growth. Often, the growth comes not just from more customers, but new ones, ones that a company had never expected to see—perhaps a regional bank finds that it can reach customers far outside its traditional boundaries. Killer apps may also be about delivering products and services that a company had never thought were part of its business—perhaps a car company installs so many Global Positioning System units that it finds itself in the telecommunications business. Typically, killer apps require new talent, from outside the organization, plus new technology and new partnerships. Killer apps often lead to potentially explosive new revenue models—and usually will abruptly kill off some part of the traditional organization.

The misunderstanding generally comes because executives see themselves using the Internet, doing things that feel like radical change, and assume they must be attempting killer apps. Yet they often aren’t.

Avoiding that mistake is crucial because executives end up making plans based on the assumption that their innovations will generate sustainable competitive advantage, and FBC programs simply won’t do that. Everyone should be constantly running after FBC opportunities, so everybody should always be making gains—meaning that most of the gains get competed away through price decreases and never show up on the bottom line. Every company that wants to have a chance of winning has to have some killer-app initiatives under way. And every company has to be sure it isn’t so focused on FBC that its senior management doesn’t have time and funding for killer apps.

Don’t get me wrong. FBC is important, and e-commerce provides lots of opportunities for finding efficiencies. I’m just saying that FBC alone won’t cut it. FBC is about maintaining competitive parity. Killer apps are all about achieving a big advantage.

Let’s look at some examples to see what truly constitutes a killer app—and what happens when companies kid themselves into thinking they’ve found one:

WingspanBank.com, the on-line bank set up by Bank One, is certainly advertised as a killer app. Wingspan’s Web site greeting reads, "If your bank could start over, this is what it would be." Bank One is investing $150 million annually just in marketing. But Wingspan seems more like a maiming app, or perhaps only a bruising app. Wingspan’s Web site, at best, puts an Internet face on the existing bank and its products. [For more on Wingspan, see "Bland Ambition."] If Wingspan is Bank One’s only attempt at a killer app, then the bank’s management is in for a nasty surprise. The bank will surely be left behind by innovative competitors.

United Parcel Service is innovating by establishing Document Exchange, which uses secure e-mail technology to move documents over the Internet. Passing one killer-app test, Document Exchange cannibalizes UPS’s revenue model—a 20-page document can be sent for $2.50 through Document Exchange, compared with $10 through conventional means. So, is this the real thing? No. UPS is still providing basically the same service to the same customers. A killer app would have, perhaps, set up a spot on-line where customers could conduct secure transactions by sending secure documents, discussing and editing them, and arranging to ship regular, physical packages. Also, UPS’s pricing isn’t nearly aggressive enough. Someone will surely soon provide secure transmission for pennies a document.

Simon Property Group has launched Clixnmortar.com to integrate e-commerce with its shopping malls. Clixnmortar offers services that, among other things, let people use hand-held devices to scan bar codes of possible purchases in a mall and then get easy access to information on those products on-line. That way, people can discuss with their families whether to buy the products. They can buy the products on-line and have them assembled for pickup at the mall or have them delivered. They can share shopping lists with friends, something that Simon is betting teen-agers will want to do.

While I’m biased, because Simon is a Diamond client, I will argue strenuously that this is the real McCoy. Clixnmortar is a radically new service that introduces Simon to a new customer, the ultimate consumer—previously, Simon had viewed its customers as the stores that rent its space. [For more on Simon, see "Malling the Competition."]

Of course, just because you come up with a killer idea doesn’t mean you’ll necessarily have a killer app. And even killer apps don’t last forever. But you’ll never even have a chance at a killer app if you try to do things just faster, better, and cheaper.

Imagine how satisfying it would be to have some competitor look at your company and ask, "Did you see that?"

Bergstein is chairman of Diamond Technology Partners and executive publisher of Context.