Innovate or die! It’s such a popular aphorism, and one increasingly used in the context of business transformation and disruption. Well-established businesses in mature markets suddenly find themselves faced with new, dynamic and fast-moving competitors that were hitherto unknown causing a scramble to survive, even among the fittest and most dominant players.
In many industries, the reality of change can be on a slower timescale, even with high rates of surprise and apparent competitive suddenness. In so many cases, incumbents are underestimating, or just not seeing, the innovation new competitors bring to their market. Sometimes adjacent markets make incumbent markets irrelevant very quickly, if not overnight. What can make things worse is customers voting with their feet before there is time to react to their changing needs.
A program of building innovation thinking, processes, and systems will be more successful than an isolated lab. Innovation must start at the top as part of a wider effort which, being truly transformative, must be led by strategy, not technology
When considering a response to this, the process of Digital Transformation is often put forward without a clear understanding of what it really means to the business. Often, the heroic assumption is that fairly small efforts to better engage with customers, such as introducing self-service, or even chat bots, will get the company on the right path. What is often overlooked, and not addressed properly, is a company’s ability to innovate. In so many cases of market disruption, the post mortem shows the successful companies didn’t just bring one innovative idea to market and then “settle in” to a successful, slow moving corporation. The ones that truly embraced, built, and fostered innovation, making it a core part of their business, succeeded in their first market, worked out how to stay ahead, and then moved on to win in other markets.
How do organisations go about building or even retro-fitting a culture of innovation? While it’s fair to say it isn’t an easy task, what makes it harder (and less effective) is to isolate innovation into a “hub”, or business function, in an effort to isolate risk. By building an “innovation lab”, with new people working on unusual, non-core ideas and technologies, you run the risk of sending a message to the rest of the organisation along the lines of: “If you’re not in the innovation hub, then we don’t need your ideas, thanks.”
A program of building innovation thinking, processes, and systems is likely to be more successful than an isolated lab. Innovation must start at the top as part of a wider digital transformation effort which, being truly transformative, must be led by strategy, not technology. When a culture of embracing innovation starts to make its way through the organisation, and the infrastructure is put in place to foster and speed it up, the organisation embraces everyone’s ability to innovate every day. It results in the whole organisation being driven by a customer-centric, always-improving motive that defines today’s most successful organisations.
When we are talking about survival, as many disrupted companies grapple with today, older adages can come into play, such as: the right way is often not the easy way.
Making tough choices now will limit risk and long-term exposure when it comes to digital disruption. And there are many ways to take advantage of digital to change your business before it winds up in the graveyard of obsolescence.
– Anthony Woodward is founder and Chief Executive Officer of Accelera