Every day we hear brands announce they’re innovating because they’re investing in digital transformation or the cloud.
Both are good things and while some companies have shown genuine innovation efforts, in many cases the term “innovation” is used regardless of whether anything tangible is changing. That is faux-innovation.
One key example of faux-innovation is the concept of “lift and shift” in the cloud. The cloud is certainly an important part of transformation, and core to innovation. But many companies take existing technologies and practices and simply move them to the cloud. They essentially replicate on-premises problems in the cloud instead of untangling, reworking and addressing pain points that stifle innovation.
Innovation is the creation, development and implementation of a new product, process or service. Its goal is to improve an organisation’s efficiency, effectiveness or competitive advantage. Often it’s driven by the need to do more with less.
But you can’t buy competitive advantage, you have to build it, and for many companies that means real technical innovation. As more Australian businesses rely on technology to deliver their products and quickly adapt to changing market conditions, innovation can’t be a box-ticking exercise.
Businesses who have fallen into the trap of faux-innovation are increasingly in danger of getting caught short. As Warren Buffet famously noted, “only when the tide goes out do you discover who’s been swimming naked”.
Innovation: walking the talk
The pandemic has shown what true innovation can deliver. Aussie companies, large or small, that invested in innovation prior to the pandemic were the ones that best reacted, adapted and created new opportunities.
WooliesX is a great example. The organisation came into the pandemic with an established approach and commitment to innovation that meant it was able to thrive and find new ways to deliver customer value, including rolling out a new e-receipt solution.
On the other hand, we’ve seen companies rush to invest in digital capabilities just to survive the day-to-day, without committing to a long-term innovative strategy.
How will those businesses react to the next crisis, be it a new Covid wave or one of the other numerous potential changes coming from our globalised and interconnected economy?
Fail fast and the three Ps
Innovation is hard. There is no easy button to push.
One place to start is to create a strategic framework centred around people, processes and platforms:
- People: Identify within your business the people and teams that will unlock innovation. Where is value created? In many companies it is the development teams, in others it might be a sales or service team. Within those teams, do you have the right talent, with the right mindset and have they got the tools and support they need to do something genuinely different?
- Processes: Be strategic and start on small, focussed projects. Create a two-by-two matrix with a Y-axis of risk to the business and X-axis of potential value to you and your customers. Then think about all the projects your company is working on or could work on – these could include applications, customer functionality, new services etc. Then plot the projects on that matrix and focus on those in the top right. Break those projects into manageable chunks that can be progressed. Be that a quick failure or a quick success, a mix of both is to be expected. Don’t start with massive white elephant projects that overpromise and under deliver.
- Platforms: Equip your people with the right technology to do the best job. Listen to those who are responsible for delivering innovation and building competitive advantage – what do they want? Give them access, make it easy and let them decide. Encourage teams to build Proof of Concepts (PoCs) and use technologies that allow them to focus on their core mission and customer value. For example, often software-as-a-service (Saas) technologies can greatly simplify day to day activities – not lifting and shifting.
The pandemic has been a receding tide that revealed a lot about where companies were on their innovation journey.
But it’s not over. On top of that, every industry is facing its own powerful forces that are bringing change, challenges and opportunities.
So, now the question is, how confident are you that you have the right people, the right processes and right tech in place to ride the next tide?