|Digital transformation and corporate innovation are two of the biggest trends in business modernization today. These trends are examined in State of Digital Transformation, researched by Brian Solis, principal analysis for Prophet, which incorporates a number of other studies.
The report notes that one of the challenges in corporate innovation is that executives believe that their organizations are perhaps more innovative than they really are. In a recent research project with CapGemini, The Digital Culture Gap, some 75% of senior executives believe that their organizations have a culture of innovation, but only 37% of employees feel the same. And, only 7% of organizations can test, learn and deploy new ideas rapidly.
Company cultures continue as a top impediment to change; affecting support for digital transformation initiatives on all fronts. This year, culture was tied with lack of budget as the third greatest challenge at 30.5%. Without an empowered culture focused on agility and growth, digital transformation and innovation are greatly hampered. The good news is that 52.7% of those surveyed are also investing in developing a "culture of innovation" to spark new learning, creativity, and work among the incumbent management and other employees.
Innovation is the Sixth Stage of Digital Transformation
Corporate innovation is vital to uncovering new means and opportunities to better compete. In 2016, Solis introduced the Six Stages of Digital Transformation as a maturity model for companies to benchmark their investments and progress against other organizations. The sixth stage of digital transformation is "Innovative and Adaptive." To get there requires that companies explore the innovation landscape and learn how to be innovative.
Many companies start innovation endeavors by gaining exposure to technology companies recognized for their innovation prowess. These companies include, Google, Tesla, Airbnb, Uber, Twitter, among many others. Of the companies surveyed, 37.5% have sent executives on "innovation tours" to Silicon Valley and other technology hot spots around the world. These tours introduce stakeholders and decision-makers to alternative approaches to innovation and transformation. Exposure to entrepreneurs, technology giants and investors often provides executives new perspectives that reveal new possibilities different from their day-to-day "corporate think."
As companies gain exposure to innovation ecosystems, often executives are compelled to build innovation labs
with dedicated resources (55.9%) to advance new expertise, partnerships, and opportunities.
With digital transformation, companies are not simply adapting to new environments; they also are exploring what is next. Each year, a growing number of businesses are trying to accelerate innovation through formal internal and external programs (39.2%).
More and more companies are also diversifying their investments beyond organizationally led innovation efforts by also establishing corporate venture-capital initiatives. In 2017, for example, 19.7% of companies surveyed had established a corporate venture capital branch to invest in funds, startup companies and/or acquire startups to help them further innovate.
Digital transformation faces many challenges as companies attempt to learn and grow. Of those surveyed, 30.9% stated that digital transformation is viewed as a cost center. As a result, 30.5% and 30.1% cite a lack of budget and resources, respectively, as hindering business advancement. Although digital transformation and ultimately innovation are key to progress, unfortunately, almost one-fourth of respondents claim that politics, egos, fear and other human barriers stand in the way of digital transformation. And, 20% say that there is no sense of urgency within the organization to change.
Making the case for digital transformation and innovation has never been more important. Savvy executives are finding creative ways to unite stakeholders around shorter-term initiatives where innovation is tied to something tangible and measurable.
For example, 40.2% of companies are accelerating innovation by tying progressive and inventive efforts to short-term formal programs (internal and external). Those companies that are excelling prioritize the digital customer experience and employee experience to learn, identify gaps and opportunities, and define innovation roadmaps. More so, 42.6% are uncovering ways to link innovation KPIs to business value, i.e., ideas generated, proofs or concept in pipeline, new products created, etc.
("Corporate innovation - The Next Chapter of Digital Transformation," by Brian Solis, The Next Web, October 25, 2017. Copyright 2006-2017 The Next Web B.V.)