Innovation: It’s all in the culture
- Posted on March 6, 2019
- Estimated reading time 3 minutes
You’re preparing for—or have already embarked on—a digital transformation. You’ve charted a course between approaches that boost operational efficiency and those that create new value propositions for your customers. You’ve dispensed with a complex and easily outdated strategic plan in favor of a high-level, flexible playbook. And I hope you haven’t overlooked the need to remake your corporate culture to spur agility and innovation.
How exactly are you supposed to do that?
At Avanade, we get asked that question a lot by clients. We asked it of ourselves when we undertook our own digital transformation. The answer could mean the difference between success and failure for digital transformations, including your own.
Remaking your culture into one that promotes agility and innovation is crucial because that’s what keeps you ahead of change—change that comes from competitors, customers, new technologies and more. As researchers at the MIT Center for Information Systems Research (CISR) note, “digital transformation is not about technology—it’s about change.”
Most corporate cultures are ill-suited to master change because traditional corporate hierarchies aren’t designed for that; they’re designed to minimize risk. For a long time, that was appropriate. But today, failing to optimize for agility and innovation is itself a risk, and one that businesses can’t afford.
Results in weeks, not months
One of the key ways we adapted to the swifter pace of change, and a key learning we share with clients, is to abandon lengthy project and decision-making cycles and to restructure large teams and vertical hierarchies, or silos, into smaller, more nimble, cross-discipline teams with more autonomy.
Making this change to smaller, faster decision-making processes produces tangible results in weeks rather than the traditional months or years. It even accelerates a broad digital transformation. For example, can guide a client to complete one of the first and most important steps toward digital transformation—a digital transformation playbook—in just a couple of weeks.
Innovation means breaking with tradition
Creating smaller, more nimble teams is just one of the traditions waiting for the wrecking ball. Another is the idea of data as currency within the organization. Because information is power, there’s a tendency for key personnel and departments to hoard information as a way to increase their power within the organization. That’s never been a helpful idea, of course, but it’s been a prevalent one. For the business on a digital journey, it’s a cultural relic that must be discarded.
Instead, new, more extensive and accessible means of collaboration must be adopted and promoted among both leadership and rank-and-file. Create ways to foster serendipitous connections and interactions among your small teams so they’re continually exposed to fresh ideas. When you want more of something, reward it. Corporations are generally good at incentivizing the behavior they want to promote. They need to apply that skill to information sharing and collaboration.
Lead by example
Top executives can lead by example by being better collaborators themselves. Where that’s not happening now, they need processes and practices that bring them together to design and implement joint visions. Beyond promoting collaboration, promoting a broader culture of agility and innovation also starts at the top. The chief innovation officer shouldn’t be the CIO or CTO, it should be the CEO. Further, all C-level executives should accept agility and innovation a key portfolio and work to make it pervasive among their staffs.
Reorganizing the business is another way to promote a culture of agility and innovation. Earlier, I mentioned the creation of smaller, more nimble teams. More revolutionary possibilities include moving away from a structure dictated by internal considerations and toward one that’s organized according to what’s important to your customers. A bank, for example, might reorient itself according to the lifecycle events of its customers—e.g., marriage, buying a house, sending kids to college, retirement and so on—and the financial implications and needs of its customers at each point along the way.
Put your money where your mouth is
Investing in innovation is an obvious and necessary contributor to promoting a culture of innovation. That investment can take many forms. For example, several years ago we came up with the idea of hosting a global innovation contest. Our employees compete in teams to come up with solutions for actual client challenges, the best ideas are considered for implementation and the winning team takes a $25,000 prize. We’ve turned some of these solutions into repeatable services that have been deployed at multiple clients.
Think of it as an innovative way to promote an innovative culture.