Digital transformation: 3 steps to enable innovation
Karli Kapala
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Everyone wants to be seen as innovative. Innovation conjures images of exciting, dynamic companies that move fast, generate great results, and leave everyone (employees and customers) happy.
Unsurprisingly, innovation repeatedly ends up among organizations’ top focuses. A Boston Consulting Group study found that in 2021, 75 percent of businesses named it one of their top three priorities, up ten percent from 2020.
Unlock the ability to innovate
But as a McKinsey article notes, “Innovation is difficult for well-established companies.” Legacy systems, thinking, and processes can hamper the ability to turn ideas into tangible products and services that have a real impact.
That’s why many businesses are accelerating digital transformation programs: They want to scrap the old ways of working so they can be more innovative in fast-paced, disrupted marketplaces.
[ Also read Digital transformation: 4 key building blocks. ]
So, what’s holding them back? Often, it’s their approach to digital transformation itself. Or rather, it’s their way of deploying technology. Many companies acquire a solution, build a capability around it, and then look for a problem that it solves exactly. When they find that problem, they deploy the solution. Then the process starts again.
Look at automation. Most companies have deployed robotic process automation (RPA) to some degree, tackling low-value tasks and automating them. The problem is, once that has been achieved, the value it delivers rarely matches their expectations. There’s a gap that many companies struggle to bridge as they don’t know what to do next.
3 steps to innovation success
For example, much is made of how many jobs will be automated. But what many people miss is that this doesn’t refer to jobs as roles but as tasks. McKinsey estimates that about 30 percent of activities in 60 percent of all occupations could be automated. That means many people will see their workloads change as up to a third of their activities are automated. As a result, their roles will evolve. But we can’t predict what their roles will look like until the tasks are automated.
It’s this lack of visibility that hinders companies from realizing actual value. To solve this, they need to change their approach. How? By following these three steps to innovation success:
1. Take a top-down approach
As noted above, many organizations currently deploy a solution and then look for a problem that fits. That needs to be flipped: They should first identify a problem or opportunity and then create a solution – whether by procuring one, building on something they already have, or developing something new. This is vital to realize value across the entire organization.
2. Think end-to-end
Thinking end-to-end means looking at issues holistically rather than tackling them individually. Only by looking at how problems and their solutions link to each other can businesses begin to enjoy greater incremental value.
Put another way, the returns will be much higher by fixing more problems or embracing more opportunities in tandem than by solving issues in isolation.
3. Go low- and no-code
Thinking holistically isn’t just about tackling challenges; it’s also about breaking down the barriers that stop functions from working together.
Traditionally, technology deployment requires significant technical knowledge and getting business and IT on the same page can be a stumbling block. With low- and no-code tools, cross-functional teams can be developed to help deploy solutions that fit with the organization’s tech stack while also meeting business objectives.
These fusion teams enable people with different skill sets to come together and share experiences to generate new ideas and perspectives. It also helps maintain momentum in times of technical skill shortages and high demand for IT talent.
Realizing value through innovation
Whether specifically automation or looking more broadly at digital transformation, many businesses are already well advanced in their journey. What’s stopping them from being truly innovative is the ability to move beyond looking at individual issues to taking a more end-to-end approach.
To get there, they need to rethink their mindset to stop looking for problems and instead start with the challenge. The proliferation of low and no-code tools offers immense opportunities to take a holistic view of their technology deployment and how they build teams and generate new ideas. Only by following these steps will organizations be able to start realizing greater value by being genuinely innovative.
[ Discover how priorities are changing. Get the Harvard Business Review Analytic Services report: Maintaining momentum on digital transformation. ]
