Every business is susceptible to disruption, but the waves of technology landing on us thick and fast create a huge pressure on leaders to stay ahead of the disruption and ensure corporate success. Leaders face an imperative to raise the pace of innovation and compete for customer mindshare, before a competitor or start-up (or a combination) blindsides their business, and blows performance out of the water. In short, firms need a new approach to innovation that leverages the speed and agility of a start-up with the security and compliance of the large corporate. Welcome to the first of five posts that lays out the groundwork. So, onto Part I:
Corporate Innovation Needs a Reboot
Cognizant’s Center for the Future of Work hears from an ever-growing number of leaders eager to inject the art of the possible into their teams, but in a safe, compliant, and tested way. What they want is the agility, pace, and devil-may-care attitude to transform work cultures stuck in the past, but they want it done in way that won’t break the organization. They want to attract the type of people that can catalyze fresh and daring ideas, yet expect them to fit in with the tried and tested status quo. It’s not going to work.
Look under the hood of the corporate beast and see what counts for innovation (I mean the real, game-changing innovation; not the stuff that tinkers at the edge) Energy spent on activities that create new revenue streams, new types of customer relationships, or radical new cost structures need prioritizing. Look around and you however, and will find teams challenging the status quo with hackathons and design thinking workshops plastering the office walls with roughly drawn sketches, seemingly complicated algorithmic equations scrawled on walls, working prototypes, and of course, the ubiquitous multi-colored Post-it notes, signaling to the broader world that, yes, innovation is taking place (Dude! Look at the Post-it notes!) No doubt everyone will get excited, buzzed and energized, but then the real decision-making clunks up and down the organization, and it takes SO long to get anything done. The energy dissipates, stymied even, as the lack of organizational agility and stodgy work cultures kick in. Fix that; then things might shift up a gear.
My take is innovation needs to move in step with the dizzying pace of new technology. Leading firms work hard to get ahead of the business changes that accompany these new technology waves — they do it so they can ride one wave to the next. Leaders need to develop a venture capital mindset and a technology portfolio to help them change and disrupt their businesses and do it on multiple fronts. What works is a structured innovation approach that segments innovation efforts around several core premises, like reimagining product offerings and service experiences (e.g. with pervasive artificial intelligence), creating new business models (e.g. by fusing AI, IoT and 5G into a new subscription pricing model), or solving a previously unsolvable problem (the Irish backstop?). And yes, hackathons and design sprints have a role to play, but to make this work then leaders must look beyond the corporate boundary and see start-ups and scale-ups as the life-blood of tech-driven innovation.
In my view, what is difficult for most corporate innovation teams to counter is that start-ups get faster traction than internal teams working on similar problems. Look at the rapid pace of transformative change unfolding across the financial services industry right now. Alliances and commercial configurations have exploded, with APIs and open data initiatives creating a wave of young, hungry Fintech entrepreneurs disrupting the traditional banking landscape. The result sees a raft of highly personalized, intuitive products and services that all of us as digitally-savvy customers prize so much. Head to London, Paris, or New York, and you will find Fintech events galore as new technologies bleed into everything, from chat-bots, natural language processing into sentiment analysis. That disruption so intense in financial services, is now on the march across every industry, as a wave of start-ups levers agile processes and a higher tolerance for risk. This art of the possible sees the rise of “Adtech,” “Cryptotech,” “Health Tech” or “Insuretech” to name a few, signposting the blend between emerging technology, start-up entrepreneurialism, and industry expertise (check out our guide to where they are). The process data that flows from customers, stakeholders, partners, employees is rich with meaning and provides a massive scaled-up understanding of millions of customers, demand, operations, etc. in incredibly quick time. And when this insight gets plugged into a bunch of passionate and creative self-starters, free from the crushing institutional inertia of a legacy corporate…then the innovation ignites.
To thrive, organizations need to be nimble, innovative, and disruptive— not words one often associates with the large, lumbering corporate beast! Heavy on process and (rightly) risk-averse, and more often than not working in silos—they need to switch it up. The thing that might be difficult to accept is that start-ups get faster traction than your internal teams working on similar problems. So, the key to moving forward is understanding what start-ups want, how they work, and where you can partner with them. So Part 2 coming soon.
PS. If you cannot wait for the grand reveal in Part 5…check out how the Future of Work supported Cognizant Connect. It’s not about running innovation experiments between both sides, getting excited, and then failing to industrialize. The Connect offering and methodology offers corporates rapid, safe, and compliant innovation from a pool of curated startups that have scale. Connect brings these scale-ups and leading corporations together, with a razor-like focus on fast and scalable innovation to achieve out sized results.