In today’s dynamic market, competition is increasing at a dramatic rate not only from traditional competitors, but also from players in adjacent sectors and new digital entrants, putting tremendous pressure on enterprises to innovate. In addition to this external pressure, executives face internal pressure by company boards and shareholders to drive more innovation.
In my first blog in this series, I focused on three key success factors for rethinking how enterprises do business in the digital age—innovate, change and operate—and how each needs to be done agilely. In this blog, we hone in on the innovation factor, sharing key recommendations for driving more innovation across the business in terms of products, services, pricing, technology, etc.
The good news is that many enterprises are making a lot of progress in the race to innovate. Seventy-four percent of the executives we interviewed as part of a CGI proprietary study in research partnership with IDC are investing in innovation vehicles, such as digital labs or garages, and in creating work environments with a stronger focus on innovation. Interestingly, when you compare the innovation leaders with the followers, the gap is significant. Followers need to improve their innovation capabilities by at least 55% to catch up with the leaders based on data from our most recent CGI Client Global Insights.
Becoming an innovation leader, however, requires more than just building innovation capabilities; you also have to deliver innovation. This requires closing any agility gaps and implementing innovations quickly across the enterprise at scale. Data from our CGI Client Global Insights suggests that followers need to improve their agility by at least 76% to catch up with innovation leaders.
A major challenge therefore in today’s increasingly competitive market is building strong innovation capabilities while achieving the agility to get proof-of-concepts out of the lab and into the business. Many enterprises have strong innovation capabilities, but lack agility and vice versa. So, how do they go about meeting this challenge?
Here are a few key recommendations:
Drive innovation from the shop floor: First, it’s important to consider ways to free up your employees’ time to think about more about innovation. How can you start innovating from the shop floor? How can you begin to generate ideas from the people who are working closest to your customers?
Focus your innovation efforts: Second, think about how to focus your innovation efforts. Many enterprises are innovating, but their innovation has little impact on their day-to-day business. Insights around what customers want and need can feed and direct your innovation focus.
Develop the right mindset: Consider how much time your employees are spending learning new things and, in turn, creating new ideas. Invest in building a learning culture that helps employees develop a curious mindset.
Build a collaborative working environment: Fifty-seven percent of the executives we interviewed in our CGI Client Global Insights tell us that they’re well on their way to creating a more collaborative work environment. They’re implementing processes and tools that enable employees to collaborate more across the enterprise, which, in turn, drives innovation.
Ensure good governance: Good governance is essential for effective decision-making, which enables you to bring innovative ideas quickly to the table and ensure you fund, resource and successfully deliver the right innovations.
Broaden your ecosystem: Thirty-four percent of the executives we interviewed are looking to partner as a way to gain access to new technologies that will help them innovate. Twenty-four percent are working with partners to build innovation capabilities.
Think holistically: Think more holistically about the role of partners and customers in driving innovation. Sixty-four percent of the executives we interviewed are investigating open or crowd source innovation, 64% are pursuing joint ventures and 59% are collaborating with partners to support research and development. Enterprises also are relying more on customer input in the design and proof-of-concept stages.
Simplify: Simplification is a key principle in pursuing innovation. It applies not only in terms of designing minimum viable products (MVPs), but also in terms of building a minimum viable organization. Innovation doesn’t involve just products and services; it also involves building a lean organization that can operate more agilely, getting MVPs out of the lab efficiently and into the business.
Master emerging technologies: Emerging technologies are playing an increasingly important role in driving innovation. Master and capitalize on emerging technologies to provide the foundation for innovation across different areas of the business.
By following these recommendations, enterprises can build the capabilities and achieve the agility they need to become true innovation leaders. They also can drive the change that’s necessary to stay ahead of the competition, which is the subject of my next blog in this series. Stay tuned for that blog and, in the meantime, read our innovation brochure.