A new book from Deloitte and the MIT Sloan Management Review, The Technology Fallacy: How People Are the Real Key to Digital Transformation , addresses this question to help organizations understand how to cultivate a environment conducive to innovation .
Today, at a time of rapid digital transformation, innovation has become critical to survival, and to innovate IT leaders must facilitate a ‘shift’ in the organization’s mindset to accept a certain dose of risk.
“You have to be curious as an explorer,” says Anh Nguyen Phillips, researcher in the field of digital transformation at the Deloitte Integrated Research Center, and one of the authors of the book. “But you have to combine this curiosity with the discipline and structure of a scientist – develop a hypothesis, build experiments to test and confirm that hypothesis in the most accurate way possible. In this way you eliminate and isolate variables to learn what works and what doesn’t. ”
Studies show that risk appetite, experimentation and failure are all needed to cultivate innovation. And yet, most organizations are optimized for efficiency and productivity. Because of this, most IT cultures are designed to eliminate variety, reduce experimentation, and minimize risk.
“This is where most organizations get stuck.” says Phillips. “Their IT functions are approached in a specific and traditional way to keep the lights on and things moving, but now they need to innovate and minimizing variation and failure is no longer the only goal.”
Pilot and test programs – in which failure is a plausible outcome – are an integral part of innovative organizations. Here, rapid learning, iteration and adaptation are the first goal, and all can be achieved by changing the way you speak and react to failure, explains Phillips.
“You have to start by moving the conversation – culturally – away from failure and close to the concept of learning,” she says, which involves both curiosity and scientific discipline. “In IT, failure used to be the worst thing that could happen, but you have to consciously change that connotation. The best organizations don’t think in terms of failure, they think in terms of lessons learned, and they take those lessons and use them to become truly competitive. ”
Innovation is not always a product of spontaneous inspiration. Instead, organizations need to focus on carving out the specific time of innovation. It may seem counter-intuitive, but innovation can be cultivated through conscious thought and will, says Phillips.
“If you want to innovate, you have to challenge what you do today. One key is to set aside time for creativity and innovation, ”says Phillips. “Some companies set aside, quarterly or annually, days of innovation, in which the IT department meets and tries to think outside their natural tasks. They are encouraged to think outside the box, a kind of hackathlon of business innovation. ”
“It is also vital to bring stakeholders together to evaluate the ideas and projects generated by these initiatives and to plan their integration into the day-to-day work of the company,” explains Phillips.
“It is important to invite management to weigh and present the winning ideas and to make sure that they are implementable and implemented. It is one of the most important stages, because it improves visibility and has a massive impact on the entire organization; often the results of such initiatives are forgotten on dusty shelves, and that makes no sense. ”
To be successful in any innovation initiative, you need to determine which risk and security policies are flexible, and which are not. You need to make sure that everyone is aware of these policies to ensure that the principles of risk acceptability are communicated.
Also, set a short deadline for most experiments. Everything must be done in small steps, on a small scale, and the results must be constantly checked. This feedback must be addressed and integrated directly into the process, but it is important not to be distracted by these ad-hoc iterations that do not facilitate learning. Use what you learn in future versions of the idea and continue the process. Over time, the results can be amazing and the impact on the organization significant, Phillips explains. It can change the way employees approach their jobs over time.
“That changes the way people think and therefore the way they work,” she explains. “The IT team can develop closer relationships and better understanding of customers and their business; they can think about how their work affects the customer experience by constantly keeping an eye on innovation. ”
Opening the Process
There is this myth that innovation always starts from a single man who has a ‘Eureka!’ but that’s not the case, not in business, especially not in IT, Phillips explains. The need for collaboration is critical, so be sure to approach clients and stakeholders and invite them fully into the process.
“Traditionally, IT has been isolated and closed, and that has left no room for iteration of ideas,” she says. “But some of the most successful and innovative organizations have realized that IT, working collaboratively with various functions, business areas, generates innovation.”
Start by educating stakeholders on the principles that guide this approach, then on the concept of iteration and feedback, and show them how they, in turn, can use this process to enhance innovation, the researcher advises.
Developing a culture of innovation is feasible, it takes a little time, some dedication to thinking differently to understand the risks and benefits.
Such ideas become even more significant when we consider the state of the business environment in Romania, where there is certainly room for innovation, often even with minimal risk.