By Mark Zawacki
We WILL get on the other side of this, better days ahead! Prior to COVID-19 a storm was already brewing for large incumbents globally pursuing innovation, transformation and digital (“ITD”). There was a lot of activity, but the actual results have been largely quite lacklustre. To wit:
96% of all new corporate innovation efforts fail to make a return on investment (Deloitte Doblin)
94% of executives globally surveyed are dissatisfied with their firm’s innovation performance (McKinsey)
83% of digital transformations fail (McKinsey)
Only 13% of employees are actively engaged at work (Gallup Q12 Survey)
Only 12% of executives surveyed “strongly agree” their business leaders have the right mindsets to lead them forward (MIT SMR)
Only 8% of executives surveyed believe their business model will remain viable in the face of relentless digitisation (McKinsey)
Only 9% of executives surveyed “strongly agree” that their organisation has the skills at the top to thrive in the digital economy (MIT SMR)
Only 3% of large multinationals surveyed have made material progress at strategic transformation (Innosight)
There are a myriad of structural, organisational, methodological, behavioral, political, cultural and advisorial impediments standing in the way of true transformative innovation. The headwinds on ITD have never been stronger.
In light of the COVID-19 pandemic, every industry is changing before our very eyes. Industry boundaries are flexing, tired business models are being utterly destroyed, and high cost structures forever exposed. Every single industry is under massive upheaval, very little will remain intact and untouched. One only has to look at Retail, Transportation, Hospitality and Tourism, Commercial Real Estate, Education, Energy, Healthcare, Entertainment and Insurance to see the massive changes coming to every sector globally.
The stark paradox for incumbents attempting further ITD initiatives is clear: never has there been a greater time to innovate, yet standing in the way are a variety of significant obstacles including (a) an inability for many corporate innovators to add bottom line value, (b) tired approaches how best to do ITD, and (c) heightened C-suite risk aversion and slashed budgets in light of COVID-19, etc.
Every corporate innovator needs a new playbook, both for the longer-term and the short-term. Over the longer-term, corporate innovators will need to significantly modify several aspects of their ITD model:
Change the very assumptions by which they pursue ITD
Materially change ITD measurement and incentive systems
Identify and adopt more impactful ITD methodologies
Identify different ecosystems to participate in
Identify, attract and retain new people with different skills
Over the short-term, corporate innovators will need a new 90-day plan, to get the C-suite aligned for the opportunities ahead:
Is there tight alignment between C-suite and ITD teams on priorities going forward?
How are we going to do ITD differently this time to get real results?
Do we have the resources in place to execute? (financial and talent)
So, are you ready to “rethink everything” and innovate how you actually innovate? It’s time.