Every organization has the capacity to be innovative, but not all companies are capitalizing on this potential. A 2019 Boston Consulting Group analysis of today’s most innovative companies shows that the businesses with the most successful digital transformations "use AI, platforms, and ecosystems to enable themselves and others to pursue new products, services, and ways of working.” The use of technological tools can launch you into the realm of incredible digital success.
Despite committed efforts and investments of time and money, innovation continues to be an unattainable goal for many companies. A 2019 McKinsey survey claims that only 14% of business respondents that have attempted a digital transformation have made performance improvements. The process of trial and error can be time consuming, so it is essential to identify the root of your problems in order to maintain progress and save money.
Recognizing the Warning Signs
Spotting the symptoms of a lack of innovation is a matter of knowing where to look. Some of the warning signs are:
- There are no mechanisms that encourage new ideas. To maintain healthy innovation, it is necessary to implement systems such as brainstorming sessions and incentives. These will create a channel within your business that drives innovation, rather than a creative plateau.
- You do not have a long-term strategic outlook. The future is coming, whether you’re ready or not.
- You attempt to preserve legacy systems. Too often, companies spend large amounts of money on systems and procedures that are no longer effective. Holding onto these traditions hurts your business economically, as it does not maximize the value of your expenditure.
- There is a lack of budget for future developments. Unless you allocate funds to pursuing and implementing technology as fast as it happens, your company will likely find itself playing catch-up. Plan now for future systems and processes to keep up to date with developments.
- Your team is lacking a designated leader that oversees digital innovation. In order to grow, someone must take the lead and push the project along. Digital transformation does not happen naturally, but it must be a well-supported company goal.
Importance of Innovation
Any successful organization has the ability to generate new product or service ideas, while still providing original solutions to client problems.
In our constantly-shifting global economy, innovation is crucial to success. The implementation of new concepts adds value to your business and your customers by adapting to their increasing expectations. Including new methodologies provides your business the competitive edge you need to outperform your competitors and succeed in the future.
Consequences of Falling Behind
The shift to digital technology has affected every aspect of every industry. Organizations that do not undergo a digital transformation will be unable to maintain an efficient presence in our tech-guided world and will not provide customers with the digital experience they expect. Another McKinsey published research study shows that companies who embrace digital transformation performed well, while those that stiff-armed change suffered a decline in business.
The costs of falling behind are tremendous. You can expect repercussions such as lost sales to competitors offering e-commerce, apps and electronic order-tracking. On the operations side, companies that failed to implement digital initiatives floundered in terms of inventory control costs, incurred higher staffing expenses because of the inability to downsize labor hours and experienced more complaints resulting from errors by overworked humans.
Pave the path for innovation by identifying technology that can achieve your most pressing goals. Once you and your team embrace a shift to digital solutions, you will see increased productivity, revenue and, ultimately, success. From here on out, the only way is up.