Digital transformation is creating a more connected world, and providing new opportunities for companies to grow. Against this backdrop of constant change, leaders can invest in the future of their business by creating a culture of innovation. This will act as an insurance policy against any radical disruptions that occur in the future.
There are countless studies which show that a clear return on investment can be achieved when organisations have innovation at the heart of their culture. A PWC study found that companies who allocate at least 25% of their research and development budget to software and services (as opposed to products) report faster revenue growth than their competitors who allocated a smaller proportion. Added to this, an Accenture study revealed that 51% of organisations with a formal innovation system and structure in place are first to market with most innovations, products and new services. Creating a culture of innovation can create considerable business success.
To develop such a culture, it’s important that there is an organisational mindset that promotes and supports the ideas of individuals. Your culture is more than an abstract concept. Instead, it’s a way to produce measurable and quantifiable change. While this isn’t always easy to implement, but it’s one of the best way to drive sustainable competitive advantage that will enable you to achieve short and long term goals. It’s about focusing on tomorrow, as much as you do on today.
DEFINING A CULTURE
Historically, organisational value has been based on tangible assets, like buildings, brands and human capital. Technology has turned this on its head. Digital organisations today are judged on much more: their beliefs, their purpose, their contributions to society, the list is endless. This is what your culture needs to be based on. In essence, your company’s identity should be determined by the answer the question: what does our organisation aspire to be?
What’s more, during any organisational transformation, leaders must be open to change and ready to take opportunistic risks. To facilitate this, certain foundational leadership skills will continue to be critical, like endurance and adaptability. Yet in the digital age, it’s also important that leaders know how to unleash talent, and occasionally fail, in order to accelerate performance. Organisations that invest in leaders who have these skills will adapt more quickly to the needs of an increasingly digital future.
Creating a culture of innovation requires extensive planning and, most importantly, strength of execution. Even with a plethora of creative ideas, bringing those ideas to fruition requires strategy and execution, and many organisations struggling to fill this gap. But even if you were able to realise just 20% of your organisation’s creative ideas, this could translate into significant growth and a radical positive transformation.
Having a formal innovation system and structure in place can see your organisation reap significant yields. But it requires you to pay constant attention to the culture that you nurture within the workplace. Take a look at our 9 Indicators of Innovation to learn more about the specific traits that you should nurture within your organisation, in order to generate ROI through innovation.
