5 minute read 13 Jan 2020
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Five ways to enhance your innovation strategy with risk

By

Nitin Bhatt

EY Global Advisory Risk Transformation Leader & India Technology Sector Leader

Digital trust evangelist. Diversity & Inclusiveness champion. Classic rock buff.

5 minute read 13 Jan 2020

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A risk-enhanced approach to technology that empowers organizations to innovate with confidence.

Technology is the gateway to a better tomorrow. The age of technology is well and truly upon us. Everything about the way we live, move, interact and consume is being transformed in some way by digital advances taking place in almost every field imaginable.

These innovations often carry huge potential. Internet of Things (IoT) devices are just one example of how some technologies are already revolutionizing entire industries. In the utilities sector, for instance, smart grids and meters are allowing companies to cut down on inefficiencies, while better meeting the growing demand for energy. Meanwhile, financial services institutions are now considering applications of blockchain beyond cryptocurrency to enhance security or reduce process inefficiencies.

New technologies are also helping to solve some of the great challenges of our modern age, including health epidemics, inequality and climate change. Take for example forestry: with the help of AI, big data and cloud computing, teams of foresters and biometricians are now able to predict the size, species and health of forest trees, saving countless hours of manual fieldwork and helping to combat global warming.

The trust deficit

Yet it is impossible to ignore the many risks that are equally inherent to these technologies. Technological interconnectedness, complexity, and rate of deployment have also given rise to harmful side-effects ranging from limited operational shutdown to structural damage and even loss of life in the very worst cases.

When technology fails to deliver as expected, organizations creating or deploying these technologies face potentially severe financial, operational and reputational consequences culminating in a breakdown of trust. Trust is the crucial bond on which organizations rely to not only survive but thrive through immensely complex and uncertain times. When technology is poorly designed, mismanaged and misused, consumers, employees, partners and stakeholders alike cease to have confidence in organizations.

Enhanced by risk: the Trust by Design approach

Pursuing technological innovation should never be a gamble. However, today most organizations still adopt a reactive, ‘make do’ attitude to technology. They often focus on repairing issues rather than preventing them, and deal with consequences as and when they occur. This is no longer enough to maintain and nurture key bonds of trust at all levels.

Organizations need to be proactive and forward-thinking in their approach to innovation to grow sustainably and confidently in a fast-changing world. They must evaluate and balance the appropriate amount of outside, downside and upside risk necessary to advance. To do so, it is essential that they adopt a holistic, business-wide risk-mindset from the very onset of any project or initiative, that guarantees trust is protected at every turn. We call this approach Trust by Design.

Trust by Design is a new perspective on risk and technology for leaders and organizations who want to embark on the journey of transformation and innovation, confident that they can create and sustain trust at every step.

This approach comes to life through five key strategic points:

  1. Granting Risk leaders a seat at the table with the rest of the board and decision-makers to enhance initiatives with a risk-informed perspective.
  2. Instilling a risk mindset and culture across the organization to acknowledge, understand and harness the ever-increasing types and sources of upside, downside and outside risk that surround organizations today.
  3. Embedding risk in product and service design and operations to accelerate speed to market while sustaining trust.
  4. Promoting a concerted push within the organization toward transparency, purposeful design, and combined performance and resilience.
  5. Communicating and capitalizing on your organization’s commitments to nurturing a strong and consistent risk culture across the business. 

Trust by Design is a new perspective on risk and technology for leaders and organizations who want to embark on the journey of transformation and innovation, confident that they can create and sustain trust at every step.

Innovating with confidence in the Transformative Age

By following these five steps, organizations can create purposeful products and services that incorporate risk thinking from their very inception, making malfunctions less likely, errors less costly, restoring certainty, and boosting trust.

They can better prepare for unintended consequences, meaning that they are able swiftly react, mitigate and adjust operations to minimize damage. This leads to greater resilience, and improved chances of success in the short and long terms.

Internally, these initiatives also enable leaders to establish a sense of responsibility in employees, encouraging them to ‘do the right thing’ when making crucial decisions around technology. In parallel, they empower employees to interface confidently with consumers and stakeholders, secure in the knowledge that their organization’s technology is reliable and fit for purpose.

Ultimately, Trust by Design helps organizations prove to customers and the wider society that they can be trusted with technology, by giving them the right perspective to ensure reliable and effective performance of products and services at all times.

Summary

Organizations need to adopt a holistic-risk mindset as they embark on the journey of innovation. EY believes in the Trust by Design approach, which gives organizations the confidence that they can create and sustain trust at every turn, empowering them to thrive in the Transformative Age.  

About this article

By

Nitin Bhatt

EY Global Advisory Risk Transformation Leader & India Technology Sector Leader

Digital trust evangelist. Diversity & Inclusiveness champion. Classic rock buff.