10 minute read 4 Feb 2019
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How the power of people drives digital transformation

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EY Americas

Multidisciplinary professional services organization

10 minute read 4 Feb 2019

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How do you achieve sustainable innovation?

Organizations worldwide are facing this pivotal question and are searching for the answers, many through advanced technology solutions. And real solutions may be grounded in technology, but success ultimately comes from the ingenuity of the human mind using technology in innovative ways.

This marriage of human ingenuity and ever-advancing technology is a subject of great interest to me. I recently had the privilege of serving as moderator on a webcast, "The key to sustainable innovation is human ingenuity." We featured four thought leaders who possessed a wide depth and breadth of experience and diverse viewpoints. They had a lot to say about what they're seeing at organizations across industries. It's a topic that resonates loudly today – more than 1,800 people registered to join us in the conversation.

    Together the panelists set the stage for a discussion about developing the right perspective on diversity by viewing it from yesterday, today and what it could/should be tomorrow.

    This webcast highlighted the new definition of diversity, offering a live, fully immersive and integrated experience – a real-life example of how different perspectives together can provide more insightful solutions on how diversity can become your greatest asset for innovative growth and sustainability.

    Our audience members were active participants in this knowledge quest, asking questions and participating in live polling. Questions were answered real-time and participants could begin to see the issue from many angles and reimagine their own possibilities for innovation to come to life through diverse collaboration.

    Our conversation focused on four key areas.

    1.  Integrating human ingenuity

    Today, the untapped potential of the human mind needs to be front and center on business leaders' minds.

    Integrating diversity is imperative but can prove challenging – as diversity has been traditionally defined by overly simplified labels for gender, ethnicity, education or the like.

    Proactive organizations are now redefining the definition of diversity: out with archaic labels and in with rethinking diversity in an entirely new perspective, one that recognizes diversity in terms of thought. They're redefining diversity to incorporate all the differences you can't see, from experiential to cognitive and so much more. This means organizations must take a whole new approach to looking at talent and becoming intentional and timely about integrating this new diversity power.

    Cross training teams and including a true diversity of people – including workers with autism, dyslexia or ADHD – benefits everyone because that meeting of the minds serves to reimagine old problems and collaboratively imagine new solutions.

    Our panelists had also seen more large organizations extending that intentionality to adopt startup principles such as the willingness to fail and the ability to recover quickly.

    We polled our audience about how their organizations harness creativity and ingenuity, and the majority, 27%, said their primary method is "the encouragement of trial and error."

    2.  The impact of bringing five generations into the workforce

    We couldn't hold a conversation about human ingenuity and innovation and not discuss this unique phenomenon: five generations in the workforce. I see tremendous opportunity in the coming-of-age of Gen Z. Millennials are still a dominant part of our workforce and are as important as ever. But organizations won't reap the benefits of Gen Z workers by looking at them as a younger version of millennials. They’re radically different.

    Gen Z are digital natives interested in solutions and doing things differently very quickly – just as quick as consumers and technology change. This younger generation is therefore invaluable, helping to close the gap between organizations and consumers.

    We polled our audience about how their organizations are managing differing expectations of multiple generations in the workplace. The majority, 47%, said their organization offers flexible work schedules to meet individual needs.

    Panelist Mike Kanazawa echoed this sentiment, noting that if an organization's focus is on doing amazing things for customers – and if that purpose is clear – then no matter what a person's age or background, they'll have a clear sense of why they're there and how to contribute. "That's a starting point," he said.

    It's that connectivity between all the generations that's going to make the magic happen.
    Mike Kanazawa
    EY Innovation Realized & EY Americas Corporate and Growth Strategy leader

    According to Dan Bieler, Principal Analyst with Forrester Research, "It's about bringing in different experiences. And it's helpful to reflect the differences that you have among your customers."

    Given that we are now seeing diverse environments in organizations, often with five different generational groups coming together, Bieler added further thoughts on how to leverage the value of those many generations.

    He noted that each generation brings a unique frame of reference – socially, politically and technologically – but it is the ability to work in a consolidated way across the generations that is truly powerful. "There's a lot that the more experienced people bring in terms of how to actually scale an innovation, while Gen Z brings new ways to think about problem solving," Bieler said.

    3.  How growth leaders are embracing innovation

    At the board level, more organizations are seeing innovation as a top priority, according to a recent Forrester study, with over 70% of board members in agreement. However, only about one-third of mid-level management consider it a key priority.
    Dan Bieler
    Principal Analyst, Forrester Research

    There's much more to scaling innovation than having a good idea. In fact, our panelists agreed that having good ideas is the easy part. One of the key aspects to scaling innovation, especially in a large organization, is integrating those new ideas into other enterprise functions like Finance, Risk and Compliance, and HR to create real value across the business. Companies have an easier time getting a new idea to scale by putting "purpose" rather than profit at the front end of an innovation.

    We polled our audience about what they think is most crucial to scaling innovation efforts. A majority, 30%, chose the answer: "Metrics aligned to drive new revenue and business models."

    But how is innovation different in a high-growth organization versus a stable organization?

    Panelist Roger Park, EY Americas Innovation Leader, believes that, depending on the kind of company, innovation can differ and should be bucketed into three categories:

    1. Sustaining or optimizing innovation: that's improving incrementally on what you're doing today. That should be happening all the time and it’s something that you see a lot of in a mature business.
    2. Adjacent innovation: taking an idea from one area and seeing if it will work in another. This is something you see in companies that are growing.
    3. Truly disruptive innovation: starting from scratch on something new, or forcing other companies to start from scratch and play on a new playing field. This is seen more in emerging, startup-type companies.

    4.  Actions to realize the full value of innovation at scale

    If you're going to try something new, try something big, one of our panelists said, because it's just as hard to launch a $1 billion company as it is to launch a $100 million company.

    Approach it as venture capitalists would, exercising extreme discipline in selecting which companies to fund. It's an appropriate mentality for an organization that wants to create scale, and payback for that scale.

    For example, one panelist recommended, fund five things, each of which has the potential to pay off $1 billion or more. The one that pays off is going to pay for any that fail — and all the learning gained along the way. This is the idea behind "failing fast." Only take on ideas that have massive potential and do it as an incremental project and not as part of the core innovation portfolio.

    To a person, the panel conceded that innovation is hard work that requires no small degree of discipline. It's a balance of the need for exceptional ideas on the front end with the ability to kill the scores of ideas that don't have the right potential.

    Today, there is no time for timidity. And while it's true that innovation isn't simple or easy, the perfect workforce exists for these unique times with five generations to draw from.

    We polled our audience about what they consider the primary source for generating ideas for growth in their organization. The majority, 40%, responded, "We mostly rely on our employees to collaborate and think creatively."

    In this era of possible, there's no end to the rich opportunities to build business value in new and unexpected ways.

    As food for thought (and action), it’s imperative to consider these four keys to leveraging diversity:

    1. Innovating at scale with speed is a strategic imperative and a competitive differentiator.
    2. Always have an eye towards what’s "next," which is found in youth. They are the drivers of change, propelling us forward and teaching us all to dream big.
    3. Get everyone's buy in to how the newly defined diversity resource is the key to innovation. Though it will be challenging, leaders and managers must be on the same page, learning as they go – together.
    4. Identifying problems that can't be solved in any other way than one that doesn't exist yet. Then you will possess the capacity to deliver on evolving employee and customer experience expectations.

    The key to sustainable innovation is human ingenuity

    Listen as we explore why harnessing diverse human capabilities is critical to attaining sustainable innovation

    Watch on-demand

    Summary

    In the Transformative Age, it's clear that the ability to innovate at scale is now a strategic imperative. Those who do this right will have a competitive advantage in the race to beat disruption. And while real solutions may be grounded in technology, success ultimately comes from the ingenuity of the human mind using technology in innovative ways.

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    EY Americas

    Multidisciplinary professional services organization