Category: Digital Economy

Today, many corporations are doing startup calls, setting up company accelerators, intrapreneurship programs, tech scouting, hackathons and datathons. However, despite these efforts, many companies still do not achieve innovation results.

Getting innovation results is somewhat difficult, but keeping innovation going is even harder. Regular innovation depends on many factors such as the top management’s leadership, the corporate culture, the available resources and the methodology.

After years of conversations with professionals in multiple sectors (e.g. construction, energy, manufacturing…) we have identified some tips to overcome factors that either kill or slow down innovation in companies.

1. Your organization is not ready to innovate

If you want your company to change the way it works, you need to help the organization get their buy-in. First of all, the management of the company needs to play an active role in communication and change management.

Get people excited. Show your company vision and goals. Explain how the world is changing and how technology entry barriers are getting lower. Encourage the organization to work together and build knowledge networks to scale up your innovation capabilities.

Make a plan. Create a roadmap to articulate the change process. There are many ways to do open innovation, prioritize the ones that can create networks of expertise as quickly as possible. Translate the global goals into actionable ones for the business areas. Invest: You will not get sustainable results without resources.

2. You only bet on one type of innovation

If you only bet on disruptive innovation, you are taking the risk of getting no results, even in the long term. If you decide to only go for incremental innovation, you can end up being the king of a big obsolete business, like Kodak.

A good option would be to create an innovation portfolio that aims for short and long-term goals. A balanced portfolio enables a regular delivery of business results while also betting on long-term or disruptive innovation.

Regular successful milestones are also important and create trustworthiness. Therefore, do not forget about incremental innovation, which is fundamental to stay competitive and also builds adaptability.

3. Business innovation results are not set, measured and shared

Two years ago, I met a recently-appointed corporate innovation director in the metals sector. I asked about their innovation goals but he said that, before setting the goals, he needed to hire people and create an innovation team. I thought that it would be more convenient to set some goals first and then hire the right people to achieve them.

Last year, an energy company’s innovation area answered the same question with the number of newly published patents. My thoughts were that patents cannot be considered as an innovation result, at least not until they bring some income.

Whenever I try to find innovation rankings online, I always find that most reports use R&D investment to show innovation performance. Actually, this indicator is rather an input and not an appropriate innovation output. At the end of the day, I wonder how companies get better results or improve their innovation without setting clear goals.

4. Innovation happens ‘by accident’

Business results, like the income from new products or services, must grow as the innovation becomes more mature within the company. However, these results should also be somewhat predictable and not accidental.

I learned from the founder of a consulting company how some companies innovate by accident and, for it to happen again, you have to keep pushing them constantly. The reason for this situation is a poor innovation management.

In order to achieve an efficient innovation, you need to actively manage it. This management is responsible for setting up a process, devote resources and monitor results. Progressive companies combine a solid innovation management, which brings recurrence, with effective execution capabilities, which bring results.

5. Innovation is only focused on continuous improvement

The higher the business results, the better the innovation. Therefore, the most innovative companies are using technology innovation not to improve their internal efficiency (e.g. reducing their production cost) but to generate more income, (e.g. through diversification).

For instance, a steel manufacturer may be considered innovative so long as it reduces the energy use or improves manufacturing traceability through IoT. However, its innovation level will dramatically increase so long as it uses IoT to generate more income (for instance, by introducing a new service to sensorize inventories of steel coils at customer sites).

Continuous improvement does not make a company innovative per se. What really makes the difference is the ability to change the products and create new operations or services.

Source: https://www.innovationexcellence.com/blog/2019/03/10/5-reasons-why-innovation-fails/

Wealth management clients are not as tech-phobic as the average wealth manager believes, concluded a study conducted by Scorpio Partnership and sponsored by FactSet.

When the research and analysis firm surveyed 877 UK- and US-based wealth management clients, it found that the appetite for digital interactions ran a spectrum.

The average survey respondent was 37 and described themselves as an early adopter or a technology follower and mirrored the technology adoption traits of millennials.

They’re interested in the digital experience, but it has to be engaging and worth something and not a reheated version of what they can get from a different channel, according to Tasha Vashisht, a senior manager at Scorpio Partners during a recent webinar.

“However, they have high expectations,” she said. “They probably will wait and try again if they have a disappointing experience.”

She cited an unnamed wealth manager that posted amount updates online and saw little uptake since the wealth manager already provided the same information through an already existing channel.

“Clients need a reason to log on,” said Vashisht.

Unfortunately for wealth managers, there is no “one size fits all” approach for which content will draw clients online.

What attracts the mass affluent client may not be the same that would attract ultra-high net worth clients.

The most straightforward approach to deploying a digitalization strategy is to ask clients what they want, she said.

Each wealth manager needs a custom digitalization strategy, which could be segmented into onboarding, execution/trade, and dealing with client requests.

One area that wealth managers could stress online is investor education, according to Vashisht. Ultra-high net worth holdings and financial sophistication do not always go hand in hand.

“Year-on-year clients are struggling with basic vocabulary like ‘volatility’ and where risk sits in their portfolios,” she said.

There is no one way to implement a digital strategy, “but as long as you have the internal focus, you are fine,” added fellow presenter Philipp Zerhusen, director of market development at FactSet.

Such programs do not need massive budgets and firms can turn to third-party providers, he added.

Source: https://www.marketsmedia.com/wealth-managers-need-to-re-think-digitalization/

When it comes to the digital economy, politicians and businesses cannot afford to prioritise some parts of the North, and ignore others.

While the politics are always complicated, the case for the Northern Powerhouse has never been clearer. Supporting growth beyond the South East by focusing on infrastructure development, local decision-making and skills not only offers huge economic potential but is the right thing to do in an economy – and a society – that has been too focused around a few London postcodes.

But there’s a real risk that, without a careful approach, we’ll replicate those old mistakes, with those areas well-placed for investment continuing to grow, while others are left behind and out of scope for the new economy.

When it comes to the digital economy – a business environment in which tech and digitally focused companies are able to grow – this risk is even higher. There’s a perception that “tech” jobs exist only for London millennials who never set foot outside of Shoreditch, or for academics moving between London, Oxford and Cambridge. These images could hardly be further from stereotypes of “left behind” towns in Lancashire, Yorkshire and Cheshire.

But why should good, future-proofed jobs be the preserve of the South? Northern communities deserve to benefit from new opportunities created through massive investment and government support. The country’s creative industries sector is growing twice as fast as the economy as a whole, and employment in digital businesses rose by 13.2 per cent from 2014 – 2017. The jobs which are being created are well-paid, with roles requiring tech skills having higher than average salaries.

There’s a risk of speaking about the “North” as if it’s one entity, whereas the truth is more complicated. There have been some big changes in urban areas such as Manchester and Leeds, where digital hubs have been established and where there are good prospects for future growth.

Read more: https://www.newstatesman.com/spotlight/devolution/2019/02/making-northern-digital-economy-reality