Innovation Acceleration: Pressures Points for Change
For over a decade I have been editing the Global Innovation Index (GII) report (www.globalinnovationindex.org). The GII provides detailed metrics on innovation performance using more than 80 indicators for nearly 130 economies, which represent more than 92% of the world’s population and 97% of global GDP. Extending beyond the traditional measures of innovation such as measures of research and development, the index explores a broad horizontal vision of innovation that encompasses indicators of political environment, education, infrastructure, business, and market sophistication. Additionally, it illustrates the impact of innovation-centric policies and actions taken in various parts of the globe. The GII has evolved into a premier index on innovation performance and provides us with a unique perspective into global innovation trends.
One of the important trends the GII has observed is the need for organizations and businesses to respond to the accelerating pace of innovation. These pressures are arising from fundamental changes along three key dimensions: the technology revolution, the expectations revolution and a social revolution.
We are living in the midst of an unprecedented technology revolution caused by exponential progress along three converging technology dimensions: digital, biological and physical. Ray Kurzweil, a noted American inventor and philosopher observes, “In the 19th century, we saw more progress [in technology] than in the nine centuries preceding it. In the first 20 years of the 20th century we saw more advancement than in all of the 19th century. And we won’t experience 100 years of progress in the 21st century – it will be more like 20,000 years of progress at the current rate.”
It is difficult to visualize the true impact of this technology revolution because we, as human beings, live in a world of linear time. As technology progress continues at a frantic pace, the ability of organizations and businesses to change at a proportional pace remains limited due to inertia – both social and technological. An innovation gap is growing within organizations. This creates new leadership opportunities for those organizations that are able to successfully innovate to leverage technological change.
Think about what life looks like to a young person today. Due to the ubiquitous spread of the Internet, the world is now global, open, real-time, transparent, and interactive. Young adults can connect with friends around the planet with the touch of a finger. Access barriers have come down dramatically as smart phones, data networks and other forms of connectivity at home and work have become available to all. The inherent real-time nature of the Internet means that waiting times have been all but eliminated. Participation has become a way of life for all as the sharing of ideas, blogs, pictures and videos has allowed for the expression of ideas from all perspectives.
Today, this scenario is not very different across the developed and developing worlds. With the total number of cell phones in circulation today fast approaching the size of the global population, even the poor and new middle classes in emerging markets have similar levels of access to the global and interactive world. This is creating an expectations revolution – a broad and dramatic shift in expectations and needs that is fueling a demand for innovation across a range of organizations – both public and private business sectors.
Organizations have to adapt to the new reality of the expectations revolution. In a world of instant social media, businesses must keep their fingers on the pulse of customer complaints and be ready to respond in time. For decades, governments could afford to work at a leisurely pace with limited transparency of their actions to citizens. Now, with increased expectations of transparency and participation (interactivity), citizens are placing new demands of change upon their governments, who have no choice but to innovate in the way they operate.
As social media and technology are becoming all pervasive in our daily lives, a social revolution is taking place. Identities are getting disaggregated, status is becoming democratized and power is becoming diffused.
We are living in an “open-kimono” world. People are willingly expressing their views and sharing their lives on a variety of social media. This disaggregation of identities is changing the way we act. For example, the submitted CV is just one of the identities considered today during the hiring process. Human resource professionals have to include and evaluate multiple facets of prospective employees by aggregating information from multiple social media platforms. Views about non-work related aspects often have to be taken into account while making work-related decisions.
Status, or how a person is recognized by others, traditionally was assigned to a chosen few by those with exclusive rights. For example, recording companies used their privileged positions to choose artists to promote thus bestowing status (of popularity and visibility) upon them. Today music stars are increasingly born from the recognition provided by thousands of individuals in a democratic fashion. Would we have witnessed the success of Adele and Justin Bieber had it not been for MySpace and YouTube? The democratization of status is now requiring entire industries to innovate. For example, over decades’ pharmaceutical firms designed their marketing strategies around the power of selected doctors and medical groups within specific countries. All this has changed today as global patient blogs have erased national boundaries and created new influencers amongst patients and family members.
Thanks to the ongoing social revolution, power is no more centralized in a few individuals and organizations but more diffused than ever before. This is requiring innovations in all aspects of government and business.
So how should leaders from the public and private sectors react to these accelerations in the pace of innovation? While there are no panaceas, here are three important recommendations to help frame your response.
First, don’t deny the obvious. Technology is creating disruptions across all sectors and no industry is protected from its revolutionary impact. For example, digital agriculture is changing the way farms are organized and run in both developing and developed economies. Even in traditional manufacturing industries such as textiles, smart garments with embedded health tracking sensors are creating new frontiers of product innovation. So your industry is going to be revolutionized by technology and the changes have just started. Acknowledging and internalizing the disruptive forces of change is essential to begin framing an appropriate response.
Second, have an active outside-in learning strategy. While you should certainly encourage all internally generated ideas for innovation, it is likely that most disruptive ideas will emerge in startups outside your firm. It is important to have a dynamic business intelligence and scanning capability that proactively reaches out to and partners with innovative startups from around the world. The focus should be to learn from these disruptive partners and so the best talent should be assigned to this role. Few organizations manage this outside-in learning process effectively.
Third, lead from the top. Organizations are not designed for disruptions and so do not expect any revolution to start in a bottom-up fashion. Yes, the job of the leader is to listen to multiple voices within the firm, but a more important need is the ability of the leader to make strategic bets on new potentially disruptive ideas and to steer the firm in the right direction. Resources have to be allocated, voices of resistance have to be managed and the energy of the organization has to be mobilized towards new directions. This requires strong and clear leadership from the top.
While the acceleration of innovation presents a formidable challenge for most, it also presents a rare and exceptional set of opportunities for a few. The few who dare to innovate and change. The few who are inspired to re-imagine the future and take risks. The few who are disciplined to execute with determination and resilience.