The possibilities created by digital technology have never been so numerous, or accessible. New technologies, particularly in data, speech, image, text, and vision processing are not coming – they’ve arrived. The cost of technology from cloud to genome sequencing and battery storage to bandwidth is falling rapidly. All these changes trigger great opportunity.
The failure to convert the possibilities created by new technologies into activities in the real world results in ‘trapped value’. We can see failures to exploit the possible across all domains, from the individual enterprise to society.
For example, enterprise trapped value may arise from knowing that an economic opportunity is available, but existing business models or capabilities can’t unlock it. Examples such as the generally slow response of the retail bricks and mortar companies to new digital sales and delivery models illustrate this. Many bricks and mortar lost competitive advantage owing to the failure to release the trapped value in the brand, knowledge and infrastructure of their organizations.
We can see societal trapped value may exist when commercial activities fail to create benefits for the citizen. For example pollution or carbon emissions, create costs that are borne by society rather than the emitter or polluter. With technology today, we can do better in connecting the polluter and the payer.
Few organizations have been successful in consistently releasing value. Those that continuously apply innovation to change how they work across their core and new businesses thrive. These adaptive, living organizations outperform their peers. Amazon and Microsoft are examples of organizations that successfully reinvent and reform to release value.
In contrast, some organizations simply fail to innovate at all and pay the price. Toys R Us is one of many examples of sharp, even terminal, decline in performance following a failure to change. Today, we can see the automotive and banking industries struggling to adapt fast enough to the emergence of new technology in their industries.
The pace of change driven by technology advances requires all successful organizations, including those in the public service, to adapt more quickly. So what are the characteristics of organizations that are most adept at applying innovation to release trapped value? There are three main features to their approach:
- Change-oriented: they possess the courage to apply innovation intensively reinventing ways of working and achieving deep organizational change.
- Outcome-led: they foster innovation efforts across the organization, and tie these directly to financial outcomes
- Disruption-minded: they commit to investing more aggressively in truly disruptive innovation initiatives that have the potential to create entirely new markets.
These organizations also do things differently. They adopt practices which encourage and drive innovation. Accenture’s survey on innovation in business highlighted the following common practices underpinning innovation:
- Hyper-relevance – using technology to personalize products, services and experiences to meet customers’ changing needs
- Technology propelled – mastering the leading edge technologies that drive innovation
- Data-driven – using data to understand what and how to change
- Asset smart – making use of existing technologies, not trying to build from scratch
- Inclusive – breaking down silos to bring parts of the organization together to focus on outcomes
- Talent rich – enabling a workforce with the right skills to innovate
- Network powered – working with partners across an ecosystem
All of these innovation practices are as relevant to the public sector as the private. And in my next blog, I’m going to look at how some of these innovation practices could be applied to address some of the key challenges facing revenue organizations.