Nearly half of the firms we survey are prioritizing innovation as key to their business strategy. When I step back and think about it, the reason for this is easy to understand: Exponential changes such as Moore’s law in the past and Metcalfe’s law today are accelerating the pace of business. In a recent study of 26 senior technology decision makers, 100% said that the pace of business is faster today than it was five years ago. Point is, you feel it, I feel it . . . everybody feels it. And it’s that pressure to keep up that is driving firms to value innovation, set up innovation teams, and task these teams with applying emerging technology.
For the first time ever, emerging technology investment has superseded customer understanding as the No. 1 thing firms want to do to be more innovative. One person from a firm we interviewed said, “Emerging technology is going to be essential to the future of our business. We know we need it to survive and compete.” But doing so brings a key challenge that you will face when applying emerging technology in order to innovate.
Succeeding With Technology-Driven Innovation Is A People Problem
We coined the term “technology-driven innovation” to reflect the idea that for many advanced firms, technology capabilities, especially those that are new and emerging, are dominating the innovation agenda. While it may seem counterintuitive at first, the problem with emerging technology in innovation is fundamentally with people — not the technology.
My colleague James Staten’s latest report, “Overcome Internal Barriers To Successfully Innovate,” shows that technology only exacerbates this when you mix it into the innovation stew because it becomes too easy to blame the emerging technology rather than look at yourself and say, “We have people problems.”
Let’s drill a bit deeper into what James’ research shows.
Internal Barriers Plague Disruption Dreams
This is my take, summarizing James’ research. He says it more eloquently in his report:
“These types of leading [disruptive] innovations can be hard for employees to embrace, as most humans fear change, especially ones that disrupt existing processes, goals, and deliverables.”
He identifies five barriers that, at their heart, are people problems:
- Tactical or risk-adverse corporate culture. For example, what held Kodak back was internal employees who saw digital photography as negatively affecting its traditional photography business, even though the shift to digital was clearly coming.
- Fear of change. Incumbents have a vested interest in keeping things the way they are. Innovation cannot happen if a company’s people resist necessary improvements that allow innovation to flourish.
- Budgetary impacts of innovation funding. Innovation funding has to come from somewhere, and it’s most likely the core business. When a product or operational department sees new innovations taking away funds from its core budget, your departmental employees will most likely view innovation negatively.
- Tactical business objectives and metrics. Investing in innovations negatively impacts a company’s quarterly performance metrics for existing products and services because budget and engaged employees’ hours for the related core business teams are needed to drive the innovation forward. As a result, a company’s tactical leaders who are driven and compensated based on profit and loss performance indicators may resist and even hinder innovation efforts.
- Fear of failure. Funding, advancing, and successfully launching innovations requires efforts to address how a company approaches failure acceptance and new ideas. Focus on improving your company’s culture so that innovation can fit in.
Knowing You Have An Emerging Tech People Problem, What Then?
My take is that digital innovation teams need to work on solving people problems . . . yes, I said that right. Digital innovation teams must take on the challenge of helping their business overcome innovation dysfunctions that ultimately boil down to unresolved people problems. This is a new frontier for innovation teams and totally off the reservation for emerging technologists who just want to kick the tires on new stuff.
My advice is to ask yourself, “What is the people issue behind this technology problem?” The answer will help you pilot new ways to think about overcoming perceived technology barriers with people changes. For example:
- When it looks like technology maturity is to blame, identify the fear at work. Is it fear of failure? Fear of change? Fear of risk outcomes? Create pilots that change incentives to help employees overcome fear-based responses.
- When it is a technology funding issue, look at how your firm measures success. Pilot ways to measure success that are less tactical and more oriented toward achieving future strategic readiness.
Here on the CIO team at Forrester, these are just some of the findings, ideas, and research we are putting out right at the intersection of digital, innovation, and emerging technology. Please follow myself, James Staten, Bobby Cameron, and Matt Guarini on our blogs to catch our latest thinking.