A decade ago, many still questioned the relevance of digital technology. While Internet penetration was already significant, e-commerce made up less than 4% of retail sales. Mobile and cloud computing were just getting started and artificial intelligence was still more science fiction than reality.
Yet today, all of those things are not only viable technologies, but increasingly key to effectively competing in the marketplace. Unfortunately, implementing these new technologies can be a thorny process. In fact, research by McKinsey found that fewer than one third of digital transformation efforts succeed.
For the most part, these failures have less to do with technology and more to do with managing the cultural and organizational challenges that a technological shift creates. It’s relatively easy to find a vendor that can implement a system for you, but much harder to prepare your organization to adapt to new technology. Here’s what you need to keep in mind:
When I speak at conferences, I’ve noticed that people are increasingly asking me about the unintended consequences of technological advance. As our technology becomes almost unimaginably powerful, there is growing apprehension and fear that we will be unable to control what we create.
This, of course, isn’t anything new. When trains first appeared, many worried that human bodies would melt at the high speeds. In ancient Greece, Plato argued that the invention of writing would destroy conversation. None of these things ever came to pass, of course, but clearly technology has changed the world for good and bad.
The truth is that we can’t fully control technology any more than we can fully control nature or each other. The emergence of significant new technologies unleash forces we can’t hope to understand at the outset and struggle to deal with long after. Yet the most significant issues are most likely to be social in nature and those are the ones we desperately need to focus on.
One of the most rewarding things about writing my book Mapping Innovation was talking to the innovators themselves. All of them were prominent (one recently won the Nobel Prize), but I found them to be the among the kindest and most generous people you can imagine, nothing like the difficult and mercurial stereotype.
At first, this may seem counterintuitive, because any significant innovation takes ambition, drive and persistence. Yet a study at the design firm IDEO sheds some light. It found that great innovators are essentially knowledge brokers who place themselves at the center of information networks. To do that, you need to build trust.
A recent report from Accenture Strategy analyzing over 7000 firms found this effect to be even more widespread than I had thought. When evaluating competitive agility, it found trust “disproportionately impacts revenue and EBITDA.” The truth is that to compete effectively you need to build deep bonds of trust throughout a complex ecosystem of stakeholders.
Earlier this year, I published an article about no-code software platforms, which was very well received. Before long, however, I began to get angry — and sometimes downright nasty — comments from software engineers who were horrified by the notion that you can produce software without actually understanding the code behind it.
Of course, no-code platforms don’t obviate the need for software engineers, but rather automate basic tasks so that amateurs can design applications by themselves. These platforms are, necessarily, limited but can increase productivity dramatically and help line managers customize technology to fit the task at hand.
Similarly, when FORTRAN, the first real computer language, was invented, many who wrote machine code objected, much like the software engineers did to my article. Yet Fortran didn’t destroy computer programming, but democratized and expanded it. The truth is that value never disappears. It just shifts to another place and that’s what we need to learn to focus on.
When Barry Libenson first arrived at Experian as Global CIO in 2015, he knew that the job would be a challenge. As one of the world’s largest data companies, with leading positions in the credit, automotive and healthcare markets, the CIO’s role is especially crucial for driving the business.
So he devoted his first few months at the firm to looking around, talking to people and taking the measure of the place. “I especially wanted to see what our customers had on their roadmap for the next 12-24 months,” he told me and everywhere he went he heard the same thing. They wanted access to real-time data.
If Experian was a startup, that would have been a relatively simple task, but the decades-old company relies on the legacy systems it has built to maintain an extremely high level of reliability and security. So Libenson embarked on a journey to transform Experian’s digital infrastructure and, in the process, transformed its business as well.
Saul Alinsky once observed that that every revolution inspires a counterrevolution. “Once we accept and learn to anticipate the inevitable counter-revolution,” he wrote, “we may then alter the historical pattern of revolution and counter-revolution from the traditional slow advance of two steps forward and one step backward.”
President Bush’s conservative agenda ultimately led to Barack Obama’s sweeping victory and control of both houses of Congress. The changes Obama enacted, in turn, helped lead to Donald Trump’s improbable rise to power. Now, perhaps not surprisingly, the Democrats have retaken the House and many governorships, although lost seats in the Senate.
As I explain in my upcoming book, Cascades, the period after an initial victory is often the most difficult in any movement for change (an insight I got from my friend Srdja Popović). So the question today, after an election in which both parties can claim wins, is whether either side will be able to break the cycle and build a national consensus based on shared values.
When you think of breakthrough innovation, someone like Steve Jobs, Jeff Bezos or Elon Musk often comes to mind. Charismatic and often temperamental, people like these seem to have a knack for creating the next big thing and build great businesses on top of them. They change the world in ways that few can.
Yet what often goes unnoticed is that great entrepreneurs build their empires on the discoveries of others. Steve jobs didn’t invent the computer or the mobile phone any more than Jeff Bezos discovered e-commerce or Elon Musk dreamed up electric cars. Those things were created by scientists and engineers that came long before.
In researching my book, Mapping Innovation, I got to know many who truly helped create the future and I found them to be different than most people, but not in a way that you’d expect. While all were smart and hardworking, the most common trait among them was their quiet generosity and that can teach us a lot about how innovation really works.
On December 31st, 1929, the Indian National Congress, the foremost nationalist group on the subcontinent, issued a Declaration of Purna Swaraj, or complete independence from British rule. It also announced a campaign of civil disobedience, but no one had any idea what form it should take. That task fell to Mohandas Gandhi.
The Mahatma returned to his ashram to contemplate next steps. After his efforts to organize against the Rowlatt Act a decade earlier ended in disaster, he struggled to find a way forward. As he told a friend at the time, “I am furiously thinking day and night and I do not see a way out of the darkness.”
Finally, he decided he would march for salt, which impressed almost no one. It seemed to be an incredibly inconsequential issue, especially considering what was at stake. Yet what few realized at the time was that he had identified a keystone change that would break the logjam and the British hold on power. Today the Salt March is known as Gandhi’s greatest triumph.
The first thing we think about when we first hear the news about a major breakthrough is the great possibilities it unlocks. The space age spawned fantasies about living like the Jetsons and riding around in flying cars. That still hasn’t happened and possibly never will. Yet we’ve still benefited great from space technologies.
Satellites have truly changed the world. They have made it possible for us to communicate with each other easily, cheaply and seamlessly. News of events around the world gets beamed to us as if it happened next door. GPS satellites help us navigate unfamiliar places as if we lived there all our lives. It’s hard to imagine life without them.
In much the same way, many of today’s breakthroughs will not turn out how we think they will. The problem is that things that truly change the world always arrive out of context for the simple reason that the world hasn’t changed yet. They need to find an ecosystem that is crying out for a solution to a meaningful problem and that’s rarely the one they were built for.
Every organization strives to innovate, but few succeed consistently over time. That’s why so many once dominant companies hit a peak and then decline. A recent study estimates that 50% of the current S&P 500 will be replaced over the next ten years. Success is supposed to breed success, but it often breeds failure.
Yet IBM, Google and Amazon have been able to buck this trend. While most companies are lucky to come up with one major innovation, these three continue to develop breakthroughs and don’t seem to be slowing down any time soon. In fact, they seem to be accelerating their ability to create impressive new products and services.
However, they are very different organizations, which vary widely in their cultures, products and approaches. Each has developed in its own way and found its own path, but managed to come up with a repeatable model that works. Despite these differences, however, looking at them together can help us uncover some common principles of innovation.
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