The Cultural Transformation Challenge

Recently at the Corporate Innovation Summit, our Managing Director, EMEA, Carolina Wosiack, led a discussion on digital transformation and culture. Digital transformation sometimes means overhauling an organisation's structure, yet not enough time is spent on navigating the organisational changes from a people perspective. Below are three ideas from the discussion to inform transformation in your organisation.

1. Clear Vision and Common Identity

If you are to embark upon a transformation journey, the first step is to have a clear vision for your organisation. It helps move people, processes, products and platforms forward. When values are clearly defined, it creates both purpose and direction for employees. One of the most difficult aspects of disrupting the status quo is ambiguity. While there is no quick fix, a clear mandate and company goal is unifying and provides a sense of purpose to the work being done.
 
Cultural transformation must consider existing corporate values but a perspective on where growth objectives can be added. Especially in multinational corporations, having clear companywide objectives that align with local markets is essential.

2. Strong Leadership

Clear corporate goals need strong leadership, with the know how for successful execution.  A key feature of a successful leader is ambidexterity which is the ability of the organisation to reallocate assets and capabilities to address new threats and opportunities. Leaders must balance the corporation's base business activities with innovation, dedicating time and resources to each, making sure they are not competitive. Practically speaking, this means that leaders within the organisation are able to make the difficult choices required to reconfigure assets to promote exploratory ventures that both track to clear objectives and identity of the corporation. 

3. Iteration

With innovation initiatives, leaders should consider a portfolio approach to best balance business as usual and growth initiatives. Creating horizons of innovation where the initiatives are divided allows the organisation to maintain base business while incrementally innovating beyond reaching new customers or markets generating new organisational capabilities. Below are the suggested horizons.

• Horizon 1: Continuous innovation in a company’s already established business model and corporate capabilities in the short term
• Horizon 2: Extend a company’s current business model and organisational capabilities to new customers, markets, or targets
• Horizon 3: Create new capabilities and business streams to generate competitive advantage, respond to opportunities, or to counter disruption from challengers in the market

In tangent, more flexible transformation is best underpinned by an ‘agile methodology’ - a system for managing large tasks by breaking them into shorter phases. Once a phase begins, the leaders plan their work, execute it, and then evaluate their progress before they move on to the next stage of the task allowing for continuous improvement throughout the entire project and gives room to pivot or alter the work should the need arise.

By using a set of methods, it enables teams to learn and adapt quickly, your company can begin to undergo sustainable, scalable digital transformation that helps you prepare for the most sudden industry developments.

It does not matter which horizon of innovation your product or project fits. The execution should be agile, bearing in mind that each horizon requires different management, tools, focus and goals. Companies should allocate capital across all three horizons.

While this is just the beginning, it is a starting point to building an innovative culture, align innovation with corporate strategy, assign accountability, and have adequate resources to achieve goals and objectives. The real challenge is not to test and learn, but to make innovation repeatable and scalable.