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Innovation is being sought in all corners of the economy, and technology is seen as the way forward. Manufacturers now track, in real time, how their products are being used — and download upgrades to everything from stereo speakers to cars. We’ve seen augmented reality provide data-driven layers of visualization to product selections, and algorithms set the tones of conversations with customers.
Executives are buying into the potential of technology-driven innovation, but are still fumbling when it comes to making it happen, according to a recent survey of 500 executives by Ernst & Young. Cloud computing and the internet of things (IoT) ride high as innovation initiatives, now in place at 81 percent and 45 percent of enterprises, respectively. Executives are also putting more credence in artificial intelligence (AI). Nearly one-quarter of respondents, 24 percent, believe that AI will have the greatest positive impact on the future growth of their company in the next five years, followed by machine learning (23 percent).
In addition, leveraging data for business insights and developing new products and services are top innovation priorities. Close to half of respondents, 46 percent, say that their companies are refining hiring practices to attract talent with diverse, future-focused skill sets.
Technology-driven innovation is a long and winding road. While half of the executives say their organizations spend more than five percent of their annual budget on innovative initiatives, 42 percent say their budgets don’t go far enough. Factors that can also derail innovation efforts include market volatility that can be a distraction, as well as fears of being outpaced by competitors.
Yet, they shouldn’t fall for the idea that throwing more money and technology into the mix will suddenly increase their levels of innovation. If anything, the survey reveals an ongoing disconnect between organizations’ investments in innovation and their ability to integrate the results of those new technologies and capabilities into their businesses. The survey’s authors call this “trapped assets,” where investments aren’t being used effectively across siloes to realize their full potential. Executives may feel they need to increase budgets to drive more innovation in their organizations, “but unless they are also prepared to transform their businesses to fully reap the benefits of those new ideas, it will be like pouring more water into a leaky bucket,” according to the survey’s authors.
What does it take to evolve toward a more innovative corporate culture? Three-fourths of executives say they believe they’re making their organizations have exceeded their expectations on innovation, compared to competitors. Plus, at least 79 percent say their organizations are tolerant of failure. This is an encouraging piece of data, but somehow I’m skeptical this reported level actually translates into day-to-day tolerance in typical organizations. Tellingly, only 25 percent of entry-level employees believe this is the case.
To further engage employees in innovation, respondents report that their companies provide incentives for innovative accomplishments (44 percent), support for external workshops or training (43 percent) and offer special innovation-focused events, such as hackathons (42 percent).
In addition, to speed up the path to technology-inspired innovation, the EY authors recommend executives “focus on a minimum viable product to get innovations into the field quickly to see if they work”; and to “pulse clients and customers frequently to see if a product or service is performing for key stakeholders.” They also recommend that executives “fail forward and course correct quickly to get to the right approach.”
Here are some ways technologies are driving business innovation, as compiled by the Forbes Technology Council:
- Practical augmented reality: “With microdisplays becoming reasonably priced, we will see personal wearables becoming available to the masses.”
- Generative adversarial networks: “A new type of neural network that is semi-supervised and enables companies to learn more from less labeled data.”
- Real-time language translation: “Allow single-language speakers to have real-time conversations.”
- Chatbots: “Just a great way to cover tech support and service questions.”
- AI in mobile apps: “AI, particularly in mobile devices, has transformed the user experience in the last few years as cognitive services have advanced exponentially.”
- Inexpensive, fast storage: “Without the modern, low-cost solid-state drive (SSD), VR and AI would still be inaccessible to most businesses.”
- Deep learning-based predictive analytics: “The ability of a computer to learn by just analyzing data without having to let the algorithm know what variables are important is unprecedented.”
- Serverless computing: “Makes launching applications cheaper and faster by letting companies focus on the customer value without having to worry about deployment and scaling.”
- AI and machine learning applications: “Whether it is modeling data, analyzing speech or driving a car, we are starting to see real-world applications of these technologies.”
- The cloud: The cloud offers a unique and flexible option for businesses to make sure they will be able to concentrate on business execution.”
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