Digital transformation: 3 ways a culture of innovation can drive your strategy

Want to jump-start your digital transformation initiative? Focus on the human element and foster a culture of innovation. Here's how
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Most companies understand the imperative to undergo a digital transformation. The most forward-thinking go beyond merely modernizing their operations and processes to introduce efficiencies and accelerate or even invent new responses to ever-dynamic signals from customers and competitors.

Completing a large-scale operational and cultural makeover leveraging technology is crucial. Customers in most industries and sectors increasingly expect products and services delivered ever more rapidly, cheaply, and seamlessly in ways they desire and on-demand. Customers will readily replace businesses that fail to adapt to their dynamic needs with those that are more adept in this effort.

Still, many companies struggle through the transformation process itself. Why? Because often the focus is exclusively on technology; companies often overlook or neglect the human aspects of transformation – from employees to customers. Additionally, the blueprints for a 12- to 24-month rollout can often be rendered obsolete by the ever-increasing speed of change in the marketplace.

[ Also read: Digital transformation: 5 tips to help your team thrive amidst change. ]

To enhance the potential for succeeding in a strategic digital transformation, start by fostering a culture of innovation in its people, regardless of where they sit in the organization. Why culture? As Peter Drucker famously proclaimed, “Culture eats strategy for breakfast.” It’s an important component to ensure long-lasting success that is increasingly needed to provide the organizational flexibility and agility to meet a dynamic environment that accelerates daily.

Here are three considerations for instilling a culture of innovation to drive a meaningful digital transformation.

1. Align a culture of innovation to a clear vision and process

A culture of innovation created in a vacuum won’t succeed. Articulate a clear vision behind your initiative to develop a culture of innovation. Ideally, this vision comes alive through an emotional connection that the initiative underscores.

Furthermore, communicate the “why” of the initiative before laying out the “how” – the time, investments, and steps required to develop it. People connect to the why – they are less excited by the tactics or the how.

Articulate a clear vision behind your initiative to develop a culture of innovation. Ideally, this vision comes alive through an emotional connection that the initiative underscores.

There are many tactics that can be used to achieve an initiative and often great debates on which ones to choose. But why the initiative is happening should be clear and have much less variability than how. The initiative’s objectives must explain what is being attempted and why, posing relevant questions about strategy, process, technology, operations, culture, etc. Finally, the initiative must have clear outcomes or results that measure progress.

2. Understand that innovation can be incremental as well as monumental

Digital transformation takes time and often combines a series of small steps that lead to large gains, as well as a few well-placed larger “leaps.” Small steps are important to recognize and celebrate as they keep momentum and morale high. Remember, culture is a concept that involves human beings. It needs to connect. Running a marathon begins with shorter training runs, not trying to run 26 miles all at once. Small steps build confidence for the big leaps and create organizational endurance to achieve the big wins.

Simultaneously, teams can work on long-term projects to achieve big-picture advances. These efforts involve more trial and error as they often proceed without a clear roadmap. Along this journey, demonstrate to employees that failure isn’t an option; it’s a necessity. Big leaps require missing the mark along the way. It’s part of what makes achieving them so exhilarating.

Similarly, remember that even the best-laid plans sometimes fail. As a leader, you must be able to recognize missteps, learn from the experience, and start over. A rapidly changing world requires adaptability and flexibility.

As an example, much of the world over the last couple of years went almost entirely remote in a matter of weeks. Be willing to tear up the blueprint and rethink tactics or direction when circumstances warrant – and ideally have backup plans in place for contingencies.

3. Embed an innovation mindset across the organization so innovation can happen with anyone, anywhere, at any time

It’s ineffective to just tell people to “go be more innovative” – it’s too undefined. Providing a common language and some methodologies can go a long way to unlocking innovation.

We recommend training employees at all levels on design thinking – and other techniques, such as agile and storytelling – to build business efficiencies and improve problem-solving capabilities.

Design thinking involves a non-hierarchical, collaborative set of methods that allows you to evaluate and solve problems by incorporating many different perspectives – its very nature promotes inclusion and the ability for all involved to participate equally and share their thoughts. This thinking increases the chances of uncovering good ideas, as the process involves the entire organization in the search. The innovation mindset mentality never says “That won’t work” but instead asks “How might we do this?”

The innovation mindset mentality never says "That won't work" but instead asks "How might we do this?"

To get a culture of innovation to stick, set expectations and build a program that enables and supports those who want to innovate. Also, recognize and applaud attempts – and failures – to encourage more people to try. To support this process, give employees time and space to think about innovation as well as “safe spaces” to express their ideas and creativity.

If innovation is an expectation consistently reinforced across the organization, it will start happening. The company that restricts innovation to a small R&D team tucked away out of sight will limit the results and slow any progress.

To embed an innovation mindset, build an innovation program, complete with training, recognition and rewards, dedicated staff, and technology to provide tools and techniques. In addition, showcase your innovative advances internally and externally to generate enthusiasm and support for the effort.

Digital transformation covers more than just technology. Simply automating or “digitizing” a flawed process defeats the purpose of making a company-wide transformation. Again, it’s essential to understand and clarify the transformation’s objectives from the start. Technology will play an important part when it’s time to implement the effort, but it’s not the only part.

Instilling a culture of innovation enables the digital transformation to become an enduring and empowering feature of the organization, continuously improving operations and processes, while boosting your company’s presence among customers and competitors.

What’s more, innovative cultures ultimately help businesses create the products and services their clients and customers will demand today and tomorrow. Innovation-fostering cultures equip organizations with the tools they’ll need to understand and stay ahead of evolving customer needs.

[Where is your team's digital transformation work stalling? Get the eBook: What's slowing down your Digital Transformation? 8 questions to ask.]

Cory Gunderson is executive vice president of global solutions at Protiviti. He oversees and coordinates the firm’s range of consulting practices, including internal audit and financial advisory, digital transformation, technology consulting, risk and compliance, business performance improvement, managed business services, and data management and advanced analytics.