Innovation means going way out of the comfort zone

Companies will go out of business if they focus only on horizon 'one'.

Lanny Cohen, Global CTO and a member of the Group Executive Committee at Capgemini, explained during the launch of the Capgemini Applied Innovation Exchange (AIE) in Singapore last month that a lot of companies today are focusing on the immediate horizon of their business - current operations, trying to modernise, protect, and secure those.

Cohen said: "Most business left to their own devices will focus on horizon one activities. The monthly forecast, quarterly results are the most important things."

However, transformation is most effective beyond this first horizon, or horizon one. It is on horizon two or three "where the new is occurring", he said. "This is where disruption is happening. Somebody is looking at a market today and how they can change the game and looking at the new."

Tan shares Singapore Power's journey on digital innovation at the Capgemini Applied Innovation Exchange launch.

Samuel Tan, Chief Digital Officer, Singapore Power said that no one is safe from digital disruption. Speaking at the launch of the Capgemini's Applied Innovation Exchange last month, he said, "Better, faster, cheaper is not good enough. Even the utility industry can be disrupted."

Tan said there is no choice about digital transformation when an online book store (Amazon) can innovate more quickly than a traditional establishment and buy large organisations in other industries. "You have got to think about how to disrupt your own business. If a utility can be disrupted, which industry cannot be disrupted?" he asked.

According to Tan, key challenges for innovation at established companies include changing the mindset, internal processes, metrics, and environments.

On a visit to Israel, Tan was impressed by the Israelis' ambition and a sense of urgency to get things done. "To win you have to get started; to win, you have to try to finish," he said.

He also stressed that the need for flexibility as the definition of innovation inherently means not knowing what internal processes might be needed, nor metrics. "If you can write the tender specifications you don't have to innovate because you know exactly what you want," he said.

 With metrics, programming in the sales target from the beginning can lead to struggles later on, he added. "The adoption rate, penetrative rate are important metrics, not just the financial metrics," he said.

Environment-wise Tan noted that partnerships can be successful. "Some companies do it all by themselves. I think we can do it with others. A space like this allows collaboration with others," he said.

Kundu speaking about turning a 150-year-old institution into a nimble organisation that can innovate digitally.

Shameek Kundu, Chief Data and Innovation Officer, Standard Chartered Bank, noted at the same launch event that life is tough for banks, which are typically considered slow to change.

"People want to have absolutely nothing to do with a bank, it's a place to keep my money, borrow money, and ability to transact on a day to day basis, I really do not want to see my bank," he said, explaining that the prevailing attitudes make it difficult for a bank to offer more customer value.

"A whole lot of people across a business such as ours are thinking about innovation. What they need is a platform that gives them the ability to do what they want to do," he said. Capgemini's Applied Innovation Exchange, with its accelerator, will allow companies to test ideas quickly, he noted.

Kundu also noted that the bank is setting aside a small investment for horizon two, rather than spending it all on horizon one. "We're letting businesses who want to innovate to go forward," he said, explaining that some lines of business within the bank are more than ready to adopt new technologies today. 

"Ultimately the innovation can must and will come from the people around us. You can't do it from the top," he said. "The person who runs the (department) is the Chief Innovation Officer for that business."

On the micro perspective, Cohen warned that companies cannot rest on their laurels after discovering new technologies that can benefit them. "Don't automatically assume that it'll scale. There's much more to that," he said.

Cohen noted that the bulk of the work starts after discovering innovative technology, from business case development to roadmap development to ensure that the technology scales in the real world. "Be realistic in how you tackle those barriers that prevent (scaling) from happening," he said. "To me it all starts with the mindset. If it's not there it's going to be a long road ahead."

Interested?

Read a 2009 McKinsey article on the three horizons of growth

Read the TechTrade Asia blog post about the launch of the Capgemini Applied Innovation Exchange

Hashtag: #appliedinnovation

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