It’s a given, most CEO’s want to transform their organizations, and they know they need innovation to get them there. What is changing, is that the transformations needed are not just from the scientific methods of the past, but by building corporate cultures of innovation; ones that empower employee creativity to solve the right problems.
To give you a sense of how important innovation and transformation is take a look at the title of KPMG’s 2016 Global CEO survey, Now Or Never. The executive summary delivers a clear message, sharing “Two-thirds of chief executive officers (CEOs) believe that the next three years will be more critical than the last fifty years. The forces creating this inflection point are the rapidly evolving technology and the speed of transformation it unleashes. In four years’ time 4 out of 10 CEOs expect to be running significantly transformed companies.”
A number of global surveys of CEOs and C-level executives between 2015 to 2017, including major studies conducted by KPMG, Fortune, IBM, and PwC provide further insight:
– Fostering innovation is one of their top strategic priorities, placing among the top six in every survey.
– Most CEOs are grappling with how to engage their cultures in the change necessary to be more innovative.
– A significant majority of 7 out of 10 CEOs say it’s important to specifically include innovation in their business strategies.
– The majority of survey respondents identify the need for transformational change in their organizations.
– 8 out of 10 are concerned that their existing products and services may not be relevant in 3 to 5 years’ time.
– The majority of respondents say their organizations are struggling with the speed of technological innovation.
And Gartner reports that 89% of companies believe customer experience will be their primary basis for competition in 2016, versus 36% four years ago.
What is equally telling is that while innovation is consistently among the top six strategic priorities, less than a third of the CEO’s believe their organizations’ cultures encourage risk-taking or safe-to-fail environments. These challenges are clearly defined in the KPMG report of findings:
– 36% of CEOs say their organization’s approach to innovation is either ad hoc, reactive or occurs on a silo basis.
– Only 1 out of 4 say that innovation is embedded in everything they do.
– Only 29% feel that their organization is highly capable of creating a safe-to-fail environment.
Enter design thinking at scale to solve the right problems
In the pursuit of technology-based innovation we have created complex organizations, all adding to the complexity of the solutions. A plethora of new products and services that really aren’t very relevant, like the new Apple iPhone X, adds fuel to the fire of chasing short-term profits. But this is all just adding complexity to our lives, and not really solving the real problems we face as humans.
Going forward, I think the companies that succeed will be those that embrace what the iconic designer Dieter Rams pointed out many years ago, the need to design “Less, but better.”
My projection is that the traditional scientific methods of innovation will continue to fail us. To truly create less but better innovation, and organization transformation, companies need to determine the right problems to solve, and use the collective imagination of their employees to solve them, with an eye on customer experience and human-centered design. This is why design thinking is absolutely so relevant today.
Read a full chapter about this in my new book with Edgar Papke, Innovation by Design. Take a peek here.