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Building A Culture of Innovation: Start with People Supported by Digital Transformation
(3 minute read)
Steve Niesman is a member of the Forbes Business Council. This article was first published on Forbes.com on May 4, 2022. Here is a link to the original article.
When talking with companies about digitally transforming their business, I like to start with a simple framework based on the concept of P.R.I.C.E. In this instance, P.R.I.C.E. refers to five areas of focus that are necessary for growth:
P: People. Create truly dynamic, engaging and employee-centered experiences to attract and retain talent (hire to retire). This includes access to opportunities and leading with empathy.
R: Revenue. Drive revenue, profit, and volume. Expand sales channels and improve customer engagement.
I: Innovation. Create business value with new technologies (RPA, machine learning, AI, advanced analytics).
C: Cost. Reduce business waste, optimize inputs, improve enterprise planning, and automate processes.
E: Experience. Personalize and simplify the user experience for employees and customers, on any device.
These five areas encompass both the challenges and the rewards for any leadership role, as well as the entire business. They’re what keep us up at night. They’re also the fun puzzle that never ends because the technology involved keeps changing faster and faster. From a digital transformation perspective, the goal is to use technology to equip your people with the tools and information they need to make the best decisions for your business.
This article is the first of a series to help give a framework for the digital transformation and innovation culture that will ultimately build tomorrow’s top-ranked companies.
Let’s Start with People
Author Elvin Turner says that sustainable innovation requires a framework of leadership, process, capabilities, resourcing, and culture. Ongoing success in any organization takes all of these things working together, especially when the status quo is easier. So how do you equip your people to deliver innovation and create the environment that nurtures their efforts?
It’s important to get this right since most transformations fail for reasons related to people and culture, according to McKinsey. Success depends on building more efficient and resilient organizations by creating cross-functional teams with specific goals and value propositions designed to attract and retain the right talent.
When it comes to identifying which needles are the right ones to move, let’s first take a look at one of the major concerns of workers who have left jobs recently or might in the next three to six months, according to McKinsey: meaningful work. If you start by caring about the health, safety, and future of your employees, then the investments you need to focus on become more obvious. Certainly, compensation and benefits are a part of that package, but so is access to resources.
Two important goals that can have long-term effects are automation and something I like to call augmented intelligence. If you automate the more mundane tasks of any given role, people can focus on more rewarding goals that also translate into more engagement and profitability. Augmented intelligence means sharing data and resources across work groups so that any given person has the information they need at the moment they need it. With those two things in place, people have the tools to make a difference. Everybody wins.
But you can’t get there overnight. Digital transformation has to happen in stages because you’re aiming for the following milestones:
- Modernizing HR systems to manage your total workforce (FTE, contingent workers, remote)
- Developing your workforce and measuring outcomes
- Aligning employees to strategic goals
- Effectively compensating and rewarding employees
- Supporting organizational change management across the organization
- Keeping current with regulatory compliance and data protection
- Keeping track of all key HR information in line with country-specific requirements
- Providing self-service tools for employees to manage their areas of the business
Hitting these milestones starts with your IT, HR, and finance teams. Then, you will expand to the rest of your organization, creating a culture that empowers employees to make decisions and solve problems, as well as collaborate with others who may or may not be in their work group. Technology is meant to be the tool to support those efforts and remove roadblocks. It goes hand in hand with culture, because when you invest in technology, you’re actually investing in both your people and your capabilities. Technology can only deliver a return on investment if it provides the right tools and data across your entire organization, in real time.
You know you’re getting somewhere when innovations happen without being driven by leadership, across different functions and on an ongoing basis. Innovation is a set of ongoing actions driven by culture, not a static idea or one-time investment. That’s what makes it sustainable—when innovation becomes inevitable because the people in your organization have the culture and the tools they need to perpetuate it. That in turn helps you attract and keep your best talent because there is room to contribute in a meaningful way, grow within any given role and serve the business at the same time.
In the next installment of this series, we’ll look at revenue.