Directors who focus on developing a sustainable innovation strategy are more likely to secure long-term gains. What are the key components of this approach?
Digital transformation is a continuous process weaving its way through every part of an organisation. When it is executed well, it leads to innovation becoming part of an organisationâs DNA, and being able to face off competition in todayâs crowded marketplace. As the gains become more substantial and the costs of delaying mount, the question for many directors is simply where to begin.
An essential first step is to create a digital roadmap, says Diane Smith-Gander AO FAICD, chair of ZipCo, Safe Work Australia and CEDA, and non-executive director of AGL Energy and HBF Health. It ought to provide a clear-eyed assessment of what the current state looks like and where you need to be. A useful roadmap defines business goals, identifies priorities and sets out a process for managing and reviewing progress along the way.
âIf youâve got a roadmap with a set of tools that youâre going to deploy, then youâve got a path to innovation,â says Smith-Gander.
Hungry for change
Technology has become so central to doing business that failing to be on the front foot will almost certainly diminish an organisationâs ability to innovate. And in todayâs world, innovation and digital go hand-in-hand, says Wendy Stops GAICD, a non-executive director at Coles, Blackmores Group and not-for-profit organisation Fitted for Work.
âTechnology is not something to be afraid of, itâs actually part of our DNA now and itâs in everything we do,â she tells Directors on Digital. âWe have to be able to embrace it and find ways to move forward.â
Fortunately, whether it is a small NFP such as Fitted for Work or a large retailer like Foxtel, directors in Australia are hungry to develop new strategies that focus on furthering innovation.
Make innovation non-negotiable
Of everything that start-ups, scale-ups and other young companies can teach incumbents about digital maturity, Smith-Gander and Stops say that their approach to innovation contains the most important lesson of all.
âWalking into Zip Co on day one was a very different experience to walking into the offices of any other board that Iâve ever been on,â says Smith-Gander. âIt hasnât built any legacy around itself. Innovation is just the way business is done. The company expects it to happen, and customers expect it to happen.â
Stops agrees that this no-alternatives approach to innovation is the best way forward, and says that COVID-19 gave us a crash course in how to do it. âIt was a classic example of how organisations who had said, âWell, it will take us six months because of this or thatâ all of a sudden found out, âWell, actually, we can do it in a month â because we have toâ.â
Adopting a maturity model
The take-up of cloud-based services illustrates how quickly businesses are changing, says Omar Abbosh, corporate vice president of Cross-Industry Solutions at Microsoft. âToday, about 20 per cent of businessesâ technologies are in the cloud and weâre probably going to go to 80 per cent in a five-year period, which is a drastic increase of uptake.â
He notes some organisations are adopting what is known as a âmaturity modelâ to measure their ability to achieve continuous improvement within a digital transformation. âThere are many models out there,â says Abbosh. âBut in the modern world of digital technology, the best practices are not necessarily coming from within your own industry. So, looking across industry becomes important. Make sure that youâre not limiting your maturity model more than it should be by looking through a narrow set of industries.â
AICDâS New digital directors webinar series
The AICD will soon launch a new Digital Directors 10-part webinar series designed to enhance the digital literacy and capabilities of Australian directors.
Webinar participants will learn practical skills from digital specialists and directors experienced in digital governance. The series will cover emerging digital topics, including:
- Cybersecurity
- Changing business models
- Digital decision-making frameworks
Get more information on AICD webinars.
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