As a Program Executive within the Innovation and Transformation CoE (ITC) at Salesforce, I have the good fortune of working with some great companies that not only want to be a leader in their current market(s), but they also want to continually redefine their company — as well as get into new markets entirely. They understand that the landscape around them is constantly changing and long gone are the days where your competitors today will be your competitors tomorrow. In today's age of increasing customer expectations, where technology is making it easier for new players to totally disrupt an entire market, great companies have to do revolutionary, not evolutionary, things if they want to stay on top.
When we meet with executives, they and their teams are always excited to talk about innovation. They've heard their customers' needs and each has a great personal experience with top brands that have inspired them to create the new and improved vision of their company. The first discussions and workshops are creative and inspirational. Everyone is enthusiastic about these new ideas that will build closer relationships with customers while increasing their revenues.
However, once we get past the idea phase, it's an eye-opening experience when we have the discussions around the client's foundational capabilities to go from ideas to roadmap and execution. In many cases, while the enthusiasm to innovate and make an impact for the company is there, the mindset, resources, and finances are only structured to maintain the status quo. In these instances, we work with our clients to better understand their current situation and how to adjust it accordingly in order to set them up for success.
When we have discussions around moving forward on some of the great ideas that come out of our efforts, we look to understand the mindset the company has around innovation. Do they have the right frame of mind in place in order to execute their ideas? Are they allowed to fail? Not every idea ends in success. Do they know how to scale when they succeed or how to fail fast if they do not? Are people that participate in innovation punished if they're not contributing to the status quo numbers in their annual reviews? Will the company stop any innovation at the first sign of a tepid fiscal quarter? Are they willing to re-educate their workforce to learn new technologies or processes and is their workforce accepting of some of their roles changing and evolving over time? Is their board of directors aware of how innovation ties into their company strategy?
The key is to help the client understand their current mindset so they can either accept it or change it in order to give themselves a chance to successfully innovate or transform their company. A client limited by the mindset that's only established to maintain the status quo will rarely be successful in their attempts to innovate.
In regards to resources, we have discussions around how our clients currently allocate resources and if they are prepared to execute. It is always a privilege to meet so many smart and experienced people when we start doing discovery with our clients. Many have been in the company or industry for years and are full of great ideas. They KNOW where they should be and what is possible.
However, when we ask what has stopped them from moving forward, the majority of answers tie back to the overwhelming responsibility of keeping current status quo up and running as opposed to creating the next amazing thing that will lead to greater success. Are executives prepared to assign the right managers and subject matter experts to their efforts? If all of their top people are working on maintaining the status quo applications or keeping applications up to date with the latest browsers and operating systems, how will they have time to make their innovations a reality? How is the company managing their workforce? If there has been a history of headcount reductions, their top talent may not be willing to risk being assigned to an application or business unit that is considered a risky endeavor towards the future as opposed to the current cash cow areas of the company. Does the company provide employees the time and resources required to learn new technologies or stay educated on new market/industry trends? Unless a company assigns the right resources and gives them the permission and runway to take risks, there is no chance of successfully executing on innovation.
Finally, does the company have the right funding models in place to successfully innovate? Many companies' current business case processes kill any innovative projects before they even start. Traditional funding models are major barriers to a client's digital transformation. They result in siloed and duplicative investments, drastically limited flexibility, and impose increased operational risk. Most are set up for specific waterfall projects where they force a group to say, “We're going to do exactly this. It's going to be done at exactly this date. And it's going to bring in exactly this more revenue or exactly this decrease in costs.”
In my 20-plus years in multiple industries, I have never seen the end result of a project done in this manner match up to what was presented in the original business case. Companies need to reevaluate their funding models just as much as they do their technology and business processes if they wish to successfully navigate through a digital transformation. Is the company open to different funding models that allow for innovation and transformation? Does the CFO understand the impact of utilizing SAAS and cloud services on Operating Expenses vs Capital Expenses AND are they open to seeing the shift, knowing that the positive overall financial impact to the company and its ability to compete and thrive? A company must have a financial plan and funding model in place to support their innovation efforts. Without it, a company will struggle to justify, much less start, any innovation under traditional models.
In summary, having great ideas and unbridled enthusiasm is just the beginning of innovation. If your company does not have the mindset, resource allocation, and funding models in place to execute on these ideas, your chances for success decrease exponentially. As my colleagues from the Innovation and Transformation Center said in this Outcomes-Based Thinking ebook: It’s one thing to talk about transformation, innovation, and disruption, but it’s something else to know how to bring those buzzwords to life.
And when your competitors or new disruptors to your market pass you by and threaten your business, chances are you'll be able to say, “We had that idea!” but it won't matter because you never set yourself up to successfully execute on innovation.