The current pace of technological development is blurring the boundaries between the physical and digital spheres of the global market. It affects all disciplines, economies, and industries, including the way businesses and individuals innovate. However, in the messy media headlines and current social landscapes, business leaders often find it challenging to understand precisely where these technologies can create real value and successfully focus on appropriate and timely investment and policies to unlock its value.
To create a spotlight on the impact of evolving technologies on the global market and the capability of organizations to drive breakthrough growth, we have listed a few critical points on key drivers that can help achieve growth – Enterprise innovation.
Let us start with the early transitions that led to modern enterprise innovation.
The secret to the success of the first industrial revolution: Machines
Profound technological advancements are always in tandem with economic and social developments. For example, during the first industrial revolution, the diffusion of innovation and its impact went hand in hand with the emergence of mass production (such as steel, clothing, etc.) and mass consumption.
In terms of scale, this transition was epic – shifting power from muscle to machines. Laborers became learners, consumerism materialized, organizations established, and leaders emerged.
And as the transition progressed, people started focusing on inventing new tools and new ways of working. Finally, the discovery of electricity electrified the advancements, both figuratively and literally, which spearheaded the next industrial revolution.
The secret to the success of the second industrial revolution: Electricity and assembly line
During the second industrial revolution, the world witnessed rapid standardization and industrialization.
This was also when organizational methods replaced empirical work methods with approaches based on scientific research. Roles were defined, work was streamlined, machines were specialized, and economy became structured.
Advances in computers and telecommunications punctuated the complacency in the assembly lines with better compute power and global reach, thus ushering the third wave of the industrial revolution.
The secret to the success of the third industrial revolution: Digitization
During the third industrial revolution, computer and communication technologies were popularized in production processes, and machines began to reduce the need for a workforce.
The era witnessed an unprecedented rise of electronic products, from computers to new technologies that automated industrial processes.
Production became sophisticated, retailers started springing up, and entrepreneurship became widespread.
However, everything that can be done under digitization was done.
The next revolution was upon humanity.
The secret to the success of the fourth industrial revolution: AI and Automation
In the fourth industrial revolution, automation was institutionalized to an unprecedented degree to optimize increasingly complex tasks and create standards for self-configuration, self-diagnosis, and intelligent support systems.
Digital transformation, connectivity, cloud computing, data analytics, artificial intelligence, and the industrial Internet of Things (IoT) have shaped this era.
IT standards are being introduced into industrial automation, devices are smaller and smarter, and global consciousness is growing each day.
The scale and speed of Industry 4.0 make it difficult for business leaders to manifest innovation, and only a few can drive real value from it. According to BCG, 75% of companies say innovation is their highest management priority, but only 30% think they are good at it. They are either not prepared to scale the innovation or lack the resources to fill the readiness gap.
The evolution of enterprise innovation since industry 4.0
The notion of innovation and the organization’s role in promoting innovation has undergone tremendous changes in the past two decades. It is now generally recognized that innovation includes many activities beyond R&D, including non-technical innovations such as organizational change and marketing. It has made a substantial impact on the efficiency of the organization, thereby promoting its growth. Additionally, the critical interactions between the dissemination, creation, and use of knowledge among institutional participants such as companies, universities, and research institutions have a decisive influence on the design of company innovations.
Most existing empirical evidence shows that many new businesses are short-lived, have not produced sufficient long-term economic returns, and have not achieved significant growth. For example, according to HBR, 75% of CPG and retail products did not even reach $7.5 million in revenue in the first year.
The biggest challenge gripping the enterprise worldwide is business model adaption. But unfortunately, there is no coherent framework for justifying how new business ideas are converted into economic value.
The most challenging business model test was imminent during the pandemic: how to bounce back when the economy is still rolling in its torment? Consequently, the economy almost collapsed because of the lack of substantiated literature on business strategy, organization design, transaction theory, and business networks.
How to contextualize a successful business model: Recognizing innovation pitfalls
Making a turnaround requires innovation; particularly, organizations need unique and innovative ways to reel themselves back to coherence. Therefore, to pursue innovative ideas and to make them work company-wide, they need to crosscut their approaches and practices to streamline their enterprise vs. individual goals.
Here are four areas that organizations need to work on:
- Imbibe solution-oriented thinking approach
Organizations need to make their employees participate, encourage innovative ideas, and categorize ideas to allow new ways to find opportunities. Additionally, they must provide entrepreneurial support to individuals or groups and ample time for work and brainstorming, with an accompanying network of subject matter experts and mentors to provide guidance.
- Inspire actions and investments
Organizations need to look at the future – what is coming, and therefore how to do more research, bring more perspectives, and cross-skills. Identify the tangible and non-tangible investment areas and provide its workforce with additional and better tools/applications.
- Build agile teams
Organizations must find ways to achieve more with less by optimizing and automating the requirement gathering, engagement, development, and deployment processes, thus making every initiative efficient across the company.
- Challenge the status-quo
Organizations must question the traditional approach and break the rules. Challenge the conventional view of businesses, which focuses on the inseparability of the roles. Instead, take an entrepreneurial approach that implements the business in practice with a broad strategic vision and global competitive strategies and capabilities. To stay relevant, organizations must adopt an approach of continuous experimentation.
New-age enterprise innovation: Accelerating value realization to win innovation
It takes months or even years for enterprises to drive value from their innovative efforts, but a streamlined AI-/ML-driven approach reduces it to weeks, or even days. The ability to accelerate value realization is the path-breaking aspect of the new-age enterprise innovation approach.
Check out how Tredence Studio scales enterprise innovation
Ideas are often linear. Innovation is mainly non-linear.
Innovation, in contrast with the widely believed notion, is not a domino. Instead, it can be reimagined and re-purposed. For example, Silicon Valley’s economic symbol is rooted in the technological blueprint it has created. People across the world try to emulate its design. The valley is a hothouse of ambitions, software moguls, and management geniuses. Still, over 90% of the startup fails.
If you try to collate the RIP reports of startups, you will find that the risk cliff of startups is pretty high. VCs expect double-digit returns in less than five years. When they get the funds, most organizations test the resonance of their ideas, and by the time funds dry up, their journey ends. Such businesses are moonshots.
‘Failing fast’ has become a virtue.
There is also another side to the coin. Today, a few organizations rely on disruptive ideas to solve problems. For example, companies like Airbnb, Dropbox, Uber, Pinterest, and more, are disruptive, but they bleed money. When they see the value in the equation: Business Potential > Profit Margin, the investors are happy to invest. Such businesses are loonshots.
‘Failing slow’ has unforeseeable benefits.
Therefore, you need to find the ideal way to evade the friction between the promise of innovation and its vast costs between failing fast and failing slow.
For this, you need a holistic setup to scale innovation by unlocking new avenues to validate, nurture, and cultivate your ideas and then design and build solutions.
Operationalize and scale enterprise innovation with Tredence Studio
The first industrial revolution made us accustomed to new innovations (employees learned to operate machines). The second industrial revolution taught us to scale innovation (new industries emerged as demand shot up). The third industrial revolution helped us make technological progress in innovation. Finally, the fourth industrial revolution has put innovation within reach of the modern enterprise, irrespective of its size.
Therefore, you do not need to reinvent the wheel. Once you recognize the pitfalls of innovation, take corrective actions, and gear up to transform your enterprise, you can take advantage of the developments that happened/are happening in industry 4.0. Start by classifying your business into moonshots and loonshots. Then, tap into the industry knowledge base to develop specific use cases and leverage AI/ML solutions.
Tredence Studio provides a series of ready-to-deploy AI solutions that enable businesses to drive enterprise innovation at scale. In addition, you can use these accelerators to prepare for upcoming challenges and effectively deal with future interruptions.