”Do not diminish the importance of innovation within organizations”- Heard it before? I can only imagine, yes.

The digital transformation affects pretty much everything today. Which among other things puts pressure on having an innovation culture and innovative processes within organizations. Why? This type of change affects organizations in many ways and one of the primary ones are the product life cycles whether it’s products or services. The life cycles are shortened because of the rapidly speed of change which may result in fluctuations on the demand. How to deal with this kind of change? Culture is an important factor. Whether you heard “the importance of innovation” before or not, surveys and data show that it is more important than ever to remain innovative as a company to remain profitable and grow from both a short term and long term perspective. Why?

Let’s do a quick and not completely scientific recap of the history of digital change:

• Today, we consume more information in one month than our ancestors did for a lifetime. No wonder we feel stressed or tired sometimes. Has the human evolution and brain developed at the same pace as the technology we’re using on a daily basis? (I leave this to minimize the risk of being too philosophical)

• Let’s fast-forward a few years from when our ancestors lived, in 1943 the Chairman of IBM Thomas Watson said that he believes that there is a world market for five computers. Just last year, in 2015, 1.4 billion smartphones were sold. (Statista)

• 1949 a magazine called Popular Mechanics wrote ”in the future a computer does not need to weigh more than 1.5 tons”. Imagine being able to go back in time and give them a smartphone.

• A few years later, in 1996 Ines Uusman was misquoted ”internet is a passing thing”. 1997 Google was registered which would come to revolutionize internet.

• January 9, 2007, Steve Jobs held up the first iPhone 3 and that phone model would be the start of the so called Mobile Revolution. The mobile revolution has definitely created new kind of fears for our generation in comparison to our ancestors, for example low battery warning, buffering, no 4G or wifi.

• In 2010, the social revolution began with Facebook in the lead among other companies, tools and services.

• Today? What are people talking about today? I hear and read about a number of exciting things every day and some of them are cognitive computing, autonomous vehicles, speech to speech translation, VR, brain computer interfaces, smart dust, bioacoustics sensing, affective computing and the list of things continuous. Things our ancestors could not even dream about.

What is the point I’m trying to make and thesis in all this? What has the digital transformation, change and the recap in history to do with the importance of innovation within organizations? In many ways, everything. I’ll try to explain how in such a pedagogical way as possible.

Imagine an innovation curve with “Innovation” on the Y-axis and “Time” on the X-axis. Then try to plot the data/information obtained from the recap in history so it becomes an ”Innovation Graph”- Innovation vs Time. The plotted line would (very much simplified and not scientific of course) be an exponential curve over time. Then, try to draw a mentally tangent for this curve for the last 20 years, it’s a very steep tangent. Than compare this tangent with one drawn approximately 1000 years ago, it’s not very steep. Furthermore, if it was a big difference between these two tangents it’s probably nothing compared to what the tangent will be in the next 20 years compared to now. Interestingly, I think!

Innovation Graph by Edward Ringborg

To put this into perspective, Graeme Woods has a great quote ”change has never happened this fast before, and it will never be this slow again”. For me it creates thousands of thoughts at once and especially whether or not this exponential development can and will continue.

I gave lecture two weeks ago at the Stockholm School of Science and Innovation and asked the audience, how many years do you think it took for the fixed telephone to reach 50 million users? Shortly afterwards I asked the same question but this time for Pokemon Go. The answer is 75 years and 19 days! Another fun fact on this topic is that 90 percent of the world’s data were created the last two years (Science Daily). Once again, change will probably never be this slow again.

(Hang in there, I’ll try to wrap this up )

How is this affecting companies? This affects company’s product/service life cycles. I will simplify, when I studied the majority of my literature seemed to stress the importance of an entrepreneurship culture in the early stages of companies, products and services. Then, shifting to a much more of a governance culture for the remainder and majority of the life cycle. This does not longer work when the life cycle becomes much shorter due to the rapid change. I read that Pokemon Go is already decreasing in users. This puts high pressure on the companies to remain innovative so that their products and services either develops continuously to make them “live” longer or to continuously create new services and products. This is obviously not the whole truth but to create a prosperous and continuously developed portfolio of products and services is critical in my opinion to have well functional innovative mind-set.

Furthermore, another example to try to clarify what I’m trying to say is from excerpts from interesting studies regarding the Fortune 1000 List. Between 1973 and 1983, 35 percent of all companies on this list was replaced by new and up-coming companies. During the next 10 years, 70% of these companies will be replaced by new companies. (Forbes)

There are many ways and perspectives to observe and measure the speed of how quickly change occurs over time, and I know, this is not a scientific point of view, rather my own “hobby” analysis and observations. We come from different paradigms so we’re influenced by various factors. An interesting point of view in all this is why the corporate culture is so important when it comes to innovation related to companies. Call it intrapreneurship, entrepreneurship, innovation culture, it does not matter. It must be created and enforced in a true Rockstar Culture. Many would then argue that all this depends on which company you’re representing. Is it a young company? Old company? The size of the company? Service related company? Product related company? Industry? Nevertheless, my humble opinion is that it’s just as important in any company, but important to stress, there are different levels of difficulty and ways to succeed with innovation depending on the company and parameters mentioned above. Also, there are many ways to create, process, execute innovation within a company, therefore taking these parameters into consideration and elaborate how to align an innovative mind-set to assure business value are generated in the short and long term perspective.

So to conclude, sometimes I ask my co-workers what are we going to make money on in one year and in five years’ time? Why? Because it’ll probably not be the same as today. Change is happening so fast, demand is shifting rapidly, product life cycles are affected and therefore an innovative culture to find new ways of earning money is crucial. The thing is also, my own opinion, is that it’s important to start now because when the shifting occurs it will probably be to late or at least the damage will be much bigger if you haven’t come up with ”a replacer” to your cash cow or developed cash cow 3.0.

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You may not agree with everything I’m trying to say and this text is probably most for my own sake, to get my thoughts straight because these things are tough and we are working with these matters ourselves. What are your thoughts on innovation in organizations? Tips on exercises and frameworks for working with this are much appreciated!

A digital workplace enables an innovative culture! If your interested see Digital Workplace Summit.

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