Innovation is a concept often tossed around in business strategy as an instrument of change. The era of the “data economy” is well and truly upon us, meaning that companies must be more agile than ever before. Adapting to change requires constant innovation across all industry verticals, and there’s no better Petri dish for innovation than the booming technology sector.
What lessons can the rest of the world learn from America’s technology heartland? First, let’s take a look at the current landscape.
Why tech companies?
Change management and innovation have been interwoven into the cultural fabric of Silicon Valley for years. The recent leaps forward in software development, computing and consumer electronics have led industry titans to classify the current time period as one of the most innovative on record. Google’s Sergey Brin called the last few years a “technology renaissance” in a 2017 letter to investors, adding that we’re in the midst of “an exciting time where we can see applications across nearly every segment of modern society.”
Technology companies also face considerable external pressure to adjust their product offering to account for market fluctuations. Cutting costs and driving innovation is one of the only feasible strategies in order to respond to the market while remaining competitive.
In an interview with Forbes, Oracle CEO Mark Hurd echoed that theme when he said, “I know only a few ways to take market share and drive new revenue. I can engineer better products and services, I can build better relationships with my customers and deliver a higher level of service, or I can give my customers a lower price.”
He went on to say, “Aligning technology strategy to better service customers becomes an essential path to revenue growth.” That underlying theme is echoed by many other companies in Silicon Valley, who understand that customers are looking for better technology, improved user experience and increased value for money.
The current state of technology can tell us a lot about how effective innovation strategy can drive consumer (and employee) engagement. While the road isn’t a straight line, there are a few key takeaways to earmark for your strategy.
Establish change leaders
Planning and implementing a company-wide change is a herculean undertaking. It’s okay to admit the need for help. Many technology companies are hiring outside consultants to lead massive organizational shifts and drive change. Even if you prefer to do things in-house, successful innovation happens when project stakeholders are identified and when leadership starts to act as agents of change.
Change leaders disseminate the rationale and impact behind higher-level changes to the rest of the company. That helps build trust and morale, important elements for companies whose strategies are predicated on emerging trends and out-of-the-box technology. They’re there to be a helpful resource and a friendly reminder of the work still ahead. To be an effective change leader, you want to encourage open and honest dialogue: Why are we doing this? What’s in it for all of you? Change is an emotional process, so make sure to celebrate the small wins together.
Develop people-driven business strategies
Simply put, employee engagement matters. Reducing long-term staffing costs through strategic retention is a cornerstone of innovation strategy. Investing in recruiting and retaining top talent ensures the best people are going to be driving your business into the future.
That message can tend to get muddled in the shiny, attractive chaos of Silicon Valley, where software workflow structures like agile methodology often bleed into HR strategy. The key is to develop a strategy unique to your business and your people, as opposed to simply copying what major players are doing. Michael O’Keeffe, the founder of innovation consultancy The Innovation Beehive, which works with companies like Google, told People Management that “lots of organizations say ‘we need be creative, let’s put in a ping pong table.’ But unless you work around changing the culture, you get people displaying the same behaviors, just on uncomfortable furniture.”
So while it’s certainly desirable to empower agile decision-making, it’s also important to flush out poor leadership and center your strategy around the people rather than the perks.
Refresh buyer personas
Take the time to understand the market. Research consumer trends and develop an anticipatory product offering that solves a problem or fulfills a desire. The Consumer Electronics Show (CES) is a perfect example of that at work. A major theme this year was smart home devices. Companies like Amazon have been steadily integrating their AI assistant-powered devices across all devices in the home for several years, but at CES 2019, we saw everything from a smart toilet to a toothbrush that can achieve a complete brush in under 10 seconds.
CES is indicative of technology companies being intimately aware of their consumer base, iterating and developing consumer electronics that touch upon current retail and demographic trends. As Jon Weinberg, head of strategy at Sephora, told McKinsey, “One of the tricks is having the pulse of the client, which is one of the true roles of strategy going forward, not just as technologies evolve, but as client segments evolve. Because the workforce at the senior level is very different from the consumer base in cutting-edge retailers.”
The ways in which technology companies approach innovation strategy enables them to be one step ahead. The ability of company stakeholders to lead organizational change, as well as the ways they engage their employees and their ability to address consumer demand play a crucial role in their longevity.
This article is a guest post by Sara Carter. Sara Carter is the Co-Founder of Enlightened-Digital, an online publication. An avid programmer, she believes that technology is a powerful tool for a better future. She enjoys writing about the latest in emerging tech trends and business innovations.