Businesses in the region view COVID-19 as an opportunity.
In a recent study by Microsoft-IDC, titled: Culture of Innovation, Foundation for business resilience and economic recovery in Asia Pacific (APAC), shows that 41 per cent of businesses view COVID-19 as an opportunity. Those businesses also expect to recover more quickly and come out of the crisis with similar or better revenue than before.
However, let’s not paint an overly rosy a picture. COVID-19 is taking a devastating toll on human life, and the resulting economic downturn has seen many people lose their jobs or suffer reduced incomes.
In the face of this disruption, people and companies are doing their best to keep going. In Asia Pacific, organisations that are adapting have increased their ability to innovate in the past six months. What’s more, as they embrace change, they are finding it easier to innovate.
Not all organisations are progressing equally, but there are many things we can learn from those leading the way.
Understanding the culture of innovation
The study includes a culture of innovation framework, which describes an interplay of people, process, data, and technology to assess how an organisation approaches innovation.
It also identifies four stages along the journey to a mature culture of innovation: traditionalist, novice, adopter, and leader. Additionally, it provides guidance to help organisations become leaders, so they can respond to challenges and recover faster.
Almost all (98 per cent) of the organisations identified as leaders, with the most advanced culture of innovation, share a belief that innovation is key to responding quickly to market challenges and opportunities. These leaders are more resilient to crises like the current pandemic and they expect to recover faster.
This resilience shapes their perception of business outcomes. Around 50 per cent of those organisations identified as leaders reported an expected increase in overall revenue when asked what impact they think COVID-19 will have on their overall business in 2020.
Leaders also recognise the importance of digital transformation and are accelerating the pace of digitalisation in response to the crisis. Eighty-seven percent intend to speed up initiatives, such as launching digital products, digital payments, ecommerce, and automation. Only 66 per cent of other organisations intend to do similarly.
Beyond digital products, services and processes, leaders understand the urgency of redesigning their overall business models. Indeed, leaders have already rethought their current business models and are exploring new ones to ensure business resilience and faster recovery.
Perhaps the most striking feature of the leaders is their approach to future planning. Leaders are looking to future-proof their businesses by focusing on technological and people capabilities. This attitude appears years ahead of other organisations that are still working on digitalisation. Leading organisations know that people are the key ingredient and that empowering them to use technology successfully is the challenge of the future.
Mazhari believes the current crisis has shown us how much business continuity and our future success depend on people, who need to be fully ready to embrace the digital reality, together with technology.
“While important, technology on its own will not make a difference. It is people’s capabilities and skills that allow organisations to innovate and transform.”
Leading organisation share certain best practices that everyone can implement.
Eighty-nine percent have developed a culture promoting disruptive ideas and encouraging innovation as a corporate value. Eighty-two percent prioritise and formalise innovation rewards over traditional performance and hire a diverse cross-industry, multicultural and multigenerational workforce. And 70 per cent invest in growing enterprise-wide capabilities and skilling initiatives.
This openness helps to unlock the potential of people to accelerate transformation.
Resilience and recovery
When the people of an organisation have fully embraced the concept of a culture of innovation, the other elements of technology, data and process fall into place.
Leading organisations overwhelmingly (92 per cent) invest in disruptive technologies to drive innovation and business transformation.
Leaders are also more systematic in their approach. They develop specific processes to drive innovation. They also have dedicated budgets to drive their digital innovation and programs.
They also understand the importance of leveraging data to differentiate and enhance
their products and services. Additionally, they make decisions to enable enterprise-wide collaboration and knowledge sharing.
This combination of tech adoption and tech capability is known as tech intensity. “Now, with every organisation becoming a digital one, achieving the success in transformation requires both the adoption of tools and technologies as well as their own digital capabilities,” Mazhari says. “Culture that encourages innovation and embraces digital opportunities is critical as it prepares the workforce and organisations for current and future challenges.”
The study lays out four steps that any organisation can follow:
Fortify resilience with technology
Invest in people’s capabilities and skills
Leverage data to increase competitiveness
Redesign processes to empower people to continuously drive innovation
Mazhari reiterates that the culture of innovation is achieved through the critical combination of technology and employee empowerment.
“To succeed in the new normal and drive digital transformation, we not only need to have a robust digital foundation, we also need to ensure our people have the skills and tools to work together to drive disruption. Ultimately, we want to ensure a more resilient and inclusive future for all organisations. At Microsoft, we are committed to working with organisations in Asia Pacific to make this happen, together.”