The unpredictability and pace of change means organisations can’t wait for certainties before committing to new ideas. Yet a new report from Cass Business School and VMware revealed exactly that.
By Antonio Oriol Barat, head of cloud IT infrastructure services at Telefonica
The report also highlighted that if these ideas aren’t turned into new products, services and strategies, at the pace required, businesses are at significant risk of failure.
They need to be generating ideas that are flexible enough to change in the face of different priorities and threats – relying on experimenting and adapting to the market feedback, rather than fully developing an idea and then implementing it at scale. In effect, they need to be thinking like start-ups.
This isn’t easy. Take, for example, the telecoms sector. How dramatically has this industry changed? New digital services have disrupted the end-to-end telco value chain, forcing unprecedented change.
Although connecting people with world-class networks is a fundamental pre-requisite it is only the beginning; customers now expect their digital lives to be a seamless element of their “everyday lives”, with use of huge amounts of data to access content, with immediate gratification, requiring speeds with no latency. The competitive eco-system has also augmented; we’re now competing with OTT and digital providers and services, and our offering needs to reflect that.
It’s something we’ve spent a lot of time on at Telefonica. With our data communications, we need to be able to support the latest protocols and security standards. Consumers buy a solution to a business challenge or opportunity from a trusted partner. If we don’t understand these challenges and opportunities and can’t support the latest standards, then we will lose customers.
But simply chasing the latest hardware reduces us to fighting purely on price, so we need to think about how we add value. We need to be nimble and able to rapidly deploy fail-safe services so that consumers get the experience they expect.
How do we do it? It requires a deep cultural transformation and a totally new environment to foster innovation; none of this happens magically overnight. It requires us to think from the customer’s perspective.
That’s why we talk about thinking like lean start-ups to bridge the innovation-execution gap. These operations start small, aim high, fail cheap and fast and, most importantly, learn as much as possible. They close the feedback loop quickly, thus accelerating the way to success for the whole organization. Failed projects spend few resources, and the ones that survive have the potential to disrupt industries and create exponential growth. In addition, our end-to-end engagement with customers is underpinned by the key business challenges that they face; the need to grow their business, to embed trust in their own DNA, to optimise all activities and importantly to innovate to stay relevant.
These are all practices that can be applied to projects in large enterprises. What’s exciting is being able to combine those approaches with the resources of an established company. That means a business can marshal its technology resources to support innovation. That’s why we have Telefonica Open Future, which connects us with entrepreneurs and start-ups to share knowledge and abilities, and I+D, our research and development function which is working on innovations such as Edge Computing, a solution to deploy cloud nodes, with computing and storage, in our telco network exchanges, to reduce latency and improve performance in applications such as file storage, enterprise back-up, connected car and IoT. All are aimed at improving our customers’ experience, creating something that will add value to their lives by harnessing our extensive resources.
So how have we done what others struggle to do, and bridged the gap between innovation and execution? By following three principles:
* Create an innovation team: That may seem like an obvious one – project teams are often put together from different departments. However, often the work of these teams has to fit around members’ day-to-day work. With an innovation team, dedicated and full-time, even businesses from a more conservative background can effect a significant transformation. This team empowers staff to try new things, helps employees innovate or take forward an idea. Drawing on the experience and connections of individuals from many different parts of the business, it can be the foundation for the lean enterprise of the future.
* Spend less, achieve more: Traditionally, enterprises may have invested significant sums in one or two large projects, which had to succeed. The amount of budget invested, and the time taken, means any learnings got lost. By spending less, even if projects fail, businesses aren’t as committed, and learnings can be integrated back into the business to increase chances of success next time. For example, a messaging app may work effectively, but fail to generate enough user awareness to justify rolling it out further; the developer might take the lessons learnt from the messaging element and add them into a different service as an additional feature, such as a customer service programme, while also deploying the broader launch and awareness-raising lessons into pushing the new service further. In another project, the solution for a certain problem had been discussed and agreed with a central department of a potential customer (a big retailer) that had been previously involved in the problem research; but when the solution was also shared with the department in charge of the shops of the same customer, the team found out that the solution was impossible to apply in the shops; fortunately the prototype that had been used for the solution validation was a cheap one and had taken little time to develop.
* Focus on what you’re good at and get the best to do the rest: Start-ups focus relentlessly on what they’re good at and rent the rest. If you’re a telco, focus on providing your customers with the best possible coverage and services. If you’re a car manufacturer, build the best cars. Don’t get bogged down in the technology infrastructure – work with someone like VMware to get access to the digital foundations that will support your business objectives.
Ultimately, creating a culture of open innovation where new ideas can be harnessed and executed is the key to continued growth in the future. Closing the gap between innovation and execution can only be achieved by organisations adopting a more lean and agile start-up mentality and not being afraid of small failures along the way.