Organisations around the world recognise the need to digitally transform their operations, but the rate at which they are doing so is still slow.

In fact, only 40% of companies are using digital transformation, says Ian Jansen van Rensburg, evangelist and chief technology officer: sub-Saharan Africa at VMware.

According to VMware-sponsored research by Cass Business School, an inability to turn ideas into new products, services and strategies, at the pace required, is putting organisations at risk of failure.

The report, entitled Innovating in the Exponential Economy, reveals the need for a culture of greater risk-taking and experimentation, but not ‘knee-jerk’ moves. Current incentives have led to a culture where ‘quick win’ initiatives are rewarded over more strategic ones – despite the greater potential benefit of the latter.

It also highlights that many business decisions are reversible and waiting on ideas to be fully developed before beginning to execute can be detrimental.

The unpredictability and pace of change means organisations can’t wait for certainties before committing to new ideas. These ideas need to be flexible enough to change in the face of different priorities and threats – relying on experimenting and improvising, rather than fully developing an idea and then implementing it at scale.

Report author Professor Feng Li, head of technology and innovation management at Cass Business School, comments: “The shift to digital has forced organisations to think differently about how they are organised, how they bring ideas to the table and the way they deliver and measure these.

“The future is difficult to predict and many new ideas risk becoming obsolete before they are implemented. My research reveals that it is the combination of leadership, culture and technology that will turn great ideas into reality at the pace required.”

Other key takeaways from the report include:

* Executing on great ideas requires critical timing – too early or too late in pursuing emerging opportunities can be equally damaging – and maintaining strategic focus to safe-guard against “shiny new toy” type distractions.

* Changing behaviours require organisations to transform their strategies and goals in ways that are aligned with the underlying values and assumptions of employees, which exist largely at an unconscious level.

* For innovation to succeed, risk taking – and sometimes failure – is unavoidable. However, many traditional risk management systems are no longer fit for purpose. Simply measuring what is most tangible – such as that invested in innovations (money and time) or the outcomes of innovations (number of new products) – can restrict innovation. Measurement should be able to change with the strategy, to ensure ideas are not disregarded before they can deliver for the business.

“A business plan in a digital world has to be adaptable to market and competitive decisions – sticking to it at all costs doesn’t usually end well,” says Joe Baguley, chief technology officer for VMware EMEA. “Achieving solid business outcomes require innovative thinking and the ability to turn these ideas into action, often at speed.

“This is only possible with a culture of innovation, where people know how to contribute and how to deliver. And it is the technology platform, where apps can be developed, managed and run across any cloud, on any device, that is the means to this – providing the flex for experimentation, speed and delivery.”

Jansen van Rensburg urges organisations to take digital disruption seriously. He warns that the hype around digitalisation and now fourth industrial revolution can cause technology fatigue. “People are sick of the hype and not focussing on digital transformation any more.

“But organisations should cultivate a culture of risk-taking and experimentation: without this they cannot move forward.”

This is especially true considering the rapid pace that technology is moving at, Jansen van Rensburg adds.

At the same time, innovation is not necessarily always about new things, he says. “A company built on innovation will be able to transfer ideas to different places, or use them in different ways.”

When it comes to the innovation-experience, this is by no means a new phenomenon but it is more apparent in the digital age, Jansen van Rensburg points out. “Doing things is not always as easy as they look.”

Innovation is often achieved through experimentation, he adds. “Companies need to be able to green-light ideas quickly, implement them, and modify them as problems arise, while learning on the go. So IT needs to delivers on new ideas at the speed of an Amazon or Azure.”

Finally, Jansen van Rensburg advises companies that they shouldn’t think in isolation. Silos are a reality in IT as well as in the business – and they need to be broken down if innovation is to flourish.