Undoubtedly, the need for innovation and investment in technology has become more important than ever for companies. Recently, I spoke to Gigabit Magazine on the importance of investing in innovative technologies and the development of innovation centers, in addition to Capgemini’s own experience on the subject.
1. Why is it important for companies to innovate and invest in modern technologies?
“51% of companies we surveyed in our innovation research, reported that their organizations are unable to keep pace with market changes. Richard Foster of Yale University calculates that the average lifespan of a company quoted in the S&P 500 has reduced from 67 years to just 13 in less than 100 years. So, organizations are seeing substantial changes in their sectors and related ecosystems. Such shifts demand innovation and investment or face the consequences.”
2. Why are companies struggling to innovate effectively?
“Companies struggle with their innovation efforts because they fail to equip themselves with the relevant capabilities, talent, and resources. To shift an organization’s innovation dial, a concerted effort needs to be made in five dimensions critical to innovation maturity: ecosystem, environment, governance, culture, and process.”
3. How important is it for Capgemini to maintain its global technology partnerships with leading names like AWS, IBM, Microsoft, and Google Cloud?
“Integral to innovation is access to a wider ecosystem. Innovative organizations must co-develop ideas in conjunction with both external and internal partners. Capgemini recognizes the critical nature of ecosystems with a dedicated alliances organization. This alliances organization ensures we maintain partnerships with leading names as well as managing an emerging partner program for startups in collaboration with Capgemini Group’s Chief Technology & Innovation Office.”
4. How has Capgemini’s own Applied Innovation Exchange transformed the world of tech?
“The world of tech is disrupted by the volatile, uncertain, complex, and ambiguous nature of the marketplace we all operate in. Our Applied Innovation Exchange (AIE) offers the discipline and global platform to help clients cope with this new paradigm that demands continuous innovation, and innovation delivered with speed, scale, safety, and certainty.”
“In 2017, our AIE hosted nearly 2,000 client visits or events. Each of these engagements was enriched by a process of helping clients discover, devise, deploy, and sustain the innovative business outcome their company requires. To cite just one example in the UK—we’ve worked with an organization to prove the concept of artificial intelligence reducing fraud such that they can see a tangible way forward for significant savings in their operations.”
5. How much do you yourself and Capgemini as a whole value the importance of workplace innovation?
“Hierarchical, bureaucratic, and linear work structures are flattening; morphing in to more flexible, collaborative, and self-managed environments. Structures won’t disappear completely. Instead, employees will enjoy clear areas of responsibility in new project-driven work styles, individuals will become increasingly specialist, and ad-hoc teams will come together (and disperse) quickly based on need.”
“Within this context, I believe that workplace innovation is of utmost importance. Indeed, our digital talent and innovation research tells us that a digital-first culture is a critical dimension for an innovative organization—not just lip service, but with the support and role modeling of senior leadership.”
6. What are the key benefits that innovation centers can offer?
“Innovation centers can offer a range of benefits. Most importantly, they accelerate the speed of innovation. WalmartLabs, for example, helped Walmart develop its internal search engine in just nine months, driving a 20% increase in online sales conversions. Staples’ innovation lab helped launch a digital wallet service in nine weeks—Staples’ fastest deployment ever. Innovation centers also provide a fresh source of ideas. By virtue of their location, innovation centers tap into a very wide ecosystem of startups, technology vendors, and academics. It is a great source of inspiration and new ideas.”
7. Are innovation hubs an integral part of digital transformation? What are the alternative approaches?
“Innovation centers indeed represent a key pillar of digital transformation; most centers were created with the explicit mandate to accelerate digital innovations. The weaknesses of the traditional innovation models—slow and often over-budget R&D approaches—led companies to explore these new routes.”
8. How can companies reduce the existing disconnect between innovation centers and the workplace?
“There are three key levers you can use to create a strong link between the business and innovation centers. First, ownership—you need to bring the business at an early stage to secure their support and closely involve them in the selection, scoping, and execution of innovation-center projects. Second, governance can make a significant difference as well. In certain cases, innovation centers are directly managed by the business and, as a result, are in sync with the business requirements. Third, location—certain firms make sure to have innovation centers not solely in the Silicon Valley, but also in locations that are important for the business. As such, they are close to innovation and operations.”
9. What advice can you give to companies looking to make the most out of their investments in innovation centers?
“First, innovation centers need to define the right purpose and focus. Successful innovation centers avoid being trapped in routine projects as well as too futuristic initiatives. They focus on innovations that can be turned into commercial reality. Leadership is also a critical success factor. It is imperative that the leadership team nurture the innovation centers and champion its initiatives throughout the organization. Finally, innovation centers should always prove their value by demonstrating early wins and following through on the promise.”
10. What do companies look for when choosing where to locate their innovation hubs?
“Proximity to tech, business, and customers—each has its own importance. AT&T, for instance, has set up its “Foundries” in Silicon Valley and Israel to leverage the tech ecosystem, and in Plano and Atlanta to be close to business and customers. Availability of niche skills is another criterion. For example, New York and Boston have emerged as big data hotspots, while Israel is a frontrunner when it comes to cybersecurity.”
11. Why is Asia becoming an increasingly popular region for innovation centers?
“A key reason for Asia’s prominence is the presence of a very strong digital talent pool. India, for example, as our recent research with LinkedIn shows, is the largest supply worldwide of digital talent. Asia is also a very large market for global players, who are keen to establish themselves in this region and localize their offerings to cater to the unique and evolving needs of Asian consumers. Finally, there is an increasing number of thriving tech hubs across Asia, be it in Singapore or Bangalore.”
12. Will innovation centers continue to be a growing trend in 2018 and beyond?
“Innovation centers will likely continue to be at the top of CXOs’ agenda in 2018. However, the focus of the leadership might evolve from opening new centers to making sure that the existing network of innovation centers delivers and creates an innovation culture across the organization.”