In New York last week, innovators, collaborators and entrepreneurs came together at the Chief Innovation Officer Summit to look at corporate innovation and how they can kickstart a serious innovation process within their organizations.
“There is no longer the option not to innovate in any field”, said John Levis, Deloitte’s chief innovation officer, as he kicked off the summit. The focus was on converting great ideas into profitable projects, and the challenge of spreading an innovation mindset throughout large companies.
Many questions around this were explored. For example, once successful ideas are created how do they get processed? How do you evaluate the ideas and create a culture where these can be nurtured? And ultimately, how can you efficiently execute these ideas before they become obsolete?
A key theme was that ‘business as usual’ is unlikely to bring growth in today’s economy – in particular, the cost-cutting path to profitability is no longer relevant. As technological innovation has resolved most cost inefficiencies, innovating – either by creating new products or finding new applications for existing goods – is the path for growth, according to Gil Sadeh, co-founder and CEO of Signals.
A by-product of the accelerating rate of technological evolution is that the way customers consume products is changing. Even well-established businesses with solid customer bases are finding that emerging technologies are disrupting their traditional business models and revolutionizing customer behavior.
Mike Steep, senior vice president at PARC, used L’Oreal as an example: with the introduction of the iPhone as a purchasing device, customers are no longer visiting department stores to get advice on which products to buy. Now, the emphasis is on the social component. Customers want to know what their peers recommend, and often purchase these products online or through a smartphone app.
Decentralized innovation was an underlying theme throughout many of the summit’s presentations. The increased rate of emerging technologies has resulted in what the industry has termed ‘the technology innovation gap’: technology is being produced whether or not there are applications for it, and whether or not the companies know how to adapt, according to Gil Sadeh.
Large companies tend to be unprepared at handling emerging technologies because all of their internal expertise is centered on their traditional R&D models and corporate processes. This means they must look outside of their organization to learn how to evolve along with emerging technologies. Steep recounted that L’oreal reached this decision in deciding how to innovate. Smartphone apps and social listening wasn’t their forte, so they brought in external consultants and developers to help them redesign their approach and improve their products.
Sadeh says that the reason traditional R&D models are becoming obsolete is largely because companies are unable to keep pace with predictive analytics solutions.
With the amount of information that is being produced on a daily basis, standard R&D cannot keep pace with news from professional journals globally, and the scope of scientific progress that is populating global networks.
The transformation from tradition in healthcare – from volume to value
For the healthcare industry, there has been a big shift towards a consumer-centric system. This has been caused by non-traditional competitors and the rise of technology – the summit explored how providers, insurers & hospitals can respond?
Despite some amazing advances in medical treatment, developed countries are still desperately in need of restructuring. Preventable medical errors are often overlooked, yet reportedly occur in 10 percent of hospitalization cases in the UK and are the third biggest killer in the USA.
The three main types of innovation in healthcare are consumer focused, technology based and business model based. Rising costs and increasing patient expectations have put real pressure on the healthcare sector to use technology whenever possible. Simple transitions like the adoption of electronic health records have saved billions of dollars and increased the security of patient information, not to mention the efficiency when obtaining these records.
Busy Burr, vice president of innovation at Humana provided insight into how they’re growing their ‘return on health’. Busy defined new practices being implemented and how they’re shifting the overall healthcare experience to enhance the value to customers as opposed to the volume of them.
Another big trend is consumerism in healthcare – people are now questioning century old practices. The delivery of certain processes is no longer up to scratch and, because of new technology, innovative and non-traditional providers are now challenging “outdated” methods.
The Chief Innovation Officer Summit certainly explored many of the issues that face big corporates, and how they need to adapt to a changing landscape where consumer-centric technology will require them to change in the face of more nimble, tech-savvy emerging competitors.