Here’s Why Your Workplace Innovations Aren’t Delivering ROI

Kevin SmithContributed by 2017 Conference Speaker Kevin Smith, Owner / VP at EPHEKTIV. Learn more about Kevin’s 2017 session and read about this year’s speakers.

The business world is changing. Fast.

With the rise of Machine Learning, Artificial Intelligence, Virtual and Augmented Reality, and the real-world deployment of 3D printing and self-driving cars, it’s safe to say that we are amidst real, disruptive change—something so significant that it is completely breaking the systems and business norms that have been in place for a century or more. And, if we loosely apply Moore’s Law of exponential expansion to this change, then it’s clear that it’s not going to stop anytime soon.

From a technical standpoint, this is shattering how many companies do business, and it is moving so fast that we have little to go on in defining new processes to deal with it. Established industry paradigms will eventually be disrupted by (most likely) technology innovation, resulting in the mass death of slow-to-adapt incumbents, regardless of past performance and prominence. We’ll see organizations that we once thought invincible quickly topple at the hand of small, nimble, innovative new market entrants that thrive on change and the unknown.

The survival of an organization will be based on its ability, or inability, to see, adapt to, and innovate in the face of business paradigm transformation. The degree to which an organization can see what’s coming and then switch, pivot, adapt, and resume forward progress quickly, while still offering value to existing or new customers, will seal its fate.

So, what’s the cure for surviving mass industry transformation like this? Ironically, it’s transformation itself. When business changes this much—not incrementally, but at a wholly transformational level—it changes the core of what it is, namely in terms of culture, and management. In short: The antiquated work cultures and management structures of today’s businesses are unable to support the openness to change, comfort with ambiguity, and need for innovation that successful organizations will need going forward. It’s time for a change.

A Question of Culture

Strategy cannot accomplish this alone. In order to reach the levels of agility and innovation that are required by the new realities of business, corporate strategies today need to be supported at their core by workplace cultures that engage with workers—from the C suite to the front lines—in the execution of that strategy. And those people are at their best when they feel relevant.

Humanistic psychologists believe that every person has a strong desire to realize his or her full potential, to reach a level of “self-actualization,” which can only be attained when lower order needs of survival—safety, belonging, self-esteem, etc.—are taken care of. When someone has no fear, wants for not, understands and values their place in society, and is able to contribute to that society, they are expected to continually exhibit high levels of morality, creativity, spontaneity, problem solving, lack of prejudice, and the acceptance of facts.

Have you ever felt vulnerable at work? Not safe, not part of the team, not understood? When you felt that way, how likely were you to put yourself out there and contribute? Did you feel heard? Did you make a difference? Did you feel relevant? A negative environment in the workplace can be stifling, cutting off innovation and employee engagement and limiting whatever strategic gains are possible.

A positive, constructive culture is the key to lasting, actionable change that can stand up to the challenges of today’s changing business world.

Realizing ROI

There are a multitude of things any given company can do to improve performance. Better communications, new equipment, more people, different people, new software, training, acquisitions, etc. A majority of these things, however, fall into three distinct areas: Technology, Process, and People.

Assuming that funding is not an issue, and that a company has access to the best technologies, how can they gain exponential improvements from the implementation of their existing processes and technologies? How can they sustain that performance change over the long term? How can they maximize the return on investment?

We would propose that this is achieved through an engaged workforce. You can deploy the best technologies, you can implement the best processes and procedure, but without leaders and employees that are truly engaged in pursuing improvement, performance will likely only increase sporadically and not achieve the desired levels of achievement. This is the Force Multiplier Theory. People are the critical strategic factor for sustaining performance over time, achieving the desired levels of improvement, and facilitating the organizational effectiveness that drives ROI.

Change is not going to slow down. Disruptive innovation is the normal state of modern business. Companies today need to not only be innovative, but agile and quick to adapt at all times, and the best way to accomplish that is to make innovation a cultural norm. This requires a coordinated effort from leadership and frontline workers to establish a culture that welcomes innovative thinking and nurtures fresh ideas.

For examples of how this is applied in the real world and what these theories look like in action, check out my presentation at ISPI 2017, titled “Embedding a Culture of Innovation in the Workplace: A Case Study.”