How to unlock low-risk innovation in uncertain times

By Richard Potter on August 6, 2024

In today’s world, there’s a critical need for businesses to reinvent and evolve.

In a PwC survey of 4,700 CEOs, 45% said they didn’t believe their company would be viable if it stayed on its current path, with inflation and macroeconomic volatility coming out as their biggest threats.

In the same survey, 56% said they expect technology to change the way their company “creates, delivers and captures value” in the next three years. But when technology is seen as the silver bullet to revolutionizing a business, it often fails to deliver the value it promises.

This high-risk, high-reward situation has created a vicious cycle, where leaders are fearful to adopt the technology that holds the key to commercial success without the certainty of knowing it will work as they want it to.

Unlocking low-risk innovation is critical. To do so, we first need to understand why businesses are struggling with technology adoption.

The dreaded digital transformation

We mostly see new technology adoption as part of larger digital transformation programs. These extensive programs leave no stone, or morsel of data, unturned. Although comprehensive in theory, this approach is lengthy and expensive, as entire teams are created to lead the change, systems are ripped and replaced and employees are retrained.

Trying to coordinate significant change across an entire organization is difficult, and rarely successful. Oftentimes, it’s seen as a task for IT teams but technology is only an enabler to digital transformation. A strong vision, an accompanying business strategy and a committed leadership team with a desire to reorganize business operations around technology are the core requirements for success.

Whether changing a procurement system, an HR tool or both, digital transformation requires business-wide collaboration. Yet when digital transformation programs don’t go to plan, the blame often falls on technology for failing to deliver value. So, let’s look at what’s really going on.

A strong vision, an accompanying business strategy and a committed leadership team with a desire to reorganize business operations around technology are the core requirements for success.

Richard Potter

CEO and co-founder, Peak

Technology: a team sport

When things go awry, scope creep is the primary culprit. Even if the initial objectives and requirements of a digital transformation program are adequately defined, it only takes one hiccup for it to quickly spiral out of control. The result of scope creep is delayed rollout, delayed value and increased costs.

Not only that, a long-term program comes with a long-term vision. It’s an appealing vision, a blissful state where employees and technology work hand in hand, but getting initial buy-in from employees and then maintaining momentum for years is a mammoth challenge for any leadership, communications or project team.

When motivation decreases because of scope creep or general reluctance to change, encouraging employees to adapt to new tools or ways of working gets even harder. If only 0.01% of the world will complete a marathon, why, when it comes to digital transformation, are we expecting 100% of businesses to complete one?

And then there’s technology. The technology itself is usually very reliable. Give it some data and you’ll get an output—it works. What isn’t as reliable is its ability to deliver the value you’re looking for and get your team using it, consistently. I’d argue that it comes back to your vision and business strategy: What are you aiming to achieve, what is the most suitable technology to help you do that and what input does it need?

So, despite the performance of technology being only one of several potential causes of business transformation strife, it takes the brunt of the blame. It’s this risk — or perceived risk — of troublesome technology, compounded by economic uncertainty, which places business leaders who know they need to evolve in a tricky position.

Doing nothing isn’t an option, but in uncertain times, the margin for error is unforgiving.

Unlocking low-risk innovation

The arrival of AI in the mainstream is the biggest change for businesses since the dawn of mainframe computing. Even though there’s no shortage of solutions to choose from, many leaders simply don’t have the budget to invest in technology that risks ending up unused, collecting digital dust. In the next few years, businesses using the technology versus those who aren’t will become apparent.

But AI doesn’t have to be high-risk. As the technology matures, performance guarantees are becoming more prominent, providing budget holders with the much-needed assurance that their AI investment will return value. For AI skeptics within teams, they crucially increase confidence in the performance of the technology.

Whether it’s inflation, economic volatility or your own digital transformation project that’s getting you down, unlocking innovation requires confidence in your technology investments. Once you have that, there’s no limit to your AI success.

This article was originally written and published for Forbes Business Council on 28 May 2024.