The old proverb, necessity is the mother of invention, still holds true today in the modern digital landscape. However, is necessity and invention enough? That is being reactive, and waiting for a trend to have already arrived. What your company truly needs is innovation, and today we will go over what its mother is. In order to be digital capable, your company will need to make innovation a priority, and to do so you will need to build the right culture for it to grow.
As discussed in earlier blog posts on Intrapreneurship, the first step to innovation is to create a culture around the idea that it is ok to fail. Your company will never be digital capable if it cannot fail in a controlled manner. That means setting up an infrastructure in which innovation is widely and purposefully mentored. At the same time though it is necessary to change the approval process. A traditional project approval process requires an employee’s idea to be approved by everybody in the chain of command. This practice leads to a culture of stagnation as only one no can stall a new idea. As a result, employees will not be willing to bring new ideas forward. In an article, by Forbes, Amazon directly squares off against the traditional hierarchical structure of project approval. Instead of sending a project up the corporate ladder, where even one no can derail it, Amazon basically allows any project to be green-lit by any member of the managing team, assuming they have the resources. This creates a culture that is innovative and will allow for your company to constantly meet the needs of the ever changing digital landscape.
With all these projects being approved there must be some means to safeguard a company’s assets. Amazon has also found an interesting solution that also encourages its employees. They call it working backwards. The general idea is to design based on customers’ interests. Basically anyone in the company can create a new product, but they must be willing to really think about it in all manners, not merely from a tech perspective. Their employees must create a proposal that has a mock press release, a six page FAQ, and a more detailed description of the product, even going so far as to make a mock prototype. Then when they bring it forward, they are greeted with a certain initial rejection. This seems counter intuitive to creating a culture of innovation, however the no is a soft no. Instead, Amazon’s no simply means great work but reiterate it. Very few of the initial project proposals get approved on their first try, but by forcing the creator to go back and work on it some more, regardless of how good it is, Amazon eventually approves nearly 50% of its employee’s ideas for development.
The final example of innovative culture building, that Amazon incorporates, is its ability to develop capabilities regardless of the company’s current strength in the capability. Initially amazon was an online bookseller, now it sells everything online in a timely and customer oriented manner, but it doesn’t just stop there. Amazon is also one of the world’s leading cloud based computing companies, not even remotely related to book sales. Originally their cloud computing was designed to be used as a scalable infrastructure for their own website. However, by establishing this new capability, that may not necessarily been a strength immediately, Amazon was able to create a service out of it that not only reduced costs within its own company, but also made profits as a service to customers.
Amazon is a fantastic example of digital culture building, but culture is only one part of being digital capable. Next blog post will discuss what technological capabilities you might consider to get your digital integration off the ground.