Innovation culture: How new ways of thinking contribute to the success of digital transformation
In the age of digitisation, the ability to innovate is one of the most important factors for a company’s growth and competitiveness. However, it’s not only technology that drives digital transformation. Even the very best innovation strategy is of little help if there is no adequate innovation culture within a company with which it can be implemented. It is also not enough to simply put the principles of innovation cultures into a strategy paper. Rather, employees must be provided with comprehensive training in dealing with digital innovations, as well as promoting an innovation culture within the organization.
McKinsey published an interesting core statement in the article "Culture for a Digital Age": “Cultural obstacles clearly correlate with negative economic performance.” The lack of an innovation culture had the greatest impact in the article, followed by low risk tolerance and silo structures.
IMC, too, is often faced with the challenge of reconciling customer orientation, entrepreneurship and innovation. This is especially true in the case of the current major release of the IMC Learning Suite. For that reason, we talked to Dr. Wolfram Jost, IMC's new Chief Product Officer, about the success factors of an innovation culture.
The new major release is scheduled for May at IMC.
What does this mean for the customer?
I have only recently become Managing Director of Scheer Holding and a member of the IMC Executive Board, so I am currently working myself into the new release. However, I have known IMC since its foundation, have always observed it, and am very much looking forward to the task and to being part of the team.
New releases are always of fundamental importance for our custome rs. Especially today, when there are a lot of technological innovations on the market, it is very important to keep the software up to date.
How do you define the term "culture of innovation"?
A culture of innovation means never resting on one's laurels, but always searching for new ideas. In concrete terms, this means always having an open ear for new ideas from customers and our own employees. Innovation is not an end in and of itself. It is about constantly improving the customer experience. Customer obsession is the central concept here. It means that innovation begins with the customer and is developed backwards from the customer.
Customers expect a company to be able to demonstrate and explain added value. So you should always take a step back and ask yourself: Does my new product, my product update or my new process ultimately bring significant added value to the people who will ultimately use it? The continuous improvement of the user experience is the be-all and end-all of innovative software development.
In the past, you were Chief Technology Officer. In your experience, how is it possible to create and maintain innovation dynamics in a company?
The goal of every software company is always to be as innovative as possible. But that's easier said than done, because innovation means two things. One is the customer-oriented development of new features, functions and architectural elements to improve the customer experience. On the other hand, innovation also means selling these innovations, that is, translating them into market success. It is therefore not enough to invent something new; you must also bring this innovation to the customer and satisfy his or her needs.
So should individual experts from different areas of the company be able to think a little entrepreneurially themselves?
Absolutely. Entrepreneurial thinking means that you not only do the things that you love to do yourself, but you also think about what will benefit your customers and your own company.
In software companies, people tend to develop innovations in secret and then wonder why the product doesn't find a buyer. That's not what I mean by innovation.
Innovation begins and ends with the customer. Any innovation that doesn't "go down well" with the customer isn't truly innovative. Technology-loving employees in particular have to keep this in mind. As a software company, you need to remind your staff time and time again that it's the customer experience that counts.
This brings us to the topic of user experience and usability. How important are these two goals from your point of view?
What the customer "experiences" when using software is the measure of all things today. This is where it begins and where it ends. Developing this customer experience parallel to the software is a core task for IT innovators.
As a member of the Executive Board, how do you succeed in promoting a good culture of innovation?
As a board member, first you have to set an example. That means you need to think customer-oriented yourself and be in constant contact with customers. It is also important to remind our employees that the software we develop is used to solve our customers' problems. That sounds simple, but it's very difficult.
What is the concrete challenge?
Let's say you want to build a car. Then you know what a car looks like, you've sat in it before and driven it yourself. So, you have your own customer experience in dealing with the product you are supposed to develop. This is not always the case with our LMS, which, incidentally, also applies to most other software companies. The developer who programs the software may never use it him- or herself. That's why our developers need a high degree of abstraction to put themselves in the position of the user. I know developers who have developed software for ten years and never used any of their own creations. In the sense of the experience idea this is certainly not the right way. Therefore, it is imperative to think backwards from the customer's point of view. Also, and especially, for developers.
Is there a trick that developers can use to keep this issue in mind?
That's the high art. The developer is faced with a difficult task. He must transform a technical problem into abstract software code. Exactly this translation of a technical problem into code is the art of software development. You sometimes need to think very abstractly and plan in advance what the customer might need later. No customer buys our software at short notice and then uses it for perhaps ten or twenty years. During this time, he or she constantly gets new innovations, like the latest release. This means that the software that the customer buys today will look completely different in five years. That's why you must always think very far ahead in terms of architecture, and also imagine what requirements might come in the future. The necessary scope for future adaptations must be taken into account in planning today. This is why architectural issues are becoming increasingly important in today's software development.
To come back to the question of how the developer can keep this problem in mind, there is only one solution: keep in contact with the customer again and again.
What does this mean for the development process?
Since nobody knows which requirements will arise in the future, software today must be developed as flexibly as possible. It is therefore very important to design the software as generically as possible and as individually as necessary. The individual adaptations for the customer, which are always necessary, should not be programmed hard, but configured via meta data. Scalability is the decisive goal here.
It would be possible for a single customer to develop something that fits perfectly, but with 1,000 customers this no longer works. This means you have to manage the balancing act of offering a high degree of customer orientation on the one hand, while at the same time ensuring a high degree of flexibility so that the software can also withstand future requirements. To put it bluntly, it would be as if you were designing a car today whose basic architecture is so flexibly designed that you can fly with it in five years.
So the point is to anticipate possible problems before the customer does?
Partly yes, and that too is innovation. You have to foresee things that could be demanded by the market in the future. These are two different types of innovation. With the first variant, an existing product is continuously improved. This includes developing new use cases in existing markets and improving the customer experience of products that already exist. In the second and even more difficult innovation variant (disruptive innovation), a completely new product is developed and often a completely new market is created for it at the same time. This is the art of software innovation. Amazon, Google, SAP and Apple, for example, have succeeded in this feat.
Examples of this would be shared mobility or streaming services?
Exactly, because in both cases it's about skills and products that aren't really new, but are consumed or used in a new way. In essence, it is about offering the customer a different experience, a new experience. Online shopping would be another example, because shopping itself is not new or innovative. But the experience of shopping from home on the couch with a laptop is another. And that's exactly what it's all about.
In your opinion, which core topics and techniques will be important in the future?
I am thinking in particular of topics such as microservices, API´s and containers, which are of central importance and will shape the future architecture of all software systems. To put it simply, containers are there to "transport" software more easily and thus bring it to the customer faster and more securely.
This can be imagined as a classic ship container. The container doesn't care what it contains. There are fixed standards that ensure that the containers can be transported on all trucks and ships, regardless of the manufacturer. Software containers have defined standards on the basis of which anyone can transport, install and manage the software contained in the container. No matter on which hardware. This used to be a big problem, because the software you had running on one computer was very difficult to get running on another computer. With containers, however, a software can run in different environments.
Other important topics are Artificial Intelligence, Machine Learning, API Management, Cloud and Software-as-a-Service. Another central area will be Learning Analytics. Learning is not an end in itself, at least for companies. After all, companies invest in the training of their employees so that they can use this knowledge for the success of the company. I am therefore convinced that the connection between learning data (who has learned what) and operational data (who has sold what) will become even more important.