The Road to Reshaping Business is a series of articles exploring industry trends, strategic imperatives and practical steps for enterprise leaders who are looking to embed continuous advantage into their operations. In this article, we focus on the dilemma many organizations face—pursuing innovation projects while still maintaining business critical continuity.
Most businesses are under pressure to innovate. But innovation often requires the readiness to take risks, back investments and embrace change.
How can you innovate in critical business functions while delivering the same level of business as usual (BAU) continuity, or “keeping the lights on” as it is also referred to? The risks can be high and business leaders can be held accountable.
Here’s the challenge—with new and disruptive technologies like cloud, AI and automation making and breaking organizations, along with a scarcity of specialist talent, it’s hard to keep up let alone respond to the pace of change that is reshaping business today.
In this article, we explore the business innovation vs. continuity dynamic. Can organizations do both? We also discuss tips for striking the right balance, common pitfalls, and the value of working with next-generation managed service providers, otherwise known as Operate service providers, to maximize the return on investment (ROI) from innovation.
Overfocusing on continuity
A common pitfall that many organizations face is having a leadership culture that is myopic with too much focus on the ongoing maintenance of legacy systems and processes. Failing to prioritize innovation and being slow to adapt can hamper speed to market, growth, competitiveness and ultimately lead to a loss of long-term customers. Internally, it can also affect your teams by creating employee dissatisfaction and attrition.
Not knowing how and when to innovate
In order to prioritize which innovation initiatives have the most appropriate ROI and to determine the right time to invest, leaders should have a well-defined innovation strategy that aligns with the organization’s overall vision and business objectives. Issues can arise when too many innovation investments are being considered at the same time, especially when they do not have the right level of cross-functional leadership buy-in or projected outcomes.
Create a clear innovation roadmap: The first thing to keep in mind when balancing innovation and BAU activities is the need to align your business strategy and develop a clear roadmap for both priorities. This may help your team prioritize innovation efforts and understand how strategic objectives contribute to continuity and company success, without affecting daily BAU activities. Defining the specific problems that business functions aim to solve, the opportunities they want to pursue, and the specific benefits they want to access, can make the difference in the effort to solve the right problems at the right time. Also, backing big bet innovation projects rather than high volumes of smaller initiatives, and not being afraid of engaging third-party know-how early on in defining the business case can also help safely drive the right agenda.
Develop an innovation-led culture: Fostering a culture that recognizes and rewards innovation can play a critical role in driving long-term competitive advantage for your organization. An innovation-led culture can help attract hard-to-source talent and motivate broader teams to contribute stronger efforts toward innovation programs.
Lead the charge: The final idea to strike the balance between innovation and continuity is the critical role of business leadership. As a leader, you should set the standard as a champion for both innovation and BAU activities—inspiring teams to be the catalysts of change. You should also look for ways to adapt your strategies and priorities as the goals of your organization shift over time due to the changing business landscape. A leader owning decisions that they make, along with the openness and awareness of when to bring in outside specialist skills and teams, is pivotal to help drive operational success. Leaders could ask themselves questions like “what BAU systems or processes could I potentially outsource so that my teams can spend more time on greater business value-add?” and “what technical skills or capabilities do we simply not have in-house and cannot hire quick enough for?” as examples of this rational mind-set.
For some organizations, working with an Operate service provider is a viable option to help them respond with agility to innovation demands and deliver against ongoing strategic ambitions while maintaining business continuity.
Disruptive technologies (e.g., cloud, AI and machine learning) are often critical to most innovation projects and improving existing BAU. But, acquiring and retaining the talent to develop and manage these technologies is proving harder than ever. The Deloitte Global Outsourcing Survey of 2022 found that 50% of executives identify talent acquisition as a top internal challenge in meeting their organizations’ strategic priorities, and 56% of the executives do not feel their organizations have the right mechanisms to retain employees. Mature Operate service providers often have access to leading technical expertise and technology vendor ecosystems that can harness these technologies and help maximize their value.
Innovating internally can also be expensive and high risk. It doesn’t always yield the outcomes envisioned when beginning the project, and failing to maintain the continuity of core business operations is not an option. Using an experienced Operate service provider with a successful track record of running similar complex innovation and business continuity projects, can help “de-risk” and reassure business stakeholders and teams with apprehensive attitudes towards innovation and challenging the status quo.
Remember that innovation projects are not just about implementing the latest technologies and at times may feel like you are overfocusing on one area more strongly than the other. They are also about fostering a culture of creativity, collaboration, and continuous improvement. Choosing the right Operate service provider who shares your vision for innovation, turns them into a strategic partner who also shares your commitment to driving long-term success for your business.
You can find more information about leading practices for driving successful innovation and business continuity projects, in the 2023 Harvard Business Review Analytic Services paper: Next-Generation Managed Services: Journey from Cost to Value. To learn more about Deloitte’s Operate service capabilities and read stories from leading organizations stories, visit: Deloitte Operate services.