What is technological innovation?
In a business context technological innovation refers to the use of a new technology to improve the value of an organisation.
The term ‘technological innovation’ often refers to a business manufacturing a new or updated technology-based product. The touchscreen on the original Apple iPhone is regarded as an example of technological innovation. But technological innovation can also be used to describe changing internal company processes using technology, either built or procured. An example of this might be implementing instant messaging software such as Slack or Microsoft Teams, or upgrading from a server-based Customer Relationship Manager (CRM) to a cloud-based CRM. While this is not a consumer facing change, it can still be considered a technological innovation.
As such it is best to think of technological innovation an ongoing process rather than a one-off event.
How to 'do' technological innovation
High-performing businesses recognise that inspiration for technological innovation can originate from anywhere and can be applied to any aspect of an organisation. Effective organisations harness the creative contributions of all staff by encouraging a culture of innovation.
The process of technological innovation may be formalised, sometimes referred to as Technological Innovation Management. This is often a set of tools and processes that encourages the sharing of ideas between workers and management, as well as systems for documenting and acting on these ideas. Technological Innovation Management may sit within a broader innovation management strategy, that may be owned by a team or individual.
Processes to encourage innovation could be as simple as regular brainstorming sessions, to full integration within remuneration structures, such as cascading innovation-led growth targets.
Technological changes must be outcomes led and aligned with the broader strategic goals of an organisation. Good questions for leaders are: What is our aspiration in this strategic area? Is there a technological solution that will help us get there?
It is important to remember that innovations are not just large disruptive innovations and for digital businesses. Very few businesses will invent the next iPhone, but the survival of a business relies on ongoing incremental innovation. Encouraging this may be as simple as setting regular process-mapping reviews, or ensuring certain roles have ownership over software updates to ensure the value of new features is captured.
Innovative technology and risk
When people think innovation, there is a propensity to see it as something that must be balanced against risk. On the contrary, as ex-Telstra head, David Thodey said at an AICD lunch in Melbourne: “Innovation is risk management”.
As demonstrated in our 2019 report, Driving Innovation: The Boardroom Gap, Australian organisations underestimate the strategic risk of innovation that is too slow, too restrained or absent.
The risks associated with investing in an innovative technology must be balanced against the risks of not making the change. A good exercise is to examine the counterfactual:
- What advantage will our competitors have over us if they were to implement the technology and we were not?
- Is this a technological innovation that we will likely have to implement at some point in the future anyway?
- What are the costs of waiting?
Your businesses technology strategy must be regularly balanced and recalibrated against the fundamental pillars of your business. For example, that upgrade to the internal staff portal may have been deemed too disruptive a few years ago, but with more staff working from home, plus an increase in governance processes around data collection that upgrade may now be justified.
What are some examples of innovative technology?
Innovative technology is, of course, everywhere. From the wheel to the Thermomix, humans are always trying to improve things using technology.
The below list provides just a few of the multitude of innovative technologies that have impacted all areas of business in recent times.
Cloud based accounting software allow greater team collaboration and expansion.
From supply chain tracking to printers, everything can now automatically send usage statistics using the Internet of Things (IoT). This gives finance a much more accurate view of an organisation.
Marketing and Sales
Cloud based Customer Relationship Manager (CRM) and customer solutions give marketers an increasingly sophisticated and accurate understanding of customer needs.
Marketing automation has allowed marketers to increasingly segment audiences to provide tailored messaging and content at scales and with a timeliness that was not previously possible.
Programmatic advertising allows marketers to purchase ads using data to determine which ads to buy, and for how much, across thousands of distribution channels.
Programmatic and data-driven recruitment solutions allow HR to target potential talent, rather than blindly sending out job ads to the entire job seeker market.
Payroll solutions and outsourcing has reduced both administrative duties and errors.
Big data and analytics can be applied to almost every element of an organisation’s operations. Enterprise Resource Planning solutions and operations management software ingest this data and provide business insights.
Cloud based services now exist for almost every aspect of business, from warehouse management, to logistics, to inventory and beyond.
Project management tools not only streamline and automate many aspects of project planning and tracking, but give management a high-level view of all on-going operations.
As all other parts of the organisation rely on technology, the role of IT has become increasingly important and complex. IT plays a large role in the procurement of innovative technologies for the rest of the organisation, as well as in its roll out, integration, support and cyber security.