The shift from intuition to innovation: What this means for business

All successful companies are in the same business, the business of innovation. No matter what product or service they offer, whether they are the smallest of start-ups or the world’s biggest multinational, the companies that grow, are those that know how to create new solutions to fulfil unmet customer needs.

Innovating can be a risky venture. The history of invention is filled with stories of accidental successes or experiments that turned out to be ahead of their time and never made it to market. Assessing which projects will succeed seems like more of an art than a science. A few years ago, a global survey of top risk managers identified the No. 1 method for identifying and assessing risk. It was ‘senior management intuition and experience’.

But, successful innovation does not have to rely on intuition. We live in a world marked by an explosion of data. Almost half of the earth’s population now uses mobile communications. People, not just businesses, now routinely store their information in the cloud. And social networks are used every day by citizens of all ages and organisations of every type, from governments to schools to private enterprise.

The world’s systems and industries are becoming more instrumented, interconnected and intelligent. These improvements are allowing leaders and citizens alike to take advantage of these smarter systems in order to solve the world’s pressing problems and create a smarter planet.

As components of this smarter planet, such as devices, have become smarter, all of the communicating and connecting that they enable is yielding massive volumes of data. Every two days, we now generate the equivalent of all the data that existed in the world up to 2003. This is ‘Big Data’, and it makes up a vast new natural resource that can revolutionise industries and societies. It is this data, not intuition, which has the power to create winners and drive successful innovation in today’s ‘smarter’ era.

For example, Jet Airways, India’s premier international airline is using advanced analytics to more accurately calculate, track and report its aircraft emissions hence optimising its fuel usage by detailed analysis of each flight. Mapping its carbon emissions is helping Jet Airways save US$ 6 million per year, and contributing significantly to its green initiatives.

Executives who have long relied on their intuition and years of experience now have the data and the innovative technologies like cloud to look past their own biases in order to uncover meaningful patterns and anticipate outcomes. This approach is not limited just to industry or geographies.

A striking example is from Sri Lanka; where the Lanka Bell, the leading telecommunication service provider, adopted Smart Cloud to transform its existing infrastructure into cloud based services; not only to drive higher efficiency, manage costs and increase faster service delivery, but also for an improvised customer experience. Customers now enjoy a higher level of reliability and comfort knowing that their data is secure in a private cloud environment.

Along with this growing emphasis on technologies like cloud and analytics in the decision-making process, there is another key shift taking place among organisations. Today’s knowledge workers have far greater access to data and more sophisticated tools to manage it then employees did when the term ‘knowledge worker’ was first coined several decades ago. They also have better access to another important resource each other.

Among today’s knowledge workers, the new means of production is exchanging ideas. The competitive edge is shifting from cultures that emphasise gaining knowledge to those that emphasise sharing knowledge. This is where the value of being a social business comes into play. But don’t assume that ‘social’ means ‘trivial’. Today’s social network may look like it’s replacing yesterday’s water cooler, but what it is actually replacing is the production line.

What does this mean for businesses? Ultimately, it means that businesses that want to innovate and compete will seek out and reward employees who are good at sharing valuable information.

This groundwork is already being laid by the organisations who are giving their employees access to internal communities, forums, wikis and blogs, as well as ways to easily share it and build on it.

Innovating in the era of smart is about collaborating and discovering insights through the embrace of technologies like mobile devices and cloud and analytics. But technology is only part of the story. The bigger part is culture.

Organisations that are succeeding in this new era are evolving their cultures to make decisions based less on intuition and more on analysis. They are shifting their thinking from ‘knowledge is power’ to ‘sharing knowledge is power’. The biggest difference between winners and losers isn’t size or resources. It’s reluctance to change.



(The writer is IBM Sri Lanka Country General Manager)