The challenges to innovate and digitize to stay competitive

The challenges to innovate and digitize to stay competitive

Innovation is easier when you are a startup with a fresh idea or a new way to do things. The real challenges come later on as you try to remain innovative over time. The key is how (and whether) you approach digitization.


If there is one thing that well-established companies are having trouble with these days, it is staying competitive. In a market that demands continuous adaptation, they are finding that innovation is one of their biggest challenges. In order to stay relevant and drive growth, they need the fast-pivoting energy and the creativity of a startup.

What powers the startup mentality? And how can established businesses create strategies of their own to tap into their own capacity for innovation?  They can start by identifying where their challenges lie.

Offline challenges that kill creativity and prevent innovation

It is exciting to be part of startup culture. The future seems bright, teams are bursting with fresh ideas, and there is a sense of ownership and accountability among small teams, the kind that are typically on board at the very beginning of a new business venture. But switch gears and look inside an established company and those attributes are hard to find. Even startups themselves find those qualities to be elusive as the years roll by.

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The point is, innovation is first-and-foremost a mental state of mind. When leaders get distracted, lose hope, or stop paying attention to how their company is run, innovation tends to come to a grinding halt. Challenges like the following begin to emerge or, if it is an established organization, these problems can be deep-seated:

  • Internal resistance to change, making it difficult to adopt the kind of new attitudes, systems, and processes that encourage innovation. Mental resistance to change is a chief obstacle for established companies but it is not a fatal flaw. Fixing the following challenges can help employees at all levels adapt to change.
  • No clear company vision, making it hard to achieve alignment, which is what spurs motivation and innovation.
  • A company culture that does not emphasize collaboration, which is the basis of innovation. When teams are encouraged to share ideas and respect one another’s opinions, a collaborative culture can begin to take root and thrive. Teams will begin to consider new ways of doing things when diverse sets of ideas get tossed about in a supportive environment that values everyone’s opinions.
  • Lack of cross-functional teams, which tend to be better at coming up with out-of-the-box solutions. This ties in with the previous challenge as well as the following…

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  • A vertical, hierarchical organizational structure that prevents an exchange of ideas across all levels. Collaboration (and therefore innovation) can be difficult under these circumstances.
  • Failure to adopt a customer-centric approach in the business strategy. If you are not paying attention to your customers, you won’t know what they need. When you do not know how to satisfy consumer pain points, you will lose business when your competitors are doing a better job. You will also have no real strategy for innovation that satisfies today’s standards for success. In other words, if you do not know what your customers want and need, why bother innovating?

The challenges to continually innovate and digitize to stay competitive how to stay competitive

Continuous innovation requires ongoing attention given to every level and across every unit of an organization. The practices that foster innovation affect mindset, organization, structure and finally, IT.

As you are about to see, the real key to innovation is digital transformation. Wherever your IT resources might be, whether they are housed inside an IT Department, an outsourcing company manage them, or they have been integrated into business units and C-level departments, it is paramount that your digital resources support innovation, too.

Digital challenges that stifle innovation

The offline challenges to innovation outlined above can be met with good leadership combined with 21st century digital solutions that support innovation. Increasingly, organizations of all sizes and in all industries are moving toward digitization.

What are the challenges they face?

  • Lack of data and/or inability to extract insights from data. This ties in directly with some of the offline challenges outlined above. Know the market, know your competitors, and know your customers and then you will know which way to pivot to keep up with them all and remain competitive. Systems that do not allow for modern standards of data collection, storage, and management are holding companies back not just in the areas of innovation an speedy pivoting but in other ways as well.
  • Legacy systems. Most established companies have been using digital technology for years, if not decades. With the rapid rise of software capability the past five years, most are dealing with outdated software. The question becomes, do you update your legacy systems or start from scratch with new, custom software and apps?
  • Bad UX. Employees who work with badly-designed internal apps are not at their most productive. That can leave little or no time for innovation.
  • Lack of collaboration-supporting platforms. With all the talk about collaboration in the previous section, there needs to be a powerful platform to support the exchange of ideas, the sharing of documents, and other communications. Digital platforms are needed for internal collaboration & communication, vendor management, customer interaction and more.
  • Failure to be mobile-ready. To satisfy customer expectations, organizations who interact directly with consumers need to have high-quality customer-facing mobile applications. In a retail environment, for example, these apps need to have digital payment features that allow for quick-and-easy payments. Consumers also expect their interactions with companies to be personalized and for those companies to recognize loyalty. And again, data key (refer back to the first digital challenge on this list).
  • Oversight problems. Most companies, no matter how far behind they are with digital transformation, have a wide spectrum of technological capabilities. Maybe it is the apps that individual employees download on their devices to help them with their jobs. Maybe it is a business unit purchase that helps a whole department improve productivity. Someone needs to connect everything in order to achieve oversight, stay compliant, ensure security, and maximize their software spend. Without these capabilities, an organization faces tremendous risk – hardly a factor for promoting innovation.

The challenges to continually innovate and digitize to stay competitive how to stay competitive

Forrester highlighted in a survey that executives are very optimistic about how digital will change their business. They also predict 47% of revenue will be influenced by digital. To improve competitiveness and remain relevant in the 21st century, organizations need to focus on constant innovation. When the software they use supports innovation, the pieces fall together and even the most slow-moving enterprise can get back in the game and feel like a startup again.

Reality is right in front of us: Digital transformation is the key to constant innovation and companies all around the globe are aware of the need to leverage digital transformation if they are pursuing stay one step ahead of their competitors, all that with the help of ever-evolving technologies.

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