Prime. Kindle. Alexa. One-click shopping. Drone delivery. The cloud. When it comes to innovation, few companies do it better than Amazon. And not all those changes are technology-based. The simple addition of the “was this review helpful to you” button alone reportedly added billions to Amazon’s top line revenues. Chapeau to whoever came up with that.

But innovation doesn’t happen overnight. It requires effort. It requires discipline. Most of all, it requires you to have the right organizational culture in order to be able to iterate quickly and learn from failure.

So how do you put those foundations in place in order to drive greater digital agility and accelerate your transformation efforts?

Setting the innovation benchmark

According to Genpact’s Chief Digital Officer Sanjay Srivastava, keynote speaker at the recent CIO Summit hosted by GDS Group, Amazon pushes out somewhere in the region of 60 million changes every single year. Most of us struggle with only a tiny fraction of that.

“While many of those changes are tiny, incremental updates that make a marginal difference, they do all add up,” says Srivastava. “Amazon are making constant changes to their business on a massive scale. And that’s because they have the right culture in place to enable that.”

It illustrates what the benchmark is when we think about innovation and what best-in-class firms are doing so well. And the ability to move quickly and respond to rapid change – from competitive threats, customer demand or unforeseen events – is a common theme.

“The pace of change we see today is incredible,” continues Srivastava. “And it’s actually the slowest it’s ever going to be; we’re only going to see an acceleration when it comes to change from this point on. Which means the need to stay agile and adopt a mindset of constant learning and curiosity is critical.”

Driving business agility

According to Mckinsey, organizations that have been able to achieve digital agility see a 30% increase in customer satisfaction, a 30% improvement in operational performance and a 5-10x increase in the speed at which they’re able to make decisions. What’s more, 65% of such organizations report seeing a significant impact on their financial performance.

Setting up your organization for business agility is key. “You have to think about technology, about data. About your people, your operating model, about change management and your geographic presence,” says Srivastava. “You need to consider processes end-to-end and embrace design thinking. Because in many ways the distinction between IT and the business is eroding; technology is the business, and the business is technology.”

As a result, he believes IT teams need to evolve from an as-a-service model to thinking of technology as a strategy. “We need to work more with our boards and senior leaders to reimagine what business processes could look like, and how technology can bring value to the organization as a whole.”

Encouraging learning velocity

For Srivastava, both business and digital agility are closely linked with the concept of learning velocity: how quickly your organization is able to learn and apply new ways of thinking to current and future problems. “The ability to respond to and move quickly within a rapidly shifting business landscape is critical,” says Srivastava.

The poster-child for what not to do is Kodak. The company famous for its photographic film actually built the first digital camera way back in 1975. But at that time, Kodak had 90% of the US market on a product that generated an 80% profit margin – so despite the head start it had acquired through millions of dollars in technology R&D investment, the firm buried the digital camera concept and continued with business-as-usual.

Kodak’s subsequent fall from grace is an alarm call to any organization that fails to raise its learning velocity in line with shifts in the market. And when you compare that to Amazon’s ability to embrace change, the difference is stark – especially when it comes to digital adoption.

For Srivastava, the key lies in embracing both digitization and digital transformation as key concepts. “Digitization and digital transformation are not synonymous,” he explains. “Digitization is about taking an end-to-end process, breaking it down into its constituent parts, and then automating each part of that process. Ultimately you end up with something that’s cheaper, faster, better, and that’s great – but it’s not transformation. Digital transformation is about taking that end-to-end process and reimagining what it needs to look like in order to deliver a better experience, drive revenue growth, disrupt your industry. And when you’re done, the process is fundamentally different.”

Change doesn’t have to be big

And while it’s tempting to place all your bets on disruptive change – because that’s what the constant references to Uber, Netflix and others tell us to aspire towards – the idea of continuous evolution is just as important.

“We need to distinguish between the terms innovation and invention,” explains Srivastava. “There is a bit of a hero culture around the concept of ‘invention’, about creating something new. But innovation is more than that; it’s about using existing components and layering value on top; it’s about standing on the shoulders of giants in order to deliver the best return on investment; it’s harnessing a variety of tools to get where you need to go. It’s not about the CIO or the CTO or any other individual; it’s about the corporation as a whole.”

It’s something that Amazon appreciates only too well. Understanding our relentless appetite for innovation – and how to balance that with customers’ innate desire for comfort and security – has been key to the tech giant’s success. “One thing I love about customers,” wrote founder Jeff Bezos in a 2017 Letter to Shareholders, “is that they are divinely discontent. People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary.’”

And sure, Amazon has a huge budget and the resources to make stuff happen. But more than that, it’s about creating a culture that wants to embrace change and revels in the opportunities that presents. As Bezos puts it: “Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf.”

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