How banking on your company's people steers innovation

Israel's tech sector is often presented as the engine that generates the Israeli economy and as such, provides innovative patterns of work and conduct which gradually seep into other sectors of the economy. What is innovation in an organization? Does an organization that seeks to implement innovation should only cling to technological solutions? While the process called "digital transformation" is the adoption of new technologies, the path to it lies in the adoption of innovative ways of thinking.

Organizational innovation is primarily intended to serve the organization's targets and support its business goals, not vice versa. Therefore, organizations that seek to reinvent themselves, or provide a specific response to the need, often turn to technological innovation. According to a recent survey by Microsoft, a digital transformation has taken place in almost every sector at various stages. The digital transformation results from a crucial need to find quick solutions for business continuity in various organizations. The understanding that there is a need for change in thinking patterns in organizations of all kinds was the key to the ignition of digital transformation processes that helped entire industries maintain business continuity, even during a long period of uncertainty. The survey indicates that organizational innovation is an element that almost any organization can adopt and it has the power to provide an immediate response for urgent and versatile needs. The way to understand the advantages of innovation is the result of a thinking process that begins with the understanding that there is a need for organizational culture change to make the organization more efficient with creative solutions to increase profits.

Organizational innovation can be measured on three layers: technology, money, and people. Microsoft, for example, the world's oldest tech company, has managed to maintain its position as one of the most profitable companies for nearly five decades and is considered synonymous with computing. Microsoft was perceived until a few years ago as an archaic and outdated organization. Although Microsoft was a leading technology provider, its organizational culture was far from innovative. Since Satya Nadella's appointment as CEO in 2014, organizational thinking patterns have changed unknowingly. Most of the change has been made by implementing a culture of openness to cooperation and knowledge sharing on all levels of the organization, which enabled innovative processes and culture. Organizational innovation created new sources of income, generated revenues, and accelerated Microsoft's stock. The change and implementation were made through the most important and significant component – the people.

Innovation agents in an organization can come out from almost any organizational function or seniority imaginable. From business leaders and management, through field and sales teams, to operation-supporting functions such as finance and human resources. When we develop innovative thinking among employees, we also open a window for tech solutions adoption and challenging basic patterns and fixations. Innovation in an organization is accompanied by openness, knowledge sharing, and adoption of patterns and outcomes in revenues.

Organizational innovation appears in every sector. We witnessed how many organizations in Israel from a wide variety of sectors have managed to reinvent themselves and carry out an accelerated process of digital transformation, even if it is not part of their core business. This transformation supports their business activities by adopting innovative thinking patterns, which are first and foremost a result of the human component that drives the long process of digital transformation that is supposed to take the organization forward and increase its resilience. The first step in the journey towards digital transformation will be forever taken by the people who comprise it.

Michal Simler is CSU lead, VP at Microsoft Israel