#7 When Companies Hoard: Stop Losing ROI on New Tools

What happens when we think innovation equates to immediate impact? Tune in as we unpack the common thinking traps that even major companies fall into after choosing the most innovative system for their company and learn how to avoid it in three simple steps.

Transcript

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Some people collect seashells. If you're like me, you might collect books that tend to collect dust. Do you know what companies collect? Money? Trophies? You're right. It can be a long list of things, but here's one you might not have expected. Some companies collect changes in the form of tool licenses. The larger the company, the more common this collection of licenses is. Well, it's because they can afford it, you might say. Yes, that is true. But while it sits on the shelf, the rewards and the value of these bought tools dwindle, leading us to think about a larger problem that I want to discuss today. Conflating investment with impact. Welcome to Change Actually, a podcast about change in the workplace, in organizations, and in ourselves. I'm your host, Hilary Chan. I've spent years helping leaders, humans, including myself, and organizations navigate to change, grounding what makes us human into practical strategies for individual and organizational growth. If this sounds like you, subscribe and follow the podcast. Any tool these days can have a bunch of uses. The pharmaceutical field shows us this possibility clearly and regularly. Ozempic used to be a drug that treated diabetes. Now it's also used for weight loss, regardless if the patient has diabetes. Viagra was originally used to clinically treat the heart, and now it is used to feed the heart's desire. These accidental discoveries for multiple uses are highly lucrative. We all want to be able to optimize what we buy with these discoveries, but somehow, if we just hoard them, we don't seem to get these accidental discoveries. So what is missing? For one, accidental innovations happen as an offshoot of detailed intentionality. What I mean by intentionality is have you gone through the thinking process going from how the tool be used to its final impact? In the case of the pharmaceuticals, the discoveries didn't occur because the drugs were invented just because we think chemical compounds have a nice ring to it. They happened because their purpose was extremely, dare I say, prescribed to the T. Why is this important? Let me ask you, what happens when we lack intentionality and expect innovation? We can learn from many of the companies that tried to launch enterprise resource planning software systems in the 90s and early 2000s. First up, Nike. In the early 2000s, Nike invested into a new SAP Enterprise Resource Planning or ERP system in hopes that it would predict demand and improve supply chain efficiency. Great hopes. That ended up in overstock of the slow-selling products and underproduction of the high-selling ones. All of that costed them$100 million. It turns out that the new tech integrated with the new system generated inaccurate projections. It goes beyond the fact that the data inputs were off. The root cause gets at why these inputs were off. There wasn't complete alignment on all the exact elements that would funnel into the forecasts across its global reach. And then there was that downstream piece of needing alignment on how forecasts would drive decisions and foolproof that plan. Nike knew they wanted to upgrade their enterprise resource planning game, but that was not specific enough. Without alignment on a clear and detailed vision of the full process and its outcomes, accurate tools can lead to inaccurate and debilitating outcomes for the company. And when a plan exacting the feasibility of changing the current state to a future state is missing, we might end up backtracking not to point zero, but maybe even beyond that. Little, the German supermarket chain that spent half a billion euros on their SAP ERP project had to abandon their system because they invested in the project without first understanding and specifying what they wanted the system to do in the first place. In their vision for their system, they didn't account for how it would take over from legacy processes and systems. And this huge mismatch led to too many failed attempts to make things work, and these clashes led to too much change resistance. So, as you can see, knowing specifically what your business problem or problems are and the exact future state you want to be in will help you avoid the pitfalls that come from investing without innovating. That means three guiding principles. One, if I haven't repeated it enough already in this episode, it is. Be specific. Number two, don't buy it just because it looks shiny. SAP ERP solutions often look like the savior to all of a company's resourcing and financial processing issues. It can be, no doubt. But not one size fits all. And that is what companies who fail to implement SAP ERPs often fall into the trap of. Leading me to the third principle. Customize innovations to fit the reality of your company today and the reality you want happening tomorrow. A lot of companies assume simply purchasing a tool would solve their company specific problems. But oftentimes, the more issues from all aspects of a company one solution or product offers, the more calibrating is required. Calibrations, really customizations, may take in the form of ensuring you have data hygiene, every legacy process accounted for, all the current and future states detailed, et cetera. One size fits all solutions are often so wide in their capabilities that it will require you as the company to pick and choose for your users and to customize it as such. So you'll need to be wise in how you define its usage. Otherwise, you risk tanking the investment. So, what will you start doing differently now as an executive, a manager, heck, as a human being? Will you be a shopaholic and hoard, or will you shop and use intentionally? If you liked this episode and want to stay posted on All Things Change, like, subscribe, and follow me on LinkedIn. Remember, if you can't be specific about all the ways an innovation will help you today, it probably won't be that useful for you in the future. And that's change, actually.