The growing culture of innovation

Hong Kong’s growing culture of innovation is critical to business resilience and economic recovery from COVID-19.

Spurred by COVID-19, almost 70% of Hong Kong organisations have accelerated digitalisation in a variety of ways to adapt to the new reality—from launching digital products and introducing digital payments to embracing eCommerce and automation, according to a new Microsoft-IDC study focusing on the culture of innovation. Over half of business decision-makers in Hong Kong say that innovation is now a ‘must’ for an effective response to market challenges, opportunities and to ensure business resilience as they recover from the COVID-19 fallout.

Cally Chan, General Manager of Microsoft, Hong Kong and Macau said, “Innovation is no longer an option but a necessity. We’ve seen how the recent crisis spurred transformation across Hong Kong, and organisations must now embed the ability to innovate into their core to recover effectively…Hong Kong organisations boast a constant appetite for growth and evolution. The experience of COVID-19 has made this evident with almost half of businesses predicting their business model will lose competitiveness in five years, while over half say innovation is a ‘must’ and is vital to performance and resilience. Hong Kong’s desire and urgency for continuous improvement will ensure the success of businesses in this new normal.”

Businesses have realised how their ability to embrace challenges and to innovate directly fuels performance and business resilience during the crisis. A third of organisations in Hong Kong viewed COVID-19 as an opportunity—with these organisations expected to perform better than their counterparts. They are 1.3 times more confident that they will recover their businesses within three months or faster, and 3.3 times more confident of growing revenue despite the crisis.

Victor Lim, Vice President, Consulting Operations, IDC Asia/Pacific, said, “Over half of these organisations said such confidence stems from the ability to innovate. This demonstrates that innovation is the key differentiator and Hong Kong organisations have the potential to develop further and embrace a culture of innovation to accelerate their transformation.” 

Microsoft released these findings in its latest study with IDC Asia Pacific, which surveyed 200 business decision-makers and 219 workers in Hong Kong within six months, before and since COVID-19. The Hong Kong study was part of a broader survey among 3,312 business decision-makers, and 3,495 workers across 15 markets in Asia Pacific conducted over the same time. The Culture of Innovation: Foundation for business resilience and economic recovery in Asia Pacific survey, uncovered how organisations could successfully fuel business resilience and performance through innovation.

The study introduced the culture of innovation framework, which captures the successes from organisations’ approaches to innovation. Through the research, organisations’ maturity was mapped in four dimensions—people, processes, data and technology. In just six months, organisations in Hong Kong had matured in a culture of innovation by 8%, an indication that they have increased their ability to innovate. But by comparison, organisations in Asia Pacific saw an 11% growth in culture of innovation maturity.

People and technology are and remain top priorities for improvement in Hong Kong. Hong Kong organisations are more mature than Asia Pacific on average across all dimensions of culture of innovation except in Technology. Hong Kong businesses have the potential to further improve on technology and people, which are also the weakest dimensions in the culture of innovation across Asia Pacific.

When asked about their priorities for the next 12 months ahead, organisations in Hong Kong indicated that they would focus on people as it is the most essential for business resilience and recovery. Moving forward, Hong Kong organisations’ top strategies in the long-term for future proofing business and promoting resiliency are to cast a strong corporate vision, clear direction and agile decision making from leadership, and instilling corporate culture and mindset to embrace risks and ambiguity.

Chan added, “It is encouraging to see business leaders in Hong Kong recognise that focus on people and culture is crucial to drive sustained innovation and realise the digital transformation ambition…Achieving success in digital transformation requires both the adoption of tools and technologies as well as one’s own people’s capabilities—what we term as tech intensity—which is a critical component of the culture of innovation.”

James Thompson, Head of Digital, Gammon Construction said, “While technology is a key enabler, culture is probably 80% of the challenge within our transformation journey…We have taken a three-point strategy to ensure innovation culture and new processes are deeply embedded. The first is a top-down ‘train the trainer’ approach to upskilling and implementing Information Managers across the organisation. We also identified high-potential junior talents who are curious and tech-savvy to drive change. Lastly, we make all new technology user-friendly and value oriented. Culture change requires ongoing, consistent effort—encouraging collaboration is also a key part of our strategy.”

The culture of innovation is a success formula for resilience and faster economic recovery and by using the culture of innovation framework, the study revealed the best practices that organisations can adopt to progress across people, technology, data and process. Specifically, organisations are encouraged to:

1. Fortify resilience with technology by strengthening the organisation’s approach to digital transformation through resilient technologies allowing simplification, flexibility and agility—cloud, artificial intelligence and machine learning. At the same time, ensure that cybersecurity is infused into the organisation’s digital footprint.
2. Invest in people’s capabilities and skills by creating an open and inclusive environment to attract the best and diverse talent. Integrate workplace innovation efforts that will be crucial to accelerate transformation, ensuring the right rewards and incentives to encourage innovation and upskilling to sustain the pace of innovation, by unlocking people’s capabilities.
3. Leverage data to increase competitiveness by capitalising on the value of data through developing new data-driven products and services and revenue streams for the organisation’s competitiveness. Democratise data to empower data-driven culture. It will be key that data-driven insights are leveraged for enterprise-wide collaboration and decision-making to institute a knowledge-sharing culture.
4. Redesign processes to empower people to drive innovation continuously by creating a systematic approach to drive innovation—from ideation to commercialisation and establish a centralised digital transformation budget, along with digital KPIs. Customer centricity should be at the heart of continuous improvements, and a feedback loop is necessary to capture learnings on an ongoing basis.

Chan concluded, “It’s imperative that people are equipped to collaborate and encouraged to drive sustained innovation. Our goal is to realise an inclusive future where all organisations in Hong Kong are dynamic and resilient – to recover well and thrive despite the crisis. At Microsoft, we are committed to working with organisations in Hong Kong to make this happen, together.”