How to ride the innovation curve
At a time of significant and constant change, how can we ensure that our organizations — and our own careers — are positioned to ride the curve of innovation? My research into the history of accounting has revealed patterns that indicate the best ways to respond to the current environment. If you want to prosper as you move ahead, these are the steps you need to take.
Follow the S curve
Most business people are familiar with the hockey stick curve: A flat, quiet period followed by explosive growth in a service or business. However, the S curve can actually be a better indicator of what will next crest the wave of change.
The S curve starts with a low end at the technology’s birth, signaling a time when professionals should be developing new skills to prepare for imminent change. Early in the 20th century, for example, accounting publications focused on the new skills that would be necessary to cope with the wave of mechanization happening throughout the business world. The hot technology of the day was the slide rule, a kind of early calculator that looked like a ruler.
As the S curve rises and new innovation is embraced, it’s time to expand your skills. The innovation reaches maturity at the top of the curve, a time of prosperity for those who’ve developed and maintained their skills and adapted to changing needs. The S curve then slopes downward, which is when we should recognize the need to develop new skills ahead of the next curve.
We all know what the only constant is
Even 100 years ago, S curved trends inevitably experienced “artificial intelligence (AI) winters.” These are periods when the hype over a new technology fails to match expectations, ending innovation and investment in that area. The period after the dot.com bubble burst is one recent example: Many new communications and online shopping companies born during the initial internet boom failed and there was a retrenchment in the field.
There’s currently a lot of speculation on whether blockchain and cryptocurrency are due to face an AI winter. As for the next wave of innovation, it may be driven more by environmental changes than technological developments. Organizations should incorporate this into their strategizing and scenario planning.
Best practices for change
Being aware of S curves helps us know where we stand in the latest wave of innovation. No matter where that point may be, some tips are always practical:
- Don’t succumb to hindsight bias. This occurs when you believe the past was more stable and predictable than the present. People and organizations have always had to grapple with technological challenges of some kind. If you understand that disruptions tend to fall into a predictable pattern, it can be easier to understand how to address them.
- It’s all about collaboration. We tend to picture great innovators as blazing trails on their own, but innovation is more likely to happen through collaboration and networking.
- Broaden your skill set. In a world of automation, becoming too specialized can put you at risk. The narrower your abilities, the more likely that AI can replace you, which is why challenging yourself can be so beneficial. Consider doing something at odds with your current expertise.
- Keep your business brain agile. I’ve noticed that some of my best ideas come to me when I’m not focusing on accounting, so I try to read one poem a day to help myself think differently. In The Polymath: Unlocking the Power of Human Versatility, Waqas Ahmed suggests taking up drumming as another way to challenge your brain. For more ideas, I recommend the management accounting and thought leadership tools on the CGMA site, the book Factfulness: Ten Reasons We’re Wrong About the World — and Why Things Are Better Than You Think by Hans Rosling and co-authors, and my white paper Leading the Transformation 100 Years and Beyond.
The innovation curve can be steep, but with the right mindset you’ll be glad you took the ride.
Martin Farrar, Associate Technical Director, Association of International Certified Professional Accountants
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