In today’s volatile and uncertain world, businesses face constant challenges that test their resilience. Innovation plays a crucial role in enhancing resilience, yet many organizations still perceive tension between the two instead of recognizing the positive outcomes they can achieve. Prophet’s latest global research report, “Building Business Resilience Through Innovation,” reveals that successful organizations leverage innovation to drive resilience.

Greater China and Hong Kong, among the fastest-growing regions globally, encounter unique challenges such as limited resources, inadequate infrastructure, and complex socio-economic contexts. However, these constraints also foster a culture of frugal yet bold innovation, making these regions highly creative in problem-solving. According to the Global Innovation Index 2022, Greater China and Hong Kong are closing the innovation gap with North America and Europe, becoming hotbeds for tech startups and home to highly successful companies with soaring valuations.

Leading the innovation front in the Greater China region is Hong Kong, positioning itself as a hub for innovation. The city has ambitious plans to invest HK$500 billion over the next five years in developing deep, future-ready capabilities for innovation and transformation. Notably, global giants like Google, Dyson, Visa, and Hyundai have chosen to establish their APAC headquarters and innovation labs in Hong Kong.

Optimizing business resilience through innovation is crucial in today’s dynamic landscape. Discover how these techniques can drive success and empower organizations to thrive amidst uncertainty and change.

The research indicates that several companies in Greater China and Hong Kong excel in innovation by adopting diverse techniques across their organizations. Here are four successful innovation techniques we uncovered: For example, Bank of China (Hong Kong) spun off a business unit when it embarked on its digital banking journey. To accelerate digital transformation, the digital bank operated much like a lean and agile startup to ramp up its digital product development process. The new digital banking model was then reverse-engineered across the legacy bank as part of the enterprise-wide transformation. Today, Bank of China (Hong Kong) is highly regarded as one of the most innovative banks in Hong Kong, with a significant number of its workforce in its digital, IT and tech divisions working in pod-like structures to continuously deliver products ahead of its competition.

Takeaway: Large traditional organizations must break down the walls of bureaucracy, and function like startups to stay agile and ahead of the innovation curve.

For example, Bank of China (Hong Kong) spun off a business unit when it embarked on its digital banking journey. To accelerate digital transformation, the digital bank operated much like a lean and agile startup to ramp up its digital product development process. The new digital banking model was then reverse-engineered across the legacy bank as part of the enterprise-wide transformation. Today, Bank of China (Hong Kong) is highly regarded as one of the most innovative banks in Hong Kong, with a significant number of its workforce in its digital, IT and tech divisions working in pod-like structures to continuously deliver products ahead of its competition.

Takeaway: Large traditional organizations must break down the walls of bureaucracy, and function like startups to stay agile and ahead of the innovation curve.

1. Embrace the Lean Startup Mentality: Fueling Innovation Across Your Organization

Large enterprises today often face challenges due to their long-standing legacy practices and bureaucratic structures, which can be resistant to change. However, adopting a lean startup mentality can enable these enterprises to operate with greater agility and flexibility, responding in real time to evolving business needs and customer feedback. This is achieved by organizing innovation teams into pod-like working squads, dedicated to building new products, testing features, and validating ideas in an agile manner. In Hong Kong, firms have successfully embraced this approach, with pod-like team structures being twice as prevalent compared to the US and UK (27% vs 13%).

For instance, Bank of China (Hong Kong) undertook its digital banking journey by establishing a separate business unit. To expedite digital transformation, the digital bank operated with a lean and agile startup mindset, streamlining its digital product development process. Subsequently, this new digital banking model was implemented across the entire legacy bank as part of an enterprise-wide transformation. Today, Bank of China (Hong Kong) is recognized as one of the most innovative banks in the region, with a significant portion of its workforce in digital, IT, and tech divisions working in pod-like structures to consistently deliver products ahead of the competition.

Key takeaway: Traditional large organizations must dismantle bureaucratic barriers and embrace startup-like practices to maintain agility and stay ahead of the curve in terms of innovation.

2. Leverage Open Innovation to Expand Innovation Horizons

Open innovation is an approach that involves working with external partners to generate and implement new ideas. Instead of relying solely on internal resources, companies engage with a variety of external stakeholders, such as customers, suppliers, universities, startups, and other companies, to develop new products, services and processes. The research shows that organizations in Hong Kong are more likely to have formal innovation incubation programs than in the West (35% vs 15%).

The Hong Kong government continues to lead by example when it comes to open innovation. The Innovation and Technology Commission, a part of Hong Kong’s government, promotes open innovation through its Innovation and Technology Fund which offers funding support for prototyping and deployment of ideas from the public.

Across Greater China and Hong Kong, HSBC has also been running several pre-accelerator programs, which allows them to stay connected with new, emerging fintech; resulting in new mobile features such as conversational banking, which is a combination of AI technologies from fintech startups such as gini, Clare.AI, and TNG Wallet.

Takeaway: Organizations should adopt open innovation and increased collaboration as a strategic approach to tap into the expertise of external partners and stakeholders, and drive innovation, growth, and competitive advantage.

3. Adopt Design Thinking to build and meet dynamic consumer needs

Many innovation initiatives fail due to a lack of structure and process when developing new services and products. This is where design thinking comes in. It is a powerful tool for fostering innovation by understanding user needs, questioning existing assumptions, reframing problems, and generating pioneering solutions that can be prototyped and tested. Design thinking methods are well implemented by firms, especially in Hong Kong, and twice as likely to use this tactic for innovation compared to their Western counterparts (38% vs 19%).

For instance, MTR Corporation, which operates Hong Kong’s mass transit railway system, uses design thinking to improve the passenger experience. They extensively use data analytics to understand passenger behavior and use that information to redesign their stations and services. The result is a world-class transport service that is efficient, convenient, and customer-friendly.

Takeaway: By adopting design thinking, businesses can put the customer at the center of innovation, thereby driving the creation of truly user-centric products and services.

4. Foster a Culture of Innovation and Intrapreneurship

The culture of a company is often an overlooked aspect of innovation. However, it is a critical component for fostering innovation and intrapreneurship. An innovation culture allows employees to take risks, learn from failure, and pursue their ideas. This culture is not only prevalent in startups but also found in many successful organizations in Greater China and Hong Kong.

For example, Tencent, one of China’s biggest tech companies, has a culture of innovation and intrapreneurship, which is credited for its success. Tencent allows its employees to pitch innovative ideas, and if approved, they are given resources to develop them. This approach has led to the creation of many successful products, including the super-app WeChat.

Takeaway: Encourage an environment where employees aren’t afraid to take calculated risks, iterate, and learn from failures. This will cultivate a culture of intrapreneurship and lead to groundbreaking innovations.

Conclusion

In conclusion, companies in Greater China and Hong Kong are capitalizing on innovation to build business resilience. By adopting practices such as a lean startup mentality, open innovation, design thinking, and fostering a culture of innovation and intrapreneurship, these companies are not just surviving in the current VUCA world, but also thriving. The lessons learnt from these companies are universally applicable and can be adopted by businesses worldwide to drive innovation and resilience in this rapidly changing world.

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