Fostering a culture of innovation in digital transformations

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One of the key characteristics of digital transformation is fostering a culture of innovation – communications service providers (CSPs) need to innovate to keep up with the rapidly evolving digital world. Traditionally that involves having a massive research and development (R&D) division, but nowadays all you really need is a dedicated team with the right mindset and a simple plan for creating value.

That was some of the wisdom shared by Dr. Sharlene Thiagarajah, CEO, Telekom Research & Development (the R&D spinoff of Telekom Malaysia) at Digital Transformation Asia in Kuala Lumpur.

From left: Joann O’Brien – VP, Ecosystems & Labs, TM Forum and Dr. Sharlene Thiagarajah – CEO, Telekom Research & Development

Telekom R&D has an impressive track record of innovation – literally 100% of its projects have been adopted into Telekom Malaysia’s network, and its top five products have been commercialized in the market, Thiagarajah said. The secret to its success: a simple set of criteria on what kinds of projects the division pursues.

“We just needed to do three things: focus on the stuff that would save money, focus on the stuff that will make money, and then focus on stuff where you can dream big,” she said.

That said, even ‘dreaming big’ has to be focused on projects that will potentially serve the company’s bottom line and make sense to the board. Thiagarajah said that when she took on the role as CEO in 2016, she understood that Telekom R&D couldn’t remain a cost center.

“If we remained as a cost center, life was going to be really difficult, having to justify every business planning cycle for budgets and getting funding for growth,” she said.

At the same time, she added, it was also important to change the board’s mindset towards R&D. “It was a mindset shift about sharing the vision of the future. It’s about saying that if you do not go into this path, it’s not going to be a sustainable business.”

That also meant making clear that Telekom R&D’s mandate was to be a business enabler whose success isn’t strictly measured by how much money it helps the company earn or save. “It’s not about direct revenue or cost reduction – it’s about helping the business. So we needed to have a new measure of success and innovation.”

Ironically, despite Telekom R&D’s 100% project success rate, success is not mandated, she said.

“It’s not obligatory to have everything succeed, and there will be some things that work but won’t get integrated into the network right away because there are a lot of processes to go through,” she explained. “We identify what we will get on the network  that year. That will be our measure of success, and then the rest can spill over to next year.”

She clarified that while failure is an option, it depends on how you define “failure”.

“It’s really about implementing an agile methodology, looking at each juncture and thinking about what could have been done better,” she said. “It’s about going back to your sponsor and saying, ‘I think this this particular path is not working, so we’ll try a new path to solve the problem’.”

Thiagarajah added that failure could also be defined as a project that works but doesn’t have a significant enough impact, “because value creation or impact is our measure of success.”

For CSPs that don’t have the budget or resources that Telekom R&D has, Thiagarajah said all you really need is a dedicated team and a clear division of responsibilities. “Let the telco teams focus on their core business, which is delivering the infrastructure and let the subsidiaries or the innovation team focus on things that since on top.”

This article was first published on TM Forum’s Inform

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