Innovation in Latin America: why does the same formula not give the same results?

September 5, 2024

EY Law - Innovation is a word that frequently comes up when we refer to changes and evolution. In Latin America, in particular, the term innovation is often linked to the adoption of new technologies and the process of digital transformation. From the simplest, such as communication between collaborators, to more complex issues, such as interaction with clients or resource optimization, companies always seek to accelerate their transformation strategies through technology, with the aim of achieving a competitive advantage that allows them to reach the next level.

However, there is no formula or manual that guarantees that by applying certain technology we will innovate and achieve positive results for the company. Few companies and few leaders understand that in the equation of innovation not only technology plays an important role, but also strategy, processes and, of course, human beings.

In fact, according to the EY Digital Maturity Study, the challenge that business leaders face now is that, generally, they are not clear about where to go next or how to include digital technologies in the strategy to really generate value in the company. In addition, there are some limiting factors, such as the fact that 65% of companies consider that they do not have the necessary skills to undertake digital transformation.

That is why in this article I present four variables that companies in Latin America should consider to increase the probability of success of their innovation strategies, beyond technology.

1. Is collaboration the new innovation?

There is a saying: "Two heads are better than one." And it is that in collaboration, ideas often emerge that, with the support of the team, end up becoming action plans thanks to the contribution of each member. But to do so, before starting to work on a project, it is essential to know our skills, understand what we contribute from our role and clearly define the common goal we want to achieve. On many occasions, several members of the same team want to act as leaders and take the initiative without first agreeing on what each one should do and how they should do it.

To resolve this inconsistency, Latin American organizations must develop a model that fosters connectivity and creativity, providing a safe space in which new ways of working can emerge that drive innovation, commitment and results. They must also find a balance between delegation, empowerment and ownership.

2. The human approach is the key

The innovation journey is neither linear nor simple. The complex factors that influence the success or failure of these types of strategies have their origin in human behaviour. Therefore, in this process it is essential to have the right people: professionals who are aware of their capabilities and what is expected of them, who work in a coordinated manner, valuing and taking advantage of the perspectives and experiences of each person involved.

Transparency and the free exchange of ideas are crucial to achieving successful results, always based on a strategy that prioritizes the human factor by understanding and accepting the different emotions that arise in the interaction. With the right guidance, it is possible to increase team performance and maximize the potential for success.

The human touch is impossible to replace. Qualities such as empathy, communication, interpersonal skills, among others, cannot be compensated by technology. A fusion of the latter with a motivated team, with clear roles and aligned to the vision and strategy of the organization, will help organizations achieve better results.

3. Embrace change

In a business context marked by transformation, it is essential for professionals to forge new paths to be more efficient. Many times, the tools are already available within the organization, but the great challenge is to overcome the pressure to do everything as quickly as possible to find an easier way to complete tasks.

To put this into perspective, at EY we have more than 35,000 technological tools and solutions developed by our teams from different parts of the world. Our challenge is to educate ourselves on the resources we already have as an organization.

In general, the most difficult part is challenging ourselves to change. We are almost always predisposed to continue with business as usual and do not want to go beyond it. Without a doubt, this attitude will make the difference between the organizations of the future and those that will be left behind in the past. Instead of fearing change, we must face it with discipline and awareness that we are trying to be different and at the forefront of the business world. To be truly innovative, we must lose the fear of dreaming big.

4. See the bigger picture

When you want to implement something new, whether it is technology, digital or cultural transformation, to mention a few examples, it is necessary to take into account various variables, from macro to micro and specific to the sector and the company. For example, according to the study Challenges and trends for companies in Latin America by EY (2023), economic stability, political uncertainty, inflation and the exchange rate are some of the 10 main external challenges for companies in the region. Of course, in some cases, they are more critical than in others, and this will affect, to a certain extent, the prioritization of objectives. Markets where there are more marked macroeconomic risks will have different investment and execution priorities.

One technology, different realities and ways of implementing it

There are many technologies that can be implemented for innovation processes, however, the most in-demand technologies in one company are not necessarily the best for another. The sector, size of the organization, and other factors largely determine the formula that should be used in each case.

One of these factors is the context of the country: it is always necessary to take into account the levels of development of each nation, local regulations, security considerations, consumer or buyer preferences, among others. A more developed market may have companies focused on machine learning, while others are just working on their migration to the cloud or the use of analytics. Identifying whether companies have people trained to take full advantage of each technology’s potential is also a challenge that each country faces to a different extent.

Even a more developed market will have a different way of consuming or preferences than other markets; therefore, the key is to always keep in mind the various factors that may influence the development of our projects or the achievement of objectives. These are, roughly speaking, some reasons why the same formula does not give the same results for everyone, everywhere or at any time.

Today, more than ever, companies need to invest in innovation focused not only on the client, but also on the collaborator and on technology as an opportunity to grow. In this scenario, it is important that this process can take place hand in hand with advisors who combine knowledge and experience in the subject.

EY’s innovative approach in Latin America combines the experience of more than 24,000 professionals with vast experience helping companies from different contexts achieve their innovation objectives in a sustainable way. It is from this collaboration that EY professionals question, challenge, invent and shape innovative business models built to measure together with the client.

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