Global Footprint
Elisa Holland
Managing Director and Head of Innovation Labs, KPMG Ignition
elisaholland@kpmg.com
Contact Us
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. KPMG LLP does not provide legal services.
The information contained herein is not intended to be “written advice concerning one or more Federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.
© 2025 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.
Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.
Legal
Accessibility
Cookie Preferences
Privacy
Do Not Sell or Share My Personal Information
Refined problem statement
Initial problem statment
How we work with our clients
Solution development
Story of the solution
Closing commitment
~ BRIAN MISKE & ELISA HOLLAND
It starts and ends with people
HUMAN SIDE OF INNOVATION
The 5 Mys Framework
By truly understanding that humans are multidimensional individuals, organizations can contemplate solutions that will genuinely resonate. Employees will feel understood and valued, and appreciate addressing their unique needs. Frameworks such as the “5 Mys” provide a structured approach to gain this comprehensive multidimensional human view, considering
key attributes that can unlock their underlying motivations.
This deep human understanding becomes the foundation for crafting environments that facilitate authentic innovation and creativity. It enables organizations to move beyond generic, one-size-fits-all solutions and instead deliver innovations that are connected to their customer and employee’s reality. By putting empathy and human centricity at the heart of their approach, businesses can forge stronger emotional connections, build enduring loyalty, and ultimately drive transformative growth.
Overall framework
The old paradigm will no longer sustain growth
A new paradigm is required
In today’s market, human creativity is the competitive advantage that sets companies apart. As businesses rediscover the power of human ingenuity, they recognize that sustainable growth not only comes from technology, but also from the creative application of these tools.
Through our research, we have identified seven dimensions rooted in human characteristics and human-centered design principles that drive the human ingenuity that ultimately distinguishes successful organizations.
From tech-centric to Human-centric
Recognize the differentiating power of individuals augmented by tech
Connected leadership
Empower meaningful and inclusive discussions
The power of inclusive thinking
Nurturing unique contributions of
individuals with a dynamic process
Art of collaboration & synergy
Exchange perspectives and work together to achieve synergistic outcomes
Power of individuals
Promote a supportive environment that encourages individuals to be part of a broader innovative ecosystem
Changing nature of work
Embrace change and adapt using human intuition and foresight
Design thinking and storytelling
Leverage the foundations & core principles of creativity
The seven dimensions of human-side innovation
Technology should amplify human capability, not replace it. While AI and automation are powerful tools, they serve their highest purpose when designed to enhance human creativity and decision-making rather
than substitute for it.
From tech-centric to
human-centric
Organizations must shift from asking “What can technology do?” and “How can we implement AI?” to “How can technology enable, empower, and drive efficiency for our people?”
A recent study from Forrester indicated that organizations focused on human-centric experience can expect significant ROI in terms of business value, with every $1 invested in user experience resulting in a return of $100(2). This underscores the profound impact of putting human needs at the center of technological innovation.
The most successful organizations create feedback loops between their human workforce and technological systems. They recognize that human insight is crucial for training AI systems, while AI can help humans make better decisions and focus on higher-value activities that require emotional intelligence and complex problem-solving. The absence of human intelligence and experience leaves a gap in the
analysis of the data.
Why do you need a human in the loop?
While generative AI (GenAI) enhances individual creativity, it tends to reduce the collective diversity of novel content, which can lead to significant business risks, such as decreased market differentiation and dilution of a brand’s unique voice.(5) Furthermore, GenAI must be utilized within its
capabilities to drive positive outcomes.
A study from MIT Sloan highlights that when used within its areas of competency, GenAI can boost worker productivity by up to 40 percent. However, when AI is used outside those boundaries to complete a task, it can result in a 19 percent drop in performance.(6)
Despite AI’s advancements, it lacks the human ability to pioneer groundbreaking solutions, as it depends on pre-existing data and learned probabilities. For example, while GPT-4.0 demonstrated remarkable capability in simulating CEO-level decision-making, it cannot wholly replace the human touch essential for navigating complex, human-centric markets.(7) Instead, AI can substantially augment strategic planning and reduce costly errors by automating data-heavy analyses and modeling intricate scenarios, enabling human leaders to concentrate on strategic judgment, empathy, and ethical decision-making.
Much like Deep Blue’s role in enhancing human expertise in chess, AI, when integrated effectively, can make decision-makers and professionals more creative and insightful by continuously keeping the human element in the loop to identify GenAI’s blind spots. Keeping the human in the loop drives improvement of both the human and nonhuman elements, accelerating
positive outcomes.
1
35%
45%
28%
22%
A global financial services firm implemented an AI-assisted model where human agents remained the primary point of contact, supported by AI that provided real-time customer insights and next-best-action recommendations.
improvement in customer satisfaction scores
increase in first-call resolution
reduction in
average
handle time
improvement in employee satisfaction scores
Key questions
For your leaders
How does your organization balance technology adoption with human-centered design principles? When implementing new technology, how do you ensure it actually makes your people’s work better, not just faster
or cheaper?
What processes do you have in place to ensure technology serves human needs rather than driving them?
How do you measure the human impact of your technology investments?
How does your technology investment strategy balance short-term efficiency gains against long-term human capital development, and what metrics are you using to evaluate this balance?
What governance frameworks are in place to ensure your AI and automation initiatives enhance rather than diminish your human workforce’s competitive advantages, and how is this being measured in terms of both financial and nonfinancial outcomes?
How are you assessing and mitigating the risks of over-automation versus under-innovation in your human workforce, particularly in areas critical to your future competitive advantage?
For your board members
The role of connected
leadership
2
A leading logistics company recently opened an advanced fulfillment center, powered by AI, revolutionizing logistics
to benefit employees and customers. Central to this
facility is a state-of-the-art multilevel containerized inventory system designed to enhance speed and safety.
Efficiency improvement:
The company made significant strides in improving efficiency
by reducing fulfillment processing times by 25 percent. These improvements also led to greater shipping accuracy and increased the range of products available for same-day
and next-day delivery.
Enhanced employee experience:
The introduction of robots and AI-driven systems for repetitive and physically demanding tasks marked a substantial change. This technology reduced physical strain on workers, allowing them to engage in more complex and engaging tasks.
Safety and ergonomics enhancements:
Safety was a principal concern, addressed by having robots manage heavy lifting, significantly reducing injury risks. The company aimed to build on a 30 percent improvement in safety by enhancing ergonomics and decreasing the amount of heavy lifting required in the facilities.
Employee satisfaction:
To retain and upskill their workforce, the company offered free certification for new skilled roles. Additionally, they provided mechatronics and robotics apprenticeships, offering wages
up to 40 percent higher than entry-level positions.
Why it matters:
By integrating advanced technology with a strong focus on employee development, the company improved operational efficiency, enhanced workplace safety, increased job satisfaction, and retention. When you invest in both
the technology and the human element you unlock
comprehensive organizational growth.
Connected and inclusive leadership is essential for driving successful organizational transformations. While innovative ideas, business models, and technology are important, it is the human side of any transformation effort that is critical. People are the heart of companies and the driving force behind transformations. Their buy-in and adoption of any change
will make or break the future of the organization.
Inclusive leadership aims to generate a sense of psychological safety stemming from the top of the hierarchy, which creates an environment in which varied perspectives are actively sought out and valued in decision-making processes.(8a) Connected leadership emphasizes the importance of emotional intelligence in management; deeply understanding and empathizing with the thoughts and feelings of your team members.(8b)
Working with our clients, we have found that leveraging insights from inclusive perspectives on problems that need to be solved—enablers and barriers to desired behavior shifts, and what “good” looks like for the outcome of a transformation —allows leadership teams to create a cohesive path
to a future-state vision:
Communicating value: Align on a strategic narrative as the foundation for communications going forward. The narrative should summarize the value proposition in a compelling way and serve as a tool for leaders to communicate consistently about the vision.
Enhance impact:
Design a portfolio approach to bring a breadth of experience and relevant expertise to influence and deliver impact on the most probable opportunities.
Continuous learning:
Demonstrate an understanding of and ability to apply a growth mindset to creatively drive value in the changing environment and market.
Collective success:
Define a strategy of engagement across multiple levels to build
a portfolio of choice and deliver growth.
Connected and inclusive leadership are both paths to creating successful teams, and both leadership styles require leaders to develop capabilities in active listening, cultural intelligence, and the ability to facilitate productive dialogue across different viewpoints in order to create a culture of open communication, respect, and inclusivity that values every individual’s ideas, opinions, and feedback. To create inclusive, connected teams, leaders need to balance the emphasis on collaboration and achieving shared goals while still recognizing and rewarding
individual success.
Harvard Business Review identifies six key behaviors that inclusive leaders share: visible commitment, humility, awareness of bias, curiosity about others, cultural intelligence, and effective collaboration.(9)
The study found that inclusive leadership increases work attendance by almost one full day per year per employee. Similarly, connected leadership emphasizes the need for leaders to build robust networks and relationships, enhancing collaboration and information flow within the team.
The most effective inclusive leaders recognize that innovation often comes from unexpected sources and actively work to remove hierarchical barriers that might prevent good ideas
from emerging. They create formal and informal channels
for feedback and ensure that credit for innovative ideas
is properly attributed.
– Sandy Torchia, Vice Chair of Talent and Culture, KPMG LLP (US)
Likewise, connected leadership focuses on building the Connectedness Quotient (CQ),(10) which involves connecting individuals to their personal values and talents (I), fostering strong workplace relationships (We), and aligning with the company’s mission and vision (It).
A recent KPMG LLP study found that fostering workplace friendship is critical to employees’ mental well-being and job satisfaction in today’s digitally driven work environment, with 83 percent of those with workplace friends feeling more engaged at work at 81 percent reporting greater job satisfaction. In line with the foundation of connected leadership, friendships formed at work are not just incidental but essential for creating a positive and thriving workplace culture—creating a space where people feel comfortable innovating, sharing new ideas, safe space failing and testing.
The key differentiator in any successful organizational transformation is leading people through it. As one CEO of an industrial manufacturing company shared, “You need to win the hearts and minds of your people. People need to feel inspired and valued. Culture can kill a merger no matter how good it looks on paper.”
Inclusive and connected leadership together drive this by combining a commitment to diversity, equity, and inclusion with enhanced communication and collaboration, ultimately leading to a more innovative and effective organization.
"
By finding new, creative ways to foster and support friendship at work, employers can create an environment where individuals feel valued, motivated, and truly connected to the organization.
Innovation often
comes from
unexpected
sources.
Good leaders actively work
to remove hierarchical barriers
that might prevent good
ideas from emerging.
Tech Industry Innovation
A leading technology company implemented an inclusive leadership program focused on middle management, with the
following components:
+ Quarterly reverse mentoring sessions where junior team members mentor senior leaders
+ “Innovation Hours” where anyone could pitch ideas directly to executive leadership
+ Cross-functional innovation teams with mandatory
diverse representation
Results after 18 months included:
40%
25%
65%
30%
increase in patent applications from
previously underrepresented
groups
improvement in employee
engagement scores
increase in
employee-driven
innovation initiatives
reduction in voluntary
turnover among
high-potential
employees
EXAMPLE IN ACTION:
How do you measure and incentivize inclusive behaviors among your leadership team, particularly in the context of innovation initiatives?
What specific mechanisms have you put in place to ensure inclusive perspectives inform strategic decision-making at all levels?
How do you develop and support middle managers in becoming more inclusive leaders, and what metrics do you use to track their progress?
Key questions
For your leaders
How does your board evaluate whether the executive team’s approach to inclusive leadership is driving measurable innovation outcomes and sustainable competitive advantage?
What governance mechanisms ensure you’re effectively managing the risks and opportunities associated with your inclusive leadership strategy, particularly in relation to talent retention and innovation capacity?
How do your capital allocation decisions support the development of inclusive leadership capabilities that drive innovation, and what is the demonstrated return on these investments?
For your board members
The power of
inclusive thinking
3
In today’s hyperconnected world, organizations aren’t just acting as standalone enterprises anymore or even enterprises within ecosystems; They are operating as an ecosystem of ecosystems, with each functional area establishing its own stakeholder relationships, people, cultural norms, technology systems, and processes to meet its unique jobs to be done. The health, efficiency, and function of the enterprise are contingent on the interaction and interoperability of these ecosystems, which can be thought of as interlocking gears that turn together. Embracing diversity within this complex system is crucial for driving business results and fostering innovation.
This isn’t just a reflection of core values; it is a key driver business result.(11) Organizations with truly inclusive cultures demonstrate measurably better outcomes across innovation capacity, financial performance, and employee engagement. When companies foster inclusive cultures, they can see up to higher rates of innovation by around 20 percent and a near-equivalent increase in revenue.(12)
True inclusivity goes beyond basic demographic representation to create environments where different perspectives actively shape decision-making and innovation. Our research indicates that cognitive diversity—the inclusion of people who think differently and have different experiences—is particularly crucial for innovation.(13) Paradigm shifts toward recognizing the multifaceted nature of diversity—spanning backgrounds, geographies, employment histories, and skills—demonstrate that true diversity is more than just a PR initiative.
Teams with a range of divergent thinking are better equipped to identify emerging market opportunities, anticipate potential disruptions, and create solutions that resonate across different customer segments. This cognitive diversity becomes a powerful and sustainable source of competitive advantage as organizations face increasingly complex challenges that require novel approaches.
The journey toward harnessing the full power of diversity pivots on the concept of “culture add” rather than merely fitting into an existing organizational culture. The shift from seeking “culture fit” to valuing “culture add” represents a deeper understanding of diversity’s potential. The book “The Neurodiversity Edge”(14) covers a range of prevalent cognitive biases that obstruct attempts to embrace diversity of all kinds, and culture fit wears most of them in one form or another among its disguises. Recognizing and nurturing the unique contributions individuals can bring to an organization can open up new avenues to success. This approach requires organizations to possess a mature, transparent, and evolving set of values and recognition that cognitive diversity and inclusion are not static goals but dynamic processes that reflect an ongoing commitment
to growth.
Only with a clear understanding of their foundational values
can organizations effectively leverage inclusion
as a strategy for growth and innovation.
Technology
should amplify
human capability,
not replace it.
While AI and automation are
powerful tools, they serve their
highest purpose when designed
to enhance human creativity
and decision-making rather
than substitute for it.
Financial services transformation
EXAMPLE IN ACTION:
A global technology manufacturer transformed its product development process through diversity:
+ Created diverse innovation teams combining different disciplines, backgrounds and thinking styles
+ Implemented blind review processes for new ideas
+ Established global innovation councils with diverse representation
+ Developed mentorship programs pairing different backgrounds and experiences
55%
35%
40%
48%
increase in new
patent applications
increase in market
share in new segments
reduction in product
development time
improvement in product sustainability metrics
True diversity
goes beyond
Engineering Innovation Initiative
EXAMPLE IN ACTION:
basic demographic
representation to create
environments where
different perspectives
actively shape decision-
making and innovation.
Key questions
For your leaders
How does your organization’s approach to cognitive diversity create measurable competitive advantages that your competitors cannot easily replicate?
What evidence demonstrates that your investments in building an inclusive culture are accelerating innovation outcomes and creating long-term shareholder value?
How are you ensuring your governance structures and succession planning actively cultivate cognitive diversity at all levels, particularly in positions that drive innovation and strategic decision-making?
For your board members
How does your organization actively seek out and incorporate inclusive perspectives?
What metrics do you use to measure the impact of cognitive diversity and inclusivity on innovation?
How do you ensure inclusive perspectives are heard and valued in decision-making processes?
The art of collaboration and synergy
4
Achieving effective collaboration in modern organizations is not as simple as a return to office mandate. It’s a multifaceted effort that requires a holistic approach addressing the what, how, where, and why of working together. It begins, as we discussed above, with laying the groundwork: creating an inclusive and diverse environment where every voice is heard and valued, nurtured by connected leadership that encourages open communication and participation.
Building on this foundation, organizations must provide the right structure and tools to facilitate collaboration. This involves investing in both physical and digital spaces that enable seamless teamwork and interaction. While technology plays a crucial role in enabling collaboration, successful organizations recognize the importance of selecting and implementing tools that align with human behavior and preferences. Statista’s 2023 review of collaboration tools usage highlights a concerning trend: despite the rise of digitization at work, barriers to collaboration are increasing.(15) To overcome these obstacles, it is essential to choose technologies that enhance rather than hinder collaborative efforts.
This structural support should then be complemented by cultural alignment to guide the what and how of collaboration. Methodologies like design thinking offer a framework for teams to effectively tackle challenges and generate innovative solutions together, fostering a culture of creativity, experimentation, and continuous improvement.
Lastly, the why of collaboration cannot be overlooked. To truly harness the power of collaborative work, organizations must create incentives and rewards that promote both individual and collective achievements. By understanding what genuinely motivates people and igniting their enthusiasm for working together, organizations can cultivate a thriving culture of collaboration. KPMG LLP’s analysis reinforces this notion, revealing that organizations that strike a balance between structured and unstructured interaction opportunities are
more likely to solve work-related problems and generate
fresh ideas.(16)
A global pharmaceutical company redesigned its R&D process around collaborative innovation:
+ Created cross-functional “innovation pods” combining scientists, clinicians and commercial experts
+ Implemented a digital collaboration platform that connected researchers across global locations
+ Established an open innovation program with academic and industry partners
50%
45%
3x
60%
reduction in early-stage research timeline
improvement in
research efficiency
increase in viable drug candidates
increase in patent filings
It begins with
laying the
groundwork:
Pharmaceutical Research Innovation
EXAMPLE IN ACTION:
creating an inclusive
and diverse environment
where every voice is
heard and valued.
Key questions
For your leaders
How does your investment in collaborative infrastructure and culture translate into measurable competitive advantages and risk mitigation?
What evidence demonstrates that your organization’s collaboration strategy is accelerating innovation outcomes
and creating sustainable
stockholder value?
How do your governance structures ensure that collaboration initiatives remain aligned with strategic objectives while managing
associated risks?
How effectively does your organization facilitate cross-functional collaboration?
What barriers exist that prevent effective collaboration across teams or departments?
How do you measure and reward collaborative innovation?
Design thinking and storytelling
to build an innovation culture
5
Storytelling has been a part of our society for thousands of years. For companies, branding is storytelling; organizations that have a strong, cohesive brand create narratives that connect innovation initiatives to broader purpose and meaning. That branding is two-fold, with the shared narrative internally forging similarly powerful bonds as an external brand. Creating and aligning on this clear and compelling strategic narrative that emphasizes the organizations’ purpose, vision, shared goals, value offered, and the opportunities the organization seeks to pursue in a manner that promotes alignment amongst key stakeholders is critical.
Neuroscience research has found that consistent branding efforts can, over time, create neural pathways that tie brands to cherished memories. Organizations that excel at creating strong brands that appeal to multiple aspects of human understanding of the world, especially senses and emotions, are more likely to create value and stay at the forefront of consumers’ minds. Narrative storytelling is an especially effective way to do this—a study by Origin/Hill Holliday found that the addition of any type of story to a product listing increased the perceived value, sometimes up to 64 percent(17), and humans are uniquely capable of understanding, storing, and remembering stories compared to other forms of communication.(18)
Design and branding are inherently linked. Good design—human-centered, attractive, and innovative—helps build and reinforce an organization’s brand, ultimately becoming a storytelling device in and of itself. KPMG analysis(19) found 54 percent of customers are willing to pay more for good design. In the age of AI—among lingering hesitancies and delays in uptake(20)—companies looking to innovate and harness the power of AI must promote the future of work the way they would a product or service. Creating memorable, motivating narratives about using AI and designing AI tools to align with current brand identity is the only way to help stakeholders envision future possibilities and understand the impact of change while maintaining positive brand associations.(21) While AI dominates much of the business world, tapping into uniquely human stories sets innovative companies apart.
Our best experiences become stories. And our best stories become our expectations.
It’s the spark that happens when someone feels truly seen, truly valued, truly empowered. That’s
not just innovation.
That’s lightning in a bottle.
A major retailer used design thinking and storytelling to transform its customer experience:
+ Conducted extensive ethnographic research to understand customer pain points
+ Created customer journey maps and personas shared across
the organization
+ Developed compelling narratives around customer success stories
+ Used storytelling to align 200,000+ employees around new experience vision
45%
32%
28%
23%
increase in customer
satisfaction scores
reduction in customer complaints
increase in viable drug candidates
increase in patent filings
Design and
branding are
inherently
linked.
Retail Experience Transformation
EXAMPLE IN ACTION:
Good design—human-
centered, attractive,
and innovative—helps
build and reinforce an
organization’s brand,
ultimately becoming
a storytelling device
in and of itself.
Key questions
For your leaders
How does your board assess whether the organization’s design thinking approach is creating sustainable competitive advantages rather than just short-term customer satisfaction?
What evidence demonstrates that your organization’s stories and experiences are building lasting stakeholder relationships that translate into market leadership?
How do you ensure your governance frameworks encourage bold, human-centered innovation while maintaining appropriate risk oversight?
For your board members
How deeply is design thinking embedded in your innovation processes?
What role does storytelling play in your innovation initiatives?
How do you capture and share innovation success stories across your organization?
As organizations rapidly invest billions in digital transformation, many are discovering that technology alone cannot drive meaningful innovation. The business landscape finds itself in an unprecedented paradox. While AI and automation promise to revolutionize every aspect of work, the key differentiator for successful innovation increasingly lies in human factors—creativity, curiosity, emotional intelligence and collaborative problem-solving. Not surprisingly, this is why workforce and culture issues represent the top hurdles for transformative progress—engaged, excited employees are vital to enabling new technology to truly help transform organizations.(1)
Rather than starting with technological capabilities or business constraints, this approach begins with deep empathy for human needs, behaviors, and pain points.
This requires a different perspective, where organizations view customers and employees as multidimensional actors rather than
a simple sales target or resource. It involves diving deep into their world, observing their behaviors, attitudes, and beliefs to uncover insights beyond what they can express directly. Surfacing and serving these unarticulated needs can forge a deeper bond that crafts intangible or tangible value to their lives and businesses.
Design thinking and human-centered design represent a fundamental shift in how organizations can approach
problem-solving and innovation.
The most powerful catalyst for innovation isn’t found in algorithms or automation, but in the uniquely human capabilities of creativity, curiosity, empathy, and collaboration.
A major e-commerce company’s implementation of AI and machine learning
EXAMPLE IN ACTION:
humans would begin to abandon the pursuit of chess mastery because they’d ‘never be as good as a computer.’
In 1997, when the computer program Deep Blue beat the invincible grandmaster Gary Kasparov in chess, many feared that
As technology becomes more accessible and affordable, it is no longer
a sustainable source of competitive advantage. Organizations that rely solely on technological advancements risk losing their edge as these innovations become standard across industries. In this new landscape, true differentiation lies not in the technology itself, but in the uniquely human capabilities that enable its creative and empathetic application.
"
– John Diebold, author of "Automation" (1952)
At various times, usually at the depth of a recession, people have said it was going to be horrible from here on because of automation. But a couple of years later, it’s all forgotten. Certain types of jobs die, and others grow. That is the sign of
a healthy economy.
Embracing the changing
nature of work
6
The World Economic Forum’s Future of Jobs report indicates that employees will need reskilled and continuously evolve at a rapid pace to meet technology changes in today’s climate.(22) Organizations will need to create flexible, adaptive
work environments.
This transformation of work upskilling represents one of the most significant strategic challenges facing organizations today. Beyond the tactical decisions about hybrid work policies or technology platforms lies a fundamental reimagining of how value is created and captured.
Traditional organizational structures, built for stability and control, are giving way to fluid networks designed for adaptation and innovation. This shift demands new approaches to leadership, measurement and value creation. Organizations must navigate complex tradeoffs between efficiency and resilience, standardization and flexibility, and global reach and local relevance. The stakes are high: those who successfully adapt to this new paradigm will create sustainable competitive advantages, while those who cling to outdated models risk obsolescence in an increasingly dynamic business environment.
The KPMG Future of Work analysis identifies four critical elements for successful work transformation, captured in the FLOW framework:(23)
Fulfill human centricity by approaching work through a human-centric lens
Leverage circulation by enabling movement to circulate the right skills and data at the right place and times
Organically augment through integrating organic technology that supports the potential for seamless work augmentation
Weave in continuity across all flows to minimize risk
Fluidity as the new paradigm
As the complexity of the business landscape increases, giving way to fluidity, organizations must embrace agility in how they operate.
Our research shows that organizations must balance employee and organizational needs in the context of the modern office, which often feels like a moving target.(24)
The most effective organizations recognize that the changing nature of work isn’t just about location flexibility—it’s about reimagining how work gets done.
A global consulting firm implemented a comprehensive
work transformation:
+ Developed AI-powered work allocation system matching talent to projects
+ Created flexible work arrangements with core collaboration hours
+ Implemented skills-based career paths replacing traditional hierarchies
+ Established digital-first collaboration practices
35%
67%
42%
28%
improvement in
project delivery efficiency
increase in employee
satisfaction with work arrangements
reduction in real
estate costs
reduction in
carbon footprint
Beyond the
tactical
decisions
Professional Services Transformation
EXAMPLE IN ACTION:
about hybrid
work policies or
technology platforms
lies a fundamental
reimagining of how
value is created
and captured.
Key questions
For your leaders
How do your capital allocation decisions and strategic investments reflect the fundamental transformation of work, rather than just incremental improvements to existing models?
What metrics and governance frameworks are you using to evaluate management’s effectiveness in balancing short-term productivity with long-term workforce sustainability?
How are you assessing whether your organization’s approach to work transformation is creating sustainable competitive advantages rather than just keeping pace with industry trends?
For your board members
How is your organization adapting to the changing expectations of the workforce?
What steps are you taking to prepare for the future
of work?
How do you balance flexibility with productivity in your work models?
Unleashing the transformative power of individuals
7
The innovative potential of each individual is often constrained by organizational structures and processes. Cutting-edge organizations are creating new mechanisms to identify, support and amplify individual innovative capabilities, regardless of role or level.
Modern organizations simultaneously need structure to operate efficiently and flexibility to innovate effectively. Leading companies recognize that innovation doesn’t follow organizational charts or reporting lines—it emerges from the collision of different perspectives, the freedom to experiment and the psychological safety to take calculated risks. These organizations are moving beyond traditional suggestion boxes and innovation labs to create what we call “innovation ecosystems” —environments where ideas can flow freely across hierarchies, departments and traditional boundaries. They understand that every employee, from the front line to the C-suite, carries unique insights shaped by their direct experience with customers, processes and problems. By removing structural barriers and creating protected spaces for experimentation, these organizations tap into the full spectrum of human creativity and problem-solving capability.
KPMG’s analysis of successful innovation programs identifies key elements that enable individual innovation:(25)
• Design thinking methodologies
• Storytelling capabilities
• Inclusive leadership practices
• Cross-functional collaboration opportunities
MIT Innovation Research indicates that organizations effectively empowering individual innovators see significantly higher returns on innovation investments.(26) The most effective organizations also recognize that innovation isn’t limited to R&D or product development teams—it can come from anywhere in the organization. They create systems to capture and develop ideas from all employees, providing resources and support to turn promising concepts into reality.
ANALYST DAY 2025
A major energy company uses the Kickbox program to host an innovation platform to manage new ideas, access resources, and seamlessly update their program leads on the projects
they’re exploring.
A technology company has a similar “Value Creation Portal” that allows every employee to imagine and execute ideas, and client executives to review them. Rewards are provided for impactful ideas, and the company maintains that technology is crucial
to fostering an innovative environment.
A major medical manufacturer teamed up with a home lifestyle brand to integrate technology and real-world space into an innovation ecosystem that supported patients and healthcare workers. They explored invisible ecosystems, in which technology solutions are so fully integrated into the space that they have no overt interface.
Tech-enabled innovation ecosystems
EXAMPLE IN ACTION:
A global manufacturing company implemented a comprehensive individual innovation program:
+ Created an innovation fund accessible to all employees
+ Established “innovation time” - 15% of work time for personal projects
+ Developed an internal innovation marketplace for sharing and developing ideas
+ Implemented innovation mentorship programs
180%
45%
Significant
25%
increase in employee-
generated improvement ideas
increase in employee
engagement scores
cost savings from employee innovations
reduction in
production waste
By removing structural
barriers
Manufacturing innovation program
EXAMPLE IN ACTION:
and creating protected
spaces for experimentation,
these organizations tap into
the full spectrum of human
creativity and problem-
solving capability.
Key questions
For your leaders
How do your organizational structures and governance frameworks balance the competing demands for operational efficiency and innovation freedom, and what evidence shows this balance is driving sustainable value creation?
What assurance do you have that your investments in individual innovation capabilities are creating strategic advantages rather than
just funding interesting ideas?
How does your talent strategy and succession planning reflect the need to identify and develop innovation leaders at all levels, not just in traditional R&D or product development roles?
For your board members
How does your organization identify and nurture innovative potential in individuals?
What support systems exist to help employees develop their innovative capabilities?
How do you recognize and reward individual contributions
to innovation?
Your culture is critical to unleashing the full potential of human ingenuity. People need to know that the organization wants bold disruption of the status quo. People need to see recognition and rewards for colleagues who are disruptors and risk takers. They need to know it’s safe to fail. Indeed, failure should be seen in a positive light—as a learning moment that helps you get closer to a goal.
The challenge ahead
The future belongs to organizations that can successfully blend human creativity with technological capability. The real challenge in innovation lies in the human dynamics of transformation—helping people see AI and other innovations not as a threat but as a powerful tool for their own growth and impact. As AI and automation continue to advance, success will not only depend on implementing new technologies, but also on creating environments where people feel empowered rather than endangered by these tools. The challenge for leaders is clear but complex: build organizations where technology amplifies human potential rather than simply automating existing processes, while actively addressing the very real fears and hesitations
that can silently derail transformation efforts. This
requires a fundamental shift in how we approach AI implementation—moving from a technology-first to a human-first mindset, where success is measured not just in automation metrics but in people feeling more capable, confident and creative in their roles.
A call to action:
The future isn’t about technology. It’s about people. And ironically, the more organizations that race ahead on the technology, the more people will matter. While this seems simple, it is the most critical part of understanding how to lead and grow into today’s climate.
While everyone else is racing to automate, digitize, and transform, they’re forgetting what makes a business truly unstoppable—the raw, untamed power of human potential. It’s the spark that happens when someone feels truly seen, truly valued, and truly empowered. That’s not just innovation. That’s lightning in a bottle.
At KPMG Ignition, we know and understand how to harness this. We’ve seen the magic of what happens when organizations unlock the human side of innovation. We’ve watched them outperform, outthink and outlast their competitors. Not because they had better technology or spent more on a transformation effort, but because they understood that in harnessing their greatest asset—their people —they could accelerate faster and more effectively.
The question isn’t whether you’ll transform.
The question lies in the how.
And while your competitors are busy buying the latest technology, you could be building something far more valuable—an organization where human potential and technological possibility create something extraordinary.
The door to that future is open. The only question is:
Are you ready to walk through it?
Contact KPMG Ignition. Let’s design the future together.
A comprehensive customer view
Understanding the complex underlying drivers of human decision-making has become exponentially more important as the disruption of the digital
age accelerates.
My motivation
Characteristics that drive behavior and expectations.
My
attention
Ways we direct
our attention
and focus.
My
connection
How we connect to devices, information and each other.
My
watch
How we balance the constraints of time and how that changes across life events
Case study: Eras of innovation
Despite past predictions about the end of human labor and usefulness, loss of lower-wage labor and complete transformation of the global economy, humans continue to play as vital a role in work as they have at the turn of the past two centuries, even if individual tasks vary.
New means of automation—and accompanying fear of job loss and career destruction—have come in waves for decades, if not centuries. One thing that has changed, however: the pace of automation and adoption of new technology.
My
wallet
How we adjust our
share of wallet across
life events.
Technology
on its own
Productivity loss
Content similarity
Decline in employee engagement
Faster
Cheaper
1
2
3
4
5
6
7
1
2
3
1
2
3
1
2
3
1
2
3
1
2
3
1
2
3
1
2
3
1
2
3
•
•
•
•
1
2
3
•
•
•
•
In the fluid future,
leaders and
organizations
must flow.
Weave
in continuity
Weave
in continuity
Fulfill human
centricity
Leverage
circulation
Organically
augment
1
2
3
1
2
3
1
2
3
The innovation paradox: Leading with humans in the age of AI
When everyone has AI, humans will be your most powerful technology
In an era dominated by artificial intelligence (AI) and digital transformation, organizations are racing to adopt the latest technologies in pursuit of innovation.
Foreword
Yet many are missing a fundamental truth: the most powerful catalyst for innovation isn’t found in algorithms or automation, but in the uniquely human capabilities of creativity, curiosity, empathy, and collaboration.
As we stand at the intersection of human potential and technological advancement, successful organizations need to shift from viewing innovation through a purely technological lens to understanding and nurturing its deeply human dimensions.
These deeply human dimensions manifest in ways that technology cannot replicate: the ability to form emotional connections that drive meaningful change; the capacity to navigate ambiguity and make intuitive leaps; and the power to bring diverse perspectives together to solve complex problems. They include our innate drive to explore and experiment, our ability to see potential in others and in future possibilities, and our fundamental need to solve problems together.
Research shows that while technology can process information at unprecedented speeds, it cannot match humans in adapting to novel situations, building trust-based relationships, or generating the kind of breakthrough insights that come from diverse life experiences and perspectives.
Organizations that truly understand this are investing in creating environments where these human capabilities can flourish. They’re designing work spaces and processes that encourage spontaneous collaboration, developing leadership approaches that cultivate psychological safety, and building cultures that celebrate both successful innovations and valuable failures. Most importantly, they recognize that in a world where automation and
AI are table-stakes, the human side of innovation is the new competitive advantage needed to thrive in an uncertain future.
1
2
3
1
2
3
Humans + Tech =
sustainable success
Business impact
Knowing what humans truly value in an experience and what’s setting the benchmark for their expectations can help companies to eliminate wasted efforts and focus on the ones that truly make a difference in human behavior.
X
more info
more info
more info
more info
more info
Business impact
Knowing how to win the battle for humans attention can help companies target investments to the moments, interactions and media, or channels, that matter to maximize return on investment.
X
Business impact
Getting smarter about how humans connect and with whom they connect can fuel better insights and stronger connections.
X
Business impact
By understanding the impact of life events on the trade-offs between time and money, as well as when and where they occur, and how they are changing based on new life events, companies can engage with us in the right way at the right moment.
X
Business impact
Understanding what the wallet represents and has inside it enables companies to target those able to buy.
X
Better
— “Four Hallmarks of Innovative Leaders” Brian Miske, Principal, KPMG Ignition
1
2
3
For your board members
In fact, the opposite happened. The widespread adoption of computer simulations made human chess players better. A recent study conducted by Henning Peinzuka of INSEAD(3) found that in those countries where humans had access to computer chess simulations, their performance in chess improved. The players still found it useful to play against humans, but the presence of the nonhuman made the human a better, more creative player.(4)
