Thursday, March 22, 2018

Digital Innovation Bottlenecks

The business needs to define strategy, profitability, and relevance at any given time to break through bottlenecks and avoid pitfalls on the path to innovation.

Digital innovation has the broader spectrum and more enriched context. Innovation is not serendipity, but a management process. Innovation has three phases: discovery of a problem or new ideas; designing a prototype solution and the ultimate delivery of a commercially astute outcome. Therefore, the best point of view is to see innovation as a system, capable of delivering organizational-wide capability. However, innovation management has an overall very low success rate in the majority of organizations. From the management perspective, what are innovation bottlenecks and how to break them through in order to build innovation as the business competency?

Idea management bottleneck:
The original germ of a creative idea is often, if not always arrived at through the interaction of ideas from different domains of thought and experience. Thus, innovation thrives with diversity. Homogeneity is the bottleneck of idea generation, and silo setting will stifle idea creating and flowing. If creativity is about connecting the dots, and innovation is about applying the structural methodologies to transforming novel ideas for achieving their commercial value. To break through idea management bottleneck, innovation management needs to clarify: Can you learn some innovative ideas across the industrial border? Can you also learn what the trend of such new idea is? Innovation happens at the intersection of people and technology. Can you identify important technology trends, including potential next-generation innovation waves, as well as the key players who are involved in their development? Can you classify the components or operations of ideas, what can interact with ideas, and what parameters the innovative ideas might have? Who else is using such new ideas? Who are the industry players? Ideas are like water, keep flowing, do you have an idea reservoir to keep them up, and manage them effectively to unleash their potential. Most good ideas emerge from business interactions, not single individuals, therefore, 3C (Communication, Collaboration, and Coordination) are necessities for keeping idea flow and practicing good idea management.

Innovation process bottleneck: If idea creation is more art than science, and then idea implementation is more science than art. Lots of ideas mean you will fail if you do not have a screening process to systematically evaluate them. The nature of how the implementation of the idea has to follow a logical path for the solution and provides a great opportunity for the digital organization to shine through based on its scientific discipline. The main barriers to innovation are silos, rigidity, inflexibility, static process, or bureaucracy, etc. Different types of innovation should be managed via tailored management processes. If your stakeholders are internal process owners and your output stakeholders are the same, the type of innovation you have is continuous innovation. If you take knowledge from one context and bring it over into a new context, you have knowledge or technology transfer innovation, with a higher possibility to manage a radical innovation. With continuous process improvements, you can reduce costs and increase innovation success rate. You are implementing an efficiency innovation. The right level of guidance and process is important, but the overly rigid processes or too ‘pushy’ goals will create new bottlenecks and stifle innovation.

Resource bottleneck: One of the main barriers to innovation blossom is the business resource. Organizations have limited resources, many businesses took a big bite of resource to keep the lights on, only left very little for doing innovation. Thus, resource management becomes a bottleneck for innovation success. How the resource allocation is determined should be understood by important parties. An effective resource allocation scenario helps take advantage of resources effectively, optimize cost, set priority, keep the process transparent, and manage a well-rounded innovation portfolio effectively and efficiently. The bottom line is, for any company to succeed, it is essential for the entire company to be pulling in the right direction, breakthrough resource bottleneck and maximize the digital potential of their business.

Innovation execution bottleneck:
Even you have many innovative ideas, it doesn’t guarantee innovation success due to the possible innovation ‘execution’ bottleneck. Most companies fail at innovation execution because they have no clear process, nor understand the linkage required to work horizontally across departments, as well as create a disciplined or managed space for developing and testing new models, products, and business approaches. Organizations can be more effective in executing innovative ideas by relying less on silo functions, more on cross-functional collaboration and continuous improvement. The other key to closing the innovation execution gap is improving the organization's culture to be more risk tolerance. If you have or develop the right culture, and then everything else can be connected. Innovation execution is an integral part of a strategy-execution continuum. To bridge innovation execution gap is to de-risk the introduction of innovation into the market, protecting existing operations and brands, and establishing clear proof-of-concept before making investments to launch and scale up.

Innovation talent bottleneck: Digital innovation has a broader scope, you need different types of people for various innovation objectives (incremental, breakthrough, etc.) in different types of companies (service/solutions versus products, etc.) Fresh ideas require Mavericks since being innovative is a state of mind which disrupts legacy thinking or the old way to do things. Innovators play the odd which involves both opportunities and risks. You need to have both idea creators and implementers who can rise above the status quo. To break through talent bottlenecks, it’s important to build a culture of learning and creativity, recognize and encourage innovators and changes agents. Have the good sense and charisma to attract or to surround yourself with the right people who can either generate great ideas, provide fresh viewpoints, or move the idea into action. Spotting and scoring individual as an innovator needs to focus on individual capabilities and potential to innovate. Have the right people in place to manage the process, valuing experience, insight, and judgment to rigorously make the needed decisions, and manage a balanced innovation portfolio systematically.

Innovation is the core activity of human evolution to changing the environment for reaching performance and improving profit, for the saving of resources, for the satisfaction of customers, etc. Innovation is about reinventing the business direction and purpose at any time. The business needs to define strategy, profitability, and relevance at any given time to break through bottlenecks and avoid pitfalls on the path to innovation. Innovation has to become your business routine and collective mindset. It takes both strategy, discipline, and daily practices to streamline innovation processes and reap the benefit of innovation practices.


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