Saturday, February 27, 2016

Digital Innovation Premium

Digital means flow, there is more flow of creative ideas, the better opportunities to reap the benefit from innovation management.

Many say digital is the age of innovation. With the increasing speed of changes and hyper-fierce competitions, at present days, innovation is the “Must Have” element of the business strategy if the organization wants to stay competitive on the market. Digital organizations are complex adaptive living systems, which are comprised, in part, of people who are also complex adaptive living systems, all such systems function, grow and prosper by continually learning, innovating, adapting and evolving. Creativity has just become indispensable, and innovation turns out to be a competitive necessity. From a business management perspective, how to build a highly competitive organization with digital innovation premium?

Create an open work environment with the culture of agility: Digitalization stipulates companies work together in a hyper-connected and continuously converging environment that provides structural analysis and a certain extent of serendipity. Digital means flow, there is more flow of creative ideas, the better opportunities to reap the benefit from innovation management. Digital organizations also follow the agile principles to focus on three “I”s -Interaction, Improvement, and Innovation. Agile is a fantastic way of working to involve everyone in the process of creation and delivery. Innovations simply benefit from being developed in and subsequently commercialized in a more open ecosystem, it makes the pie of creative ideas grow bigger. Organizations need to be getting used to these forms of working and commercializing value in the digital era with the new characteristics of hyperconnectivity and convergence. The evolution of innovation only exists in the more open environments that create insights, take advantage of all sources of creativity in a more open way and leap innovation management to the next level.

Develop the tailored best and next practice to stimulate and scale innovation: Innovation is a management process, not just a serendipitous magic. More and more firms are learning and implementing best practices in innovation, Originally, all best practices were industry specific and evidence-based, meaning they were based on data. And practice is always a combination of both people and processes- how they are used to doing things in the organization. Not every innovative company uses every best practice. Not every authority agrees on every best practice. Perhaps it is a better approach to strive for using good practice - good for a certain organization and for the specific situation and challenges that are faced and that actually requires different priorities as compared to others. Some "next practices" continue to emerge - after all, the people who use today's best practices are innovators. Still, there is a recognizable core of approaches and activities that produce profitable innovation. Hence, the forward-thinking organization needs to both learn from other innovative leaders across industrial sectors, as well as develop the tailored best practices to fit for its own circumstances.

Build an "ambidextrous organization," which can manage innovation portfolio including both radical innovation and incremental innovation:  An "ambidextrous organization”  is an organization that can handle innovation streams for different purposes and with different time frames. From innovation management perspective, obviously, there are organizations that are better at "ambidexterity" and those that are worse, but to say that corporations can't do disruptive innovation while executing is perhaps a bit exaggeration. What does it mean of achieving "innovative ambidexterity"? The ambidextrous businesses may separate a disruptive idea-generation from implementing and sustaining innovation. Innovation explorers develop unconventional and disruptive solutions, then, when ideas were fully developed and a prototype built, other people – innovation builders or operation gurus - took over and worked on serial production and sustaining innovation to make products or services more reliable, easier to make, and cheaper.  All those processes in combination favorably affected the outcome= true ambidexterity.

For cracking serendipity code to achieve digital innovation premium, the key to success of innovation effort in an organization is to have the right people in place to manage the process, using experience, insight and judgment to rigorously make the needed decisions, cultivate the culture of agility, well integrate innovation strategy into business strategy, and manage the innovation portfolio in a systematic way.


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