Thursday, June 2, 2016

Three Insights in Digital Innovation

Digital innovation is benefiting the widest possible audience within your organizational ecosystem.

Innovation is the light every forward-looking organization is pursuing. Innovations can create a competitive business advantage that is not limited to economic advantage, it can delight customers and engage employees, create multidimensional business values. With well-educated digital workforce today, it's obvious that innovation is being pursued now more than ever, and in fact, we see much more innovation in more and more areas of the business landscapes. How to run the business as a digital innovation powerhouse?

Manage a balanced innovation portfolio -You aren't ignoring specific types of innovation. Digital innovation has a broader spectrum with hybrid nature including incremental innovation, evolutionary innovation, and radical innovation; hard innovations such products/service innovation, business model or process innovation, and soft innovations such as leadership innovation, communication innovation, and cultural innovation. The gap between incremental and radical is huge both in terms of outcomes if successful and on how to approach it. How to manage a balanced innovation portfolio depends on the nature and size of the business, as well as its capability-based innovation strategy. You aren't sacrificing the long-term viability of the innovation portfolio for only picking the low hanging fruit and gain short-term rewards. Unfortunately, in most of the highly bureaucratic organizations, innovation is still serendipity. A mechanical enterprise that depends on doing something, again and again, engaging various teams and groups, has less appetite for change. Incremental innovation can be tolerated to some extent, but disruptive innovation is almost impossible until the change of leadership is required to take initiatives for disruptive innovation. The true digital organizations are highly innovative, they master at running a balanced innovation portfolio with the incremental improvement- radical innovation continuum.

Innovation needs a certain level of guidelines and rules: you're accepting risk for potential reward: Digital brings both unprecedented opportunities and risks to the businesses today. Every innovation pursuing has the risk in it. Therefore, it is important to set guidelines for managing innovation and handling risk in a structural way. Although breaking the rules is an important part of innovation, ‘business creativity’ such as using creative thinking for business goals, does require certain ‘rules.’ To get the best results, you need to structure the creative process. Innovation is chaotic, messy, and uncertain only if you try to interpret innovation with conventional models, but when you will be able to define a new digital paradigm, the innovation doesn't seem so chaotic. It requires acknowledgment, involvement, and commitment. The principles and guidelines help to further frame processes, measures, and control. For example, to assess an innovation initiative, businesses use P-I-N to evaluate its business value, pros&cons.
P - what is positive about the idea
I - what is innovative about the idea
N - what are the negatives, problems, risks.

Innovation is benefiting the widest possible audience within your organizational ecosystem: Either change or innovation, people within the business ecosystem will have “What’s In It For Me”  mentality. The digital innovation is more often based on collective effort and customer-centricity. From an innovation management perspective, the latest digital technologies such as social computing make collaboration and sharing possible at a large scale. Those who acquire the culture of sharing and collaborating will simply outperform those who don't. In essence, innovation is to figure out the better way to do things and make it benefiting broader participants. Besides those macro, large-scale problems, at the intermediate or micro level, for either organization or individual, how do you get motivated to be innovative at daily basis via solving real-world problems large or small, in a creative way. Innovation is not for its own sake, but for problem-solving. Looking uphill and into the future can help to identify the real problems that matter, and on a scale that can make a significant difference for the longer term as well.

Innovation is the development of a new combination of available resources, in a way that solves real-world problems in a more suitable way. The challenge is always about how to manage risk, build a healthy innovation portfolio, leverage resources, set priorities right and take the steady pace to improve the innovation success rate.


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