Thursday, December 13, 2018

Five Forces of Digital Innovation

Innovation is what leads to differentiation. There need to be both “hard” and “soft,” visible and invisible forces to drive innovation management.

The emergence of potential opportunities for exploring digitization is likely to follow a nonlinear pattern as the pervasiveness of an organization's digitization journey increases. Change at the digital age is coming at seemly a much faster pace, more potential disruptions, with a broader scope, scale, and impact on the business’s surviving and thriving. Winning the digital dynamic means engaging creative thinking, enforcing cross-functional collaborations, building unique business competencies such as innovation. Innovation is essentially an intentional novelty bringing sustainable benefit. Here are five forces of digital innovation.

The business system: The highly innovative companies usually have the powerful innovation navigation system involves tapping the business ecosystem for collective perspective and integrating critical business elements such as people, process, and technology into innovation competency. They can connect the key resources or assets in the vicinity and context to the information and resource-rich hubs or clusters across the business ecosystem. The digital organizations are in fact more dynamic and nimbler business system, which is a collection of hyper-connected and interdependent subsystems. The degree of business responsiveness and innovativeness depends on how those subsystems interact with each other, and those interactions can be structural, technical, informational, or human.

Information Technology: Innovation happens at the intersection point of people and technology. Information is one of the most time intensive pieces of the innovation puzzle, more advanced technologies bring unprecedented opportunities for people and businesses to change, innovate and figure out the better ways to do things. Information & Technology is the key ingredients of the business solutions and assets that can be applied in new and different ways to generate massive business value. Organizations can become more effective in executing innovative ideas by leveraging powerful digital platforms and technologies, harnessing cross-functional collaboration and continuous improvement. Information & Technology also plays a crucial role in creating a disciplined and managed space for developing and testing new models, products, and business approaches.

Structure: Ideally, the digital organizational structure needs to break down silos, be solid enough to “keep things in order,” but also fluid enough to interact with the expanded digital ecosystem seamlessly. The physical organizational structure, relationships, virtual platforms, and social connections wrap around each other to ensure ownership and responsibility, smoothly information and idea flow,  as well as employee engagement and empowerment. Logically, breaking down silos and being intentional about developing business processes that encourage cross-functional communication and collaboration and enforcing business flexibility and innovation. New generations of digital technologies such as social platform or other collaboration tools are enabling not only the structured processes of the past but also the unstructured processes of the hyperconnected digital enterprise to improve business collaboration and speed. Limited hierarchy works best in a creative environment where the free flow of ideas and their prompt implementation is a key element of improving digital innovation success.

Customer: One of the key determinants of whether an organization can move to the digital new normal is how well it can delight customers by “doing more with innovation.” People-centric innovation means that you have to involve customers and different stakeholders, listen to their feedback, involve them in both idea generation and process implementation. The customer including prospects should be studied and observed. Customers should always be involved, but not be the main or the only driver behind the innovation process. Gain a deep understanding of them through empathy and observation by taking a more inductive approach as to what the customer wants to accomplish "next." This is where pro-active listening is very important and becomes the vital link in innovation management efforts. To put simply, people should be the center of innovation management and they are the major focus for innovation process and accomplishment.

Culture: Culture is the melting pot to inspire creativity. Culture is the collective mindset, attitude, and how things get done in the organization. Culture is invisible but powerful. A creative team should have the cogitative difference and diversified worldview and the culture of inclusiveness. Many believe there is no innovation without diversity in the age of abundant information, rapid changes, and hyperconnectivity. Diversity is not something you need to plan for. It is a basic reality of the modern digital world that needs to be better understood and well orchestrated. In fact, at team setting, collective creativity or creative culture is only achieved through the diversity of thoughts. Highly creative people in the team or across the teams are almost accidentally collaborating, clarifying, building on each other's ideas, discovering nuances and unexpected relationships, and so on. All of which enriches the thinking and contributes to a fabulously rich innovative output.

Innovation is what leads to differentiation. There need to be both “hard” and “soft,” visible and invisible forces to drive innovation management. There are many ways to differentiate and, therefore, there are many ways to pursue innovation. The ultimate business goal is to unlock latent expertise, scale innovation effort, amplify digital impact, and streamline business flow across the business ecosystem.

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