Sunday, July 21, 2019

Deal with “Innovator’s Dilemmas” by Understanding these Counterpoints Thoroughly

The innovation competency of the business depends on their ability to create, manage and transform great ideas to achieve high business value. 

Innovations in the digital era are coming at seemingly much faster pace due to exponential growth of information and frequent disruptions. Technically, Innovation Management is an interdisciplinary approach which stands in between management, science, technology, economy, psychology, sociology, and law, etc. Shaping a truly innovative company is challenging because of the sophisticated management skills needed and potential risks involved. You have to deal with “innovator’s dilemmas” smoothly by understanding the following counterpoints thoroughly.

Standardization vs. Personalization: Digital is the era of people, option, empathy, or simply put, "personalization."The purpose of business is to create customers. Providing the personalized services or solutions to its customers become the new normal to run a customer-centric organization. Customer must be willing to pay for it, whether it is a product, process or service innovation. When managing a customer-centric innovation life cycle, gain a deep understanding of customers through empathetic observation and feedback-feed forward practices. Customer involvement often elicits highly invaluable information to design tailored applications or solutions to meet customers’ needs. Great personalization leads to better customer satisfaction. On the other side, innovation is a process which can be managed. Improving business innovation capacity means you have to keep improving innovation management effectiveness and efficiency. Usually organizations needs standardization for cost control, process optimization, and capitalization of “lesson learned.” In fact, innovation management is an iterative innovation and standardization continuum. High mature organizations indeed need both, standardization and innovation. The matter is to figure out how and when to apply them in the most effective way.

Controlling vs. Freedom
: Innovation is a management process, which means a certain degree of “control.“ A systematic innovation management process helps business recognize challenges, understand boundaries, deal with constraints, and manage resources.The systematic structure provides the “controlling” shell within which innovation teams can communicate and collaborate freely to create transparency. However, too “pushy goals,” “over-control” or micromanagement stifles innovation; the outdated systems/processes/technology that many organizations are using to capture innovation value are becoming inefficient in this rapidly changing world with the high degree of digital convenience. Innovation should break down some outdated rule, but also needs a level of guidance. Innovation management consists of different stages. Some stages are more structured than others. Say, innovation prototyping and implementation are far more “process driven” than idea generation plot. Thus, it’s important to give people freedom for “playing around,” experimenting and bring up with fresh thoughts and ideas. The primary focus of the innovation management control would be to identify and control those key factors that can be addressed such as financing, market understanding, competitor analysis, with the goal to improve overall innovation success rate.

Risk vs. Rewarding: Innovation requires thinking out of the box, taking calculated risks, altering or changing the frame of reference to create novel ideas and achieve their commercial value. Innovation comes with a risk of failure, usually not well tolerated in companies governed by risk-allergic mindset. But often, risk and reward are proportional from innovation management perspective. Breakthrough innovation usually has much higher ROI but with much greater risk. Therefore, it’s important to manage a balanced innovation portfolio with the right mix of incremental innovation and breakthrough innovation, with the scientific processes taken in place to manage risks systematically. To stay ahead of the change curve and competition for moving ahead, forward-looking organizations preserve a commitment to take the discovery-driven path for ensuring that they are pursuing blue ocean and taking the long term investment, not just focusing on short-term gain, and the measures should be oriented to justify innovation the organization needs.

Today’s business growth is accelerated by innovation for making a smooth shift from surviving to thriving. The innovation competency of the business depends on their ability to create, manage and transform great ideas to achieve high business value. Due to the fact that innovating in today’s digital world has become increasingly complex in nature, it’s important to gain an in-depth understanding of business issues and apply interdisciplinary management disciplines to deal with these counterpoints well and improve the overall innovation management maturity with high return on investment.


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