I have written a fair amount about the new innovation era, offering a view on its future design.
One that is jumping to a fresh cycle of innovative design
We are in the middle of it, some of you may not have noticed its impact and change but it is significant on the understanding of innovation, in it’s future design.
Often this era of change is not as well-recognized or being faced up to, as you would expect.
Many companies are still in denial or not wanting to address the significant legacy and change required.
Innovation has gone from being islands of knowledge, developing new products and services exclusive to that one company, then quickly copied by the competitors, into something radically different.
We are moving into innovation activities that are built more on collaborative and co-creation approaches, where cooperation and exchanges are more built around platforms and formed in ecosystems.These ecosystems gather around a concept or transformation that requires this collective approach and require a more radical design and become very unique in the end result .To achieve this innovation has gone digital, pure and simple.
There are significant shifts underway towards digital innovation in R&D and new-product development. They are all becoming digital endeavors. Of course, this shift requires really big changes in strategy, operations, the organization and in each individuals orientation. Executing this shift to digital is central and very complex, as it is involving the whole Enterprise.
Nowhere have I come across such a confirmation, then in the annual BCG report, the one released in January 2018 “The Most Innovative Companies 2018: Innovators Go All In On Digital“. The focus of the report is specifically on the state of digital innovation and what it is taking for companies to refocus their innovation programs around this digital imperative.
BCG rightly is pointing out from their research that digital innovation is just taking over everywhere.
They point out that since 2014, only four types of innovation and that are all related to digital, have grown increasingly in importance in their pursuit by companies. These are big data analytics, the fast adoption of new technologies, mobile products and capabilities and digital design.See the above for the complete list on where innovation is heading, it makes interesting viewing from BCG.
Even though this is a trend for all, there is a growing digital divide. Those that have firmly established a coherent, connected and effective digital innovation program are getting stronger, while those that are lagging are increasingly getting weaker. The ability to possibly catch up might come from exploiting technology platforms but this needs some equally careful thinking through and does not avoid the internal need to change and re-orient to this new digital innovation world. The key lies in opening up, both internally and externally and that is a sea-change of difference for many companies to undergo.
So the need to innovate comes from digital as the source
The importance of big data, the speed of technology adoption, mobile products, digital design, and technology platforms are at the heart of innovation. It will fundamentally change the type of resources innovation requires. Another of the visuals from the BCG report is indicating the huge differences between leading and lagging companies in how they are leveraging digital to help the following aspects of innovation
The whole point for innovation today is digital has altered our understanding. We are seeing blurred boundaries, digital is raising the stakes and fear of missing out, it is upping the speed at which others are competing with new concepts, ideas, and engagement with customers. Traditional methods and approaches to innovation are completely breaking down, hence my total belief we are in the new era of innovation.
We so often hear about a transformational mindset, but we do need one.
We need to short-circuit our innovation development process, we must have as much visibility (and controls) into our value chain, we need to develop a riskier mindset to explore, validate and experiment to bring our products and services to market.
The whole operational process has to reorient away from being internally driven into being externally lead. To re-equip whole organizations is a long transforming journey, the breaking down of siloed thinking to one of being more open-sourced one requires new communicating tools. The encouragement of having open feedback loops, both internally and externally, engaging the customer needs exploiting. The push for constant points of “predictive and actionable insights” needs to be engrained in the collective thinking of all within the company. There are needs to explore the ways of working, collaborating and engaging and that alone is a massive undertaking.
Digital is demanding so much in new processes that need to be more agile, responsive, reflective of new insights at increased speed and fluid in the design of those undertaking the solution to react. This needs significant process redesign and the redesign into small, nimble teams and cross-trained groups who collectively gather around a problem to solve it and then disperse and reform in different shape and form to address the next need. This agility needs the tools of testing, feedback, and adaptation to accelerate the innovation process.
I liked the suggested digital design principles that BCG outlined in their report.
The design needs to be customer-centric, agile, experimental, lean, standard as much as it can be, with simplicity and adaptive as being central to this. They need to focus on operational excellence that has high degree’s of organizational discipline that seeks out continuous improvement and the people are empowered, accountable and encouraged to be cross-functional in expertise, both in digital and business-specific expertise.
They suggest within the digital leader some specific traits, I think this resonates with me for the whole digital design and team environment. It needs breadth of understanding, it stays clear on its purpose and in its vision to undertake jobs that constantly change, be culturally adapt, to embrace the digital world, internally and externally, be highly adaptive and flexible to adjust to relevant and emerging information and learning and lastly be as collaborative as they can be in a dynamic network of collaborators, informers, and doers.
To finish BCG provided this visual to outline the processes and cultures that can govern disruptive and radical innovation projects, as digital innovation transformation is certainly that
The road you take will decide where innovation is heading for you
Do you stay on the innovation pathway in its design, built up over many years or recognize, the ground has shifted to one of digital reliant innovation. So each company needs to decide the road they want to take. BCG suggests one road is the measured and deliberate transformation journey but change is a constant to be increasingly more adaptive or the other is applying a “leapfrog approach” where rapid identification, massive external help to scale-up in-house technology linked to technology platforms where culture becomes a significant place to manage, as you manage the old and the new and where there are real clashes.
It does seem we all need to pursue disruptive and radical innovation designs. It seems we can’t keep hiding behind incremental improvement today, others are racing to get ahead and they see digital innovation as the chance to make this happen. Time is not on anyone’s side, it is how you use it and the wisest are going digital as fast as they can.
Paul’s narrative is informative and inspiring, and I largely agree that commerce is mutating at a rapid pace. However, while implying that innovation is happening everywhere, then narrowing the narrative largely to corporations, makes it easy to ignore how stodgy and non-innovative our public sectors remain. Not everywhere: in the Nordic nations where I often lived, public agencies have taken the lead in innovation initiatives. The same is true in Canada and in bits and pieces, the UK. But back here in the USA, and probably in most of the world (not least, America’s on-again, off-again agonists, Russia and China), governance remains one of the least “innovated” human activities, especially when one seeks a larger sample than just the day’s most recent tweets or social media uptrends. I have been dealing with public agencies for the last several decades and must say, I’ve about had it with them. They delight, almost smirk, at the notion of innovation — I mean, besides the few obvious venues in which it thrives, especially when large philanthropic incentives are at stake — and laugh at those who would seek improvements, as if that really mattered when one occupies a well-funded sinecure. I wish I could be more optimistic about this large segment of social phenomena, but honesty prevents it. I may go off and do some innovating in that sector myself, which will consist of a future-history fictional account of radical innovation in governance that no doubt will be be shrugged off even by those who may one day experience it firsthand and wonder why they didn’t see it coming….
Always Government seems a different story. I have never felt the^overarching framework provided in the EU makes for good, efficient and focused innovation at country level. The US has always, it seems, been one where it leaves much to private industry or government edict. Not much in-between. Will it change, as previously, slowly and when it is ‘deemed’ to push it.