We have to evolve it, as we go. With anything that is evolving in front of our eyes, we will need to recognize some of the decisions we will make will turn out to be wrong but made as a good judgment at the time, on ’emerging’ evidence, not proven. Achieving a digital transformation is becoming really essential for innovation, helping to enable your ability to deliver sustained growth through making all the ‘connections’ come together in different ways than ever before; in evaluations, analysis, in collaborations and in the process from discovery to eventual commercialization.

Digital transformation executed well is a really big undertaking. It goes way beyond making a series of incremental improvements to become cloud-ready as are supposed to build in and reflect social, mobile and digital technologies in the solution set. We need to fundamentally transform our processes by opening up and engaging with customers in dramatically different ways, in real-time, in constant exchanges and connected ways. Everything needs to be tracked and traced.

Customers will want to participate, influence and aid your design and final product. On top, we have to deal with a broad range of communities, across platforms and in different ecosystems at speed, scale, and scope to master different levels of complexity and draw in the expertise we lack within our organization. However, we must do all this in this world of the uncertainty of if it does all connect and work, to reposition all our businesses towards the digital world.

Digital transformation is, without doubt, an event of historic impact, challenging what we know

Technology is becoming an integral part of our lives, for us personally, as consumers or employees, but equally for businesses, the government and our educational institutions. It is pervading everything.

Look at digital transformation as an investment, our future ability to function, compete and communicate will depend on it. Investments always take time to show results, and digital will demand a lot. It is shaping the ways we will work in the future, on how we are going to connect, communicate, and learn. Often, we have been caught up in a specific device we use. This time, it is different though. It is how that set of devices allows us to become connected, how they interact and form a system to tackle a need or task. We are all struggling to re-equip ourselves, in skills, in simply managing, in managing the digital world and its demands. This is another work-in-progress

Digital transformation will keep pushing us to become more efficient and effective yet also to become more adroit and innovative. It erodes and eats into our time that in the past was taken up by so many other things. We will need a new reset in our values and beliefs, we will have to carve out a different set of routines and habits, otherwise digital will simply take over our lives to the detriment of everything else.

The good thing is that Business entities are being forced to open up

Digital transformation happens on a scale and scope that makes many reluctant to take it on; it seems overwhelming in its complexity and risk. The business returns seem hard to quantify in traditional metrics yet the need for transformation compels us to ignore the known metrics and believe in all the unknowns that we are told are achievable.

Often it is hard to convince deciders to support this need for such a significant transformation, whether they are just skeptical or lacking technology adroitness. They want to slowly attack it, sometimes in the hope, it might “sort of” go away. Yet for others, who recognize the future lies in technology and the power of networks and community engagement, it is the opportunity to radically alter their way of doing business; the opportunity to forge new competitive positions that have an engagement at their heart.

We don’t know what the “end game” will look like

We don’t know how the digital transformation will turn out in the end and we have to accept that. Much will come towards us as we adapt, learn and experiment, with many emerging technologies, all in different stages of their evolution.

You sometimes get a sense of crisis pervading the boardrooms, a sense of growing concern, when they recognize the threats and the magnitude of change this transformation will demand of them. They are often the least equipped to understand it. They have to become highly reliant on others to teach them, inform them and encourage them to keep ‘at it’

They will be required to find multiple resources for this journey, and be it just to stay competitive in this new digital world where the demarcation is blurring and industries are agonizing in continuous disruption. It is the blending of all the different experiences, understanding, and comprehension that is rapidly flattening the hierarchy to accommodate all these different voices contributing to building a new digital business landscape.The “survival of the fittest” will be determined by how successfully and how fast deciders

The “survival of the fittest” will be determined by how successfully and how fast deciders maneuver through this shift. Transforming established businesses has become an imperative today.

We are told there are three strategic goals to justify the transformational journey:

1. Providing a better, systematic customer experience, leading to greater loyalty and fostering a community of advocates
2. Internally, digital transformation can improve the operational efficiency
3. New business models, which were not feasible before the time of the connected world, offer new markets and growth opportunities

The worry becomes with customer engagement there is this risk that senior executives will let transformation fail

Of those strategic goals, achieving customer engagement, in the sense of a sustainable partnership, is the most valuable one. Digital transformation enables you to engage your customers along their journey across various products, services and communication channels. Digital has become truly pervasive in people’s lives now and this forces businesses to think about how they can become a consumer technology company, irrespective of what they offer.

The challenges are massive. Companies are struggling to see clear business benefits in traditional ways of managing return on investment. Senior executives have been trained in a curriculum that didn’t prepare them for this world of digital technology and a collaborative world where they have to listen, learn and accept others are often more often right.

The senior executive lacks the understanding of new tools of engagement, which are table stakes already in the world beyond their own corporate offices, in startups, social media companies etc. They consider technology as something for others to worry over. Increasingly, they also lack the relevant exposure and experience to handle the new game successfully.

Driving an effective digital transformation through technologies, which are constantly adapting and evolving, is not the prediction-model based experience they are used to and that got them to the top. A new mindset is required, with solid risk judgment based as much on experience as in listening to others, replacing hard facts often with soft instincts, and incomplete data that is in a constant validation of structured experimentation.

What’s the goal to keep in mind? Looking at the needs of return

• Simply put, you need a picture of how you will (eventually) make money when you start your journey of digital transformation. Create a clearly outlined set of value propositions, and define how you will engage and interact with your customers, partners, and suppliers in products, services, and business models.
• Your business will revolve around what customers really want, a seamless experience where speed, time, performance and response become dominating values – far beyond a specific job-to-be-done. The return in innovation, in new products and services that will rise in ongoing customer satisfaction, becomes as relevant as pricing a product. The customer is willing to pay for a product he or she believes good value, great service and solves their needs
• The toughest part of any transformation is actually recognizing you have to challenge your own past assumptions and be prepared to strip them down and rebuild them on a constant always experimenting basis, adapting to what you ‘hear’ and can ‘see’ in breaking opportunity from all the increased data coming into you to analysis.
• In general, business is moving towards a culture of experience. Whether in communications, development, or delivery, with the customer, in the product itself:
• Everyone’s time within the organization is pivoted towards the outside world, learning to collaborate, exchange and forge different alliances.
• There is a great advantage in seeking increasing speed and scale. It delivers ‘time to impact’ to as wide an audience as you can achieve. Having a global ambition or partnerships that can enable speed to market makes increasing sense but there is a higher likelihood you will have to narrow your offering focus to reduce internal complexity but still deliver within a network of providers, products, and services that deliver to customer needs.
• And the most important change in perspective is about being different, about carving out our own uniqueness but recognizing this is forming more around platforms and ecosystems where all participants look to collaborate and build a more superior offering than one they could achieve on their own

So the actual starting point will be to come up with a detailed plan of coordinated actions that challenge the way you have been running today’s business and totally rethinking it from top to bottom to make any transformation, digitally dependent.

Innovation is becoming highly dependent on digital technology, it feeds understanding, validates it and delivers much of the final value proposition. Undertaking a digital transformation becomes essential to the health of innovation, let alone the company for the future.

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The post Moving to a Digital World totally across your Business is highly challenging first appeared on Building Your Innovation & Ecosystem Intelligence.

We continually learn nthat intuition and ‘gut feel’ on research set up and gathered weeks or more often months ago, has a hidden cost as it rapidly goes out of date. This ‘knowledge’ is becoming out of date before we can gain from it and sometimes highly dangerous to follow, or believe in in the more volitile market conditions of today’s, those that are rapidly changing. We need to get closer to ‘real-time.’

This reliance on rapidly out-of-date understanding cannot be the basis for any justifications for high-stake bets when it comes to innovation. We need to change our thinking and design in the digital insight part more specifically within and along the innovation process. Technology in all its forms is altering the innovation game but are we adapting to this radical change potential? We need to embrace it.

We have, in the past, partly because of levels of uncertainty. We have been overly reliant on ‘poor’ limited data and tended to take a safer route to market from this limited comprehension of the dynamics within the market. We are trying to achieve well-defined problems based on limited validation and simply place “solutions” into the pipeline for innovation. We attempt to work methodically along the timelines irrespective of changes constantly occuring, often impervious to the market conditions change, often going on before our eyes, with the end result, a disappointment and a lot of wasted energy and resource.

We continue to couch our bets and gravitate to solutions that are as close to what we currently offer, and that just keeps reinforcing the incremental route regretfully.

Today we can radically alter this innovation discovery by getting as close to ‘real-time’ if we care to invest in it. We need to invest in the enablers of technology to deliver constantly updated data, to allow greater analysis of choices and potential, closer to ‘go/no-go’ decision points.

Digital threatens (thankfully) this entire incremental pathway.

Markets continue to have even greater uncertainty and we need to respond in very different, faster, well-informed ways. Competition is changing, markets are blurring and customers are becoming far more vocal. To respond we need to reconceive innovation into a constant and rapid learning approach, listening and observing from these sources.

The need is to become far more iterative in feeding back what we hear; full of experimentation, testing, and adjusting, we must lend ourselves to adopting a far more minimal viable product approach, where we continually test assumptions, checking what is valued about the concept, gained constantly from the customer or market feedback.

Digital is also pushing us to shake off complacency since customers are increasingly further connected and interacting in new ways, making the constant choice, adapting to best experiences, imaginative offers and certainly not being as brand loyal for most of our products as previously. We need to find different and adaptive paths to ‘plug into’ and join the conversation, to help shape that conversation and through these exchanges, recognize how the brand and reputations become increasingly important in all things innovating.

Digital tools are changing how customers discover, evaluate, explore, make their purchases and use products and then how they react, share, interact and make their connections to our brands. The whole process is highly dynamic and reliant on the ‘network and social media effect’, and the job of the innovator is to translate this and respond in fast, nimble, agile ways, to fulfill the needs and capitalize in responsive ways. This demands a radical redesign of the innovation process and the whole customer engagement process. Most of our organizations today, really lag on this engagement, let alone on building a more adaptive and agile innovation process being ‘fed’ by the technology solutions we have available to us today.

The need is to “test to learn” and then adjust and adapt, some thoughts include:

• Without a doubt, it is finding and using more techniques and tools that help you make far greater rapid prototyping, testing, piloting and learning from these understandings and how they can be quickly translated back into the innovation process to improve on what you have known, into one of what you have become aware of. “Testing to learn” will become the new innovation mantra and the accepted innovation process; a dynamic, fluid and rapid experimenting that makes it a constant learning one.
• We are today, partly down this route of early learning, with the help of software that can capture ideas, offering a sound vehicle for communicating these and a place to gather and define solutions that can be taken forward. Yet we have to push the path of constant evolution and that will continue to come at increasing speed from technology to keep providing new knowledge so as you can constantly improve on your eventual value proposition but that is going to require an ever-increasing agile organization and adaptive system.
• We will need to find different ways to redesign the manufacturing process (more outsourcing) to have more adaptive points where we can intervene and change product design further upstream. We will need to find different ways to ramp up or dampen down finished goods and that is going to push ‘agile’ even further. The ability to balance “scale, speed, and scope” will become paramount in this.
• We will need to learn to focus on the seizing of emerging opportunities in quicker ways but also take a much tougher approach to divestment, so as to release resources from declining positions of advantage. The whole life-cycle thinking needs challenging and thinking through.
• We will need to push for “agile systems” where we can design new applications, find better communication and collaborative social technologies to reduce delays in getting the right information to the right people to advance the process and reduce the duplication of work or the search for the information needed to complete the job. We need to focus much more on reducing innovation process cycle time for faster deployment.We must be constantly adaptive not blindly following an outdated innovation process, that is full of rigidity.
• We will also need to invest in more data-driven front ends to build a more sophisticated process of discovery. The whole concept of divergent experiments and convergent testing leading to validations will become the way to think of the innovation process as a re-looping process. This will require a critical mindset change from a linear one on how you set it, in the design of the process and the use and application of the digital tools you deploy to move this through this constant, ongoing iterative process. Nothing can remain ‘static,’ we need to make it ‘highly’ dynamic, iterative and fluid, a constant learn and adapt.

Rapid innovation matters and it will become even more central in 2017 as digital takes hold.

Rapid-iteration needs to replace the fixed product release date mentality we see in much of our innovative software. We are in a world, driven by digital that requires us to constantly adapt to new learning that is coming from real-time market feedback. The way we learn from this and our rapid innovation application process will be all about this continually testing new assumptions to improve our (final) product and service propositions. This is where the cloud provides the ability to constantly update and release, so we the innovators benefit.

This, I believe, requires a rethinking of the innovation process, as we will need to transform the existing methods and make them increasingly digital and social, in real time, feeding (as close to) real-time data and insights. We need to focus on the rates of innovation output from our learning and improvement in the eventual offering, not on the ‘classic’ input and output metrics from the past, as our constant bearing. It is outcome learning as the driver for metrics It is how we design this in a more comprehensive manner will be a real challenge in 2017.

Are we in a pivotal year of the rapid innovation application process? Will we finally move towards a greater fluid and looping innovation process? One that is fully designed and adopt as our new innovation discovery to the execution process based on the transformational effect of technology. One that is a constant path of innovation understanding and evolution that fits far more with these digital transformational times we are going through. They certainly do need to form a closer partnership for us to gain the transforming value.

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**adapted and revised from an original post supporting a digital transformational study exploring leading practices completed for Hype. Register and then download, it is complimentary

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The post Digital technology is changing the innovation game first appeared on Building Your Innovation & Ecosystem Intelligence.

The customer has become absolutely central to this transformation and the push towards the 4th Industrial revolution is driving this transformation wholesale, across all industries and services engaged in business.

Let me outline some of the challenges in my opinion that might help us all form a clear view of the digital transformation journey, recently researched.

Firstly I’m sure we can all agree transformation is very hard at the best of times

Digital transformation is doubly difficult, it forces us to work with mostly emerging, constantly evolving technologies, and then apply these in an integrated way into an existing business. This stretches our abilities significantly.

Beyond making a series of incremental improvements to become cloud-ready, we are supposed to reflect social, mobile and digital technologies. We need to fundamentally transform our processes by opening up and engaging with customers. On top, we have to deal with a broad range of communities, across platforms and in different ecosystems at speed, scale, and scope. However, we must do all this to reposition all our businesses towards the digital world.

I provided a recent digital transformation report that might help you in planning this digital journey.

I wrote a meta report on the recent developments in the digital transformation in late 2016 that was published by Hype. The report offered a selection of key visuals and overviews from 14 reports, which in turn were shortlisted from an original data set of 140 reports on the topic, ones published over the course of the last few years, that from my research, I found the most valuable. To obtain a copy, it’s free, click this link to register and download.

The intention of this report was to provide data for orientation for people dealing with this difficult topic, it was an attempted to extract a selection of the best emerging practices or thinking of the what, how and why digital transformation needs to be top of every business person’s mind. The report was designed to help you to trigger your thinking, and make you aware of multiple challenges and opportunities you may encounter on this journey.

I provided an opening backdrop to the report here as triggering points to reflect upon and recognize.

Business entities are being forced to open up

Digital transformation is happening at a scale and scope that makes many reluctant to take it on; it seems overwhelming in its complexity and risk. The business returns seem hard to quantify in traditional metrics. Thus it is hard to convince those undecided to support this, whether they are just skeptical or lacking technology adroitness. Yet for others, who recognize the future lies in technology and the power of networks and community engagement, it is the opportunity to radically alter their way of doing business; the opportunity to forge new competitive positions that have the collaborative engagement at its heart.

We have to embrace new technology – or leave the stage

The buy-in to this means undertaking a disruption to the existing organization, to the way you go about business. When considering this, you begin to understand the magnitude of the speed of change demanded. It implies a competitive need for opening up, for responding to and connecting with all external parties who are ready to collaborate.

We all need to think mobile, digital, cloud, and social far more than we did to date. We need to become comfortable in the analytics of big data. If we are not willing to accept that, we should step aside and allow those willing and digital savvy to take the reins and set the pace for the transformation journey.

At present individuals are far ahead of businesses in embracing the digital world

Transformation is coming at us in rapid waves. Its scale and complexity is either seen as amazing or simply accepted, with a shrug of the shoulders. Many are expecting it to be a seamless experience, powerful and adaptable, allowing the individual to make it highly personal.

However, business is lagging in exploiting the opportunity, whereas we as individuals seem to have embraced the social digital world already. Companies want technology to transform their business, but they struggle to find ways towards opportunities that offer true growth.

We don’t know what the “end game” will look like

We don’t know how the digital transformation will turn out in the end and we have to accept that. Much will come towards us as we adapt, learn and experiment, with many emerging technologies, all in different stages of their evolution.

You get a sense of survival pervading the boardrooms, a sense of growing concern when they recognize the threats and the magnitude of change this transformation will demand of them. They will be required to find resources for this journey, and be it just to stay competitive in this new digital world where the demarcation is blurring and industries are agonizing in continuous disruption.

The “survival of the fittest” will be determined by how successfully and how fast deciders maneuver through this shift. Transforming established businesses has become an imperative today.

However, there are three strategic goals to justify the transformational journey:

1. Providing a better, systematic customer experience, leading to greater loyalty and fostering a community of advocates
2. Internally, digital transformation can improve the operational efficiency
3. New business models, which were not feasible before the time of the connected world, offer new markets and growth opportunities

Customer engagement becomes the primary focal point of justification to transform

Of those strategic goals, achieving customer engagement, in the sense of a sustainable partnership, is the most valuable one. Digital transformation enables you to engage your customers along their journey across various products, services and communication channels. Digital has become truly pervasive in people’s lives now and this simply forces businesses to think about how they can become a consumer technology company, irrespective of what they offer.

The challenges are massive. Companies are struggling to see clear business benefits in traditional ways of managing return on investment. They need to experiment and be ready to be agile and adapt as they go, as their customers will radically alter their perceptions and past positions. The journey will often be uncomfortable but necessary.

Senior executives have been trained in a curriculum that didn’t prepare them for this world of digital technology.

They lack the new tools of engagement, which are table stakes already in the world beyond their own corporate offices. They consider technology as something for others to worry over. Increasingly, they also lack the relevant exposure and experience to handle the new game successfully. Driving an effective digital transformation through technologies, which are constantly adapting and evolving, is not the prediction model based experience they are used to and that got them to the top. A new mindset is required, with solid risk judgment, replacing hard facts with soft instincts, and incomplete data with structured experimentation.

We must overcome the barriers for digital transformation

As outlined above, we face plenty of barriers for digital transformation: a lack of vision, not understanding the urgency, holding on to traditional measures for growth, and a host of organizational constraints that restrict decisions.

How do we best start off?

The toughest part of any transformation is actually recognizing you have to challenge your own past assumptions and be prepared to strip them down and rebuild them. Once you have accepted that, the answer to the questions is as simple to say as it is difficult to carry out. You have to understand and potentially fix your customer relationship, adjust internal operations and create a data collection workflow for business insights you can base your decisions on. And you have to do all this in a concerted way, as much as possible. So the actual starting point will be to come up with a detailed plan of coordinated actions and this is where this report might have great value.

What’s the goal to keep in mind?

Simply put, you need a picture of how you will (eventually) make money when you start your journey of digital transformation. Create a clearly outlined set of value propositions, and define how you will engage and interact with your customers, partners, and suppliers.

Your business will revolve around what customers really want, a seamless experience where speed, time, performance and response become dominating values – far beyond a specific job-to-be-done.

In general, business is moving towards a culture of experience. Whether in communications, development, or delivery: everyone’s time within the organization is pivoted towards the outside world. And the most important change in perspective is about being different, about carving out our own uniqueness.

A digital transformation is an event of historic impact, challenging what we believe to know

Technology is becoming an integral part of our lives, for us personally, as consumers or employees, but equally for businesses, the government and our educational institutions. It is pervading everything.

Look at digital transformation as an investment. Investments always take a time to show results, and digital will demand a lot. It is shaping the ways we will work in the future, on how we are going to connect, communicate, and learn. Often, we have been caught up in a specific device we use. This time, it is different though. It is how that set of devices allows us to become connected, how they interact and form a system to tackle a need or task and we need to learn how to respond to what they are telling us, and listening to others has never been the corporate’s best attribute.

In Summary

Digital transformation will keep pushing us to become more efficient and effective but also to become more adroit and innovative. We will need to take a ‘dual’ mindset to constantly balance these often conflicting tensions so as to harness all the different power sources of digital and structure the business and organization accordingly.

Digital is presently determined to be all-dominant, it simply erodes much of what we know and eats into our time that in the past was taken up by so many other things. We will need a new reset in our values and beliefs, a new re-equipping, to deal with everything digital.

Welcome to the digital era where we all are learning to transform ourselves! You might find the visuals shown in the report as very valuable, so as to piece together your understanding of the needs of any digital transformational journey. I enjoyed researching and extracting the best leading practices and frames to help.

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The post The backdrop of digital transformation and its consequences first appeared on Building Your Innovation & Ecosystem Intelligence.

Add in the magic ‘need’ so innovation can benefit from this business digital transformation and we begin to shift around in our chairs even more. What would it mean if we ‘went’ digital and transformed ourselves for innovation within our organisation?

I’ll be honest here, all the answers can’t be distilled here in this one post as digital is all evolving but I thought an opening set of thoughts on ‘digital transformation’ might trigger greater discussion and identification.

So what is a digital transformation?

We needed to step back and ask, what is truly transformational? Scott Anthony, the MD of Innosight wrote recently on this: “What do you really mean by business transformation”. He broke down the fundamental different categories of the effort put in to achieve some ‘sort’ of transformation.

The first is operational or doing what you are currently doing, better, faster or cheaper.

The second category focuses on the operational model, doing ‘things’ in a fundamentally different way

His final one has the most promise and peril, that is strategic. This is as he puts it transformation with a big capital “T” because it involves changing the very essence of a company.

So defining transformation when it is dropped into the next conversation is to ask what do you truly mean? He goes on to suggest a dual transformation might be an answer. I could really expand on that one but not here as I would subscribe to this myself as we need to have a dual mentality of an exploit and explore in our innovation activity. As a taster on this, I wrote something here.

We should link up digital transformation into its business purpose.

Undergoing any transformation must be for a reason (well hopefully) as it does incur a lot of pain before you get to the gain. Moving closer to our innovation need we can see digital transformation everywhere, it is actually all around us. The customer today feels a growing empowerment, in choice in personalization, in knowing the products or service they are buying are meeting their needs and these are becoming increasingly intelligent to meet these needs.

Companies need to increasingly interact with customers, as close or actually in real-time to learn, adapt and deliver to the needs. This requires a company to become far more ‘highly automated and adaptive’.

To get to this transforming point we need to build in a faster adaptation of business strategies and turn out faster innovation outcomes that meet these needs as key to this. Our transformation journey needs to embrace the cloud, mobile, data and networks and relies on higher levels of analytics to interpret and translate information, into insights, into ideas, into innovation that delivers on the ‘needs’ the customer wants solutions too.

Now that really does become transforming.

There is a rub here, most transformation projects seem to fail.

McKinsey in 2011 identified that 72% of transformation programs fail to deliver on their targets so there is an awful lot of thinking, planning and working through any transformation to make sure you end up with the 28% of the success stories.

I could outline countless ways to work through different examples, set about a strategic and operational digital transformation roadmap, to combine effective knowledge from people and excellence gained from what you need to do in IT and your technologies to get this going, but I will not here, as this is an opening primer, not a solution.

Yet if we want to enable innovation and digital transformation we need to work through three phases of detailed work:

1. The appropriate identification to analyse existing strategy, identify the competitive forces, understand the business model drivers and pull together in an outline the objectives, performance and value opportunities;
2. Set about planning these out, analyse, discovering potential pain points, the critical success factors, benchmarking others, defining the innovation and transformational need;
3. We go to the creation part, what we can do and this requires producing different strategic maps, scorecards, value maps, performance measures and finally how we would prioritise innovation and those transformation initiatives.

Now that calls for some hard work and again, outside the scope here in providing just this teaser.

So we recognise digital transformation needs to lead somewhere, well it is really most likely to fundamentally alter your (innovation) business model.

I like this as a definition to tighten down digital but it opens us up to the darker side of digital transformation, the risk of digital disruption. They don’t necessarily go hand in hand as most advisors want you to believe as your pathway to becoming the ‘great disruptors’ but taking the global centre for business transformation at IMD and offering this definition it gives us more of a handle on where digital transformation will end up.

“Digital disruption is the impact of digital technologies and business models on a company’s value proposition and market position. Digital business transformation is an organisational change journey to adopt digital technologies and business models to improve performance. It involves challenging the assumptions that have underpinned prior success and stress-testing the ways in which companies deliver value to customers. It means changing the organisation itself, including its operations, culture, revenue model, and more”

We need to recognise digital does transform; it means lots (and lots of change) to get innovation repositioned. We need to ask can this lead to disruption, ours and others for competitive advantage?

Digital transformation is not just investing in more technology or making available the processes online, in the cloud or through mobile apps. That breed of digitalizing is nothing new, most have moved part way to this. We are talking here about:

“Digital transformation meaning nothing less than making strategic and comprehensive process and structure changes, throughout the business, using new, customer-oriented approaches. Ones that are so focused on the customer centric part, as this delivers the direction (of focus) and then the pathway towards enablement that moves you to the final innovation delivery. Innovation that meets and even exceeds the customer need as identified, through these digital insights”

Only then is an organisation truly transforming into a top competitor for the new era for innovation delivery. This means processes, IT, change management, training and lots of it and having a clearly defined program.

So we come back to “why the pain?”

On the whole, digital transformation both increases revenue and decreases costs and inevitably your management will want to go there.

The upside for achieving greater growth and revenue comes from the experience of greater customer engagement. If you broaden out your multiple channels, you achieve a greater number of touch points. The more customers make use of multiple channels it is estimated can provide three times more valuable than pursuing that traditional single channel. As you chase for engagement, you seek customer experiences and this leads you to expect and look for growing market share.

The lowering of costs comes down the road, as you pilot through any digital transformation journey as you go closer to a platform unification and optimisation of staff, and technology as you gain from that invested dollar in insights, information, data and analysis if you have deployed your strategy to raise collaboration and productivity. The multiple dollar questions are how do you set about doing this?

More information, greater personalization is both unpredictable in what it yields and is an ongoing process. It never finishes because the point of digital transformation is to continually adapt, to knowledge flowing in as customer needs continually change and your job is to keep up and deliver on them.

Innovation & Digital Transformation eventually get joined at the hip.

The key to innovation is clear; it is experimentation and this needs flexibility, to adapt, be agile, to test ideas. To achieve this you have to go digital. The magnitude becomes the ability to scale fast, to clarify the scope quickly and have a high level of frequency to perform. Turning this digital insight into concepts and ideas, and then as fast as possible into innovation outcomes that respond to the needs and digital insights you gleaned from your customers.

What do we need that is different from today?

We need to know (like never before) what value is in the increasing data flowing into our organization, we need tools and methods to translate this, we need dynamic dashboards to inform to ‘right-speed’ the operations that show where we are in investment strategies, in priorities, in delivery management, in workforce and resource delivery, what delivery model is required for the type of innovation going through the system and lastly the development methodology we are applying to this to take it through the system. These call for a different approach to the innovation process.

Instantly our collaborative platforms need to be transformed. We need multiple crowdsourcing that captures the outside but also the inside of the organisation. Data and knowledge need to get tightly fused into the process and that means more predictive analytics.

We need to move towards a greater fluency and all working within the delivery of innovation need to understand increasingly the different intersections of technology and business and work at breaking down the barriers, resolving the hold ups and equating more risk comes in as we speed up and engage.

We need to encourage the ‘art’ of not just minimum viable product practices from lean practices, but far more importantly minimum viable transformation that has at its core validated learning, how it all interacts to form a cohesive innovation delivery point. So to achieve this MVT we need to rethink business systems and the whole go-to-market potential that includes what service supports, the customer engagement levels, the channel strategies and the eventual distributions.

Is it possible? Let me finish on one example already successfully working in today’s market.

One company that has been excelling at insight capture is the Spanish fashion retailer Zara, owned by Inditex. It tells a digital transformational story.

The key to their transformational success has been how they treat insights. Insights gained from Zara sales associates and managers are critical to Zara’s business model, which are based on sensing shifts in fashion trends and delivering clothes that exemplify them before they become passé.

To do this Zara trains store managers and sales associates to elicit feedback from customers about what they like, dislike, and would purchase if it were available. They also communicate their own ideas about what will or won’t sell.

These insights are captured in Zara stores around the world and reviewed by-product designers at corporate headquarters. Zara’s has become a vertically integrated structure, in which manufacturing and supply chains are located in Europe for the fastest-moving product lines, gets products to stores in as little as 10 days with most sourcing coming from Asia or Latin America.

Most important for Zara, the business model encourages customers to visit the stores often to get the styles they want, because clothes are produced in limited quantities and stock turns over quickly.

For Zara, the quality and timeliness of employee insights help the company identify what will sell, with few misses.

In fact, less than 1 percent of Zara’s products fail—versus 10 percent for competitors—despite producing nearly 10 times more kinds of products per year. Zara’s store managers and employees are doing more than simply reporting what customers tell them. They are using their knowledge of fashion trends, their professional experience, and their ability to ask the right questions.

At a time when most retailers are “deskilling” frontline jobs and requiring less of their employees, Zara is counting on them to be the eyes and ears of the company, and Zara is paying more for those skills.

(This case on Zara was extracted from IMD).

It combines much of the digital transformation underway. It involves technology delivering on the knowledge and insights of people who are engaging with their customers.

My end of post message: Sticking to traditional ways of doing business not only means missing out on the benefits of digital transformation—in today’s dynamic marketplace, it’s no longer even safe, it just means you are the eventual loser or lost completely.

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Publishing note:  This blog post was originally written on behalf of Hype and with their permission I have added to my own site as well.

The post Digital transformation – the need to transform our innovation approaches first appeared on Building Your Innovation & Ecosystem Intelligence.

We need to radically improve our abilities to engage, relate and discover new innovation opportunities at a completely different level of faster performance.

There are many issues both strategic and tactical to work through, to extract the rich potential from any digital transformation for new innovation growth outcomes

The final part of a seven-part series – new dawn or your worst nightmare?’

The array of new digital technologies that we are trying to connect organizations into, for the world of digital insights, is going to be highly disruptive or empowering, for all organizations. It has the potential to radically alter our organization’s performance.

These are powerful technical forces that are going to connect the digital age inside organizations, these will require a deep thinking through for all the ‘points of impact’ this will have.

Digital is presently moving way ahead for the systems our organizations have presently in place. What does need changing to ultimately yield the innovation returns we will be looking for?

Expectations and reality needs resetting, the hard work is not ‘just’ in connecting the technology, it is its impact that it will have across the organization to be able to ‘react, respond and reorganize’ in very different ways from today’s practices.

We are dealing with a completely different set of mindsets, skills, procedures, governance, processes and responsibilities. To gain from the digital evolution taking place we need a robust, comprehensive and radical overhaul of much of what is going on within our organizations.

Many of our existing systems will need a radical redesign
The innovation system is not broken (yet) but it is totally inadequate in its present form to capitalise on this influx of new opportunities digital connecting can bring.

It will potentially just choke up and come to a grinding halt unless we seriously step back and re-evaluate the innovation process, its needs, tools, frameworks and its ‘new way of working’. We need to redraw the innovation system and its management structure, procedures and governance.

There is this need to blend technology post digital with people in significantly different ways. Innovation calls for better automation and its management understanding to design all these into its system. Information systems and their data outputs might generate but humans have to frame the challenges and problems they are in search of answers.

So how can digital technology be leveraged more effectively as an engine for innovation and future growth when we are seeing current innovation constraints and impediments?

Is the innovation process fit for the new purpose? Clearly not. It needs a radical overhaul to support the digital technologies and the ‘insights’ coming towards it.

To embrace digital innovation there is a lot to work through, here is my initial attempt.

As we move towards this age of digital innovation, what do we face?

• “We are faced with a truly pervasive global network making more things possible, the biggest value proposition of technology has shifted to the new, deeply super-connected, scalable-to-billions, always-on ways of working that digital business now represents. The upshot: Nearly everyone today is connected to everyone else in the world 24/7, with the devices in their pockets and purses” (View of Dion Hinchcliffe in his article “The internet inside the Enterprise“). Innovation needs to race to catch up and respond, so as to capitalize on it.

• Equally in Dion Hinchcliffe’s view, which I can recognize: “the Internet has proven itself countless times as that uber laboratory of innovation, trying — quite literally — millions of new ideas in scale, continuously finding the way forward on how best to create value over networks, sustain it, and to relentlessly find new models that have the least friction, cost, the highest velocity, most agility, and best ability to tap into shared innovation.” These observations point towards a very different design and structure within organizations to achieve these ideas to scale.

• What will be the new management skills and leadership competencies required to achieve continuous innovation and transformation within organizations? What will need to change, what needs to be brought in and equally, thrown away from today’s practices?

• What are the new forms of organizational design that will be required as ‘adequate’ for an environment of unremitting change? The present innovation system is not ‘fit for digital innovation purpose’ today.

• To learn to apply the application of technology in support of the business, to cope with the new mantra of making it ‘cheaper, faster, and better‘, combined with the increasingly need to ‘communicate, collaborate, and engage‘ across businesses, customers and stakeholders 24/7, we will need very different, more agile and adaptive systems.

• Everything about technology is poised to upend the current model in organizations, from architecture, software development, processes, the way to manage and offer a very different level of service delivery in new business models, rates of change, and cooperation and co-creation needs.

• Boards will need to balance the need for stable, resilient, dependable systems and infrastructure as they go through a ‘state of flux’ in this push for investing in new digital initiatives They must clarify what is essential ‘to make us more agile, innovative and responsive.’

• The worry of dealing with increasing risk; cyber risk, organization risk and the organization’s ability to capitalize on any discovered insights before others do, all raise the risks and threats. Boards just have a real aversion to risk and how this will play out as we digitally connect will partly determine the winners and losers due to their risk appetite.

• To help ‘modify’ the risk concerns at board level, the CTO, CIO or CDO or all three, need to stop talking about the potential of these technologies and more the language of business. Frame this not in terms of cost or disruption but in revenue and new organizational opportunity.

• The need is to establish a digital strategy, which represents all the opinions and the fusion of business and IT, as they are becoming one of the same, as digital is becoming a unifying concept and pervasive and all business has an increasing digital element.

• There is this need for cognitive alignment as it will be increasingly about sense-making, learning, understanding pattern recognitions, gaining debate, and consensus for alignment within the leadership teams.

We certainly need a very different organisational design to digitally innovate?

• The radical shift for the innovator is the need to define the right challenges, in constructing the digital brief, in building the parameters and inputs to be able to ‘extract’ the data that leads to information and knowledge that eventually connects to final valuable insight. Today we are not so good at that.

• The human part within the new innovation process will still be the framers of the task, interpreters of the information and synthesizers of the result. They will be guided by the digital knowledge and techniques they deploy to help them in this. Framing and synthesizing becomes essential skill.

• Developing those abilities and skills in interpreting and synthesizing the data and insights will become essential attributes so to attain the understanding to deliver those “higher scale of richer, more innovative insights” expected.

• The ‘crunching’ of large data sets, will this be simply be left to the analytic person? Someone deploying different techniques, algorithms and predictive solutions. Will they have the necessary understanding or business experience? Who will have oversight or determine interpretation?

• Much will rest on the way these new insights can be communicated back into the organization, to be translated and to be turned into new profitable innovation offerings.

• This ability to align analytics, extract important insights and spot the potential commercial value will become critical. These have the potential to determine the organization’s future.

• There is this need to spot more of those ‘weak signals’ to learn from, using predictive and pattern recognition tools and methods, generating ideas or insights that fit within briefs or parameters that align to the organization’s strategic needs.

• What value judgements will be constructed to rank and grade ideas or insights, so as to begin to formulate the commercial response in new innovation activities.

• Trending, producing insights, scenarios and patterns of discovery, will need both computer and human power of understanding. Forecasting potential, spotting the breaking needs, segmenting the markets and validating assumptions and trigger points for solutions will become a pivotal role.

• Listening, filtering, and constructing user experiences that allow interactions and knowledge sharing will be essential. It will be again the analytics, the discovery process and the event management techniques will partly determine the value and richness of these engagements.

What about the need to build new capabilities?

• There is this increasing need to develop sense-and-response capabilities, increasing ambiguity and uncertainty over time will change our ICT thinking.

• A constant change or extraction continuously  from the cloud or data lake will require  flexible processes, constant adapting, needing highly agile responses

• There will be increased demand for visualization and managing decisions in responsive, agile and adroit ways. Constantly communicating the ‘breaking’ story will be essential.

• The increasing value of purpose-designed intelligent dashboards to allow decision-making and the appropriate information to flow to the decision-maker, as well as the governance trail of where, when and who made what decision becomes important.

• Whole areas of research, testing, experimentation, and modelling will become increasingly automated but the framing parameters will again require growing specialisation and understanding.

• The ability to test combinations, to work through countless data points will generate new possibilities but these again need clearly framing well, so as to avoid drowning in data, ‘for the sake of it’.

• The ability to engage in and across different communities will allow for richer understanding. These communities will be internal, business partner ones, customer and other stakeholder communities all contributing and engaging.

• The emotions, feeling and often unexplained human behaviour will always intervene somehow. It will depend on the robustness and strength and belief in automation on personal as well as organizational levels. This needs careful management the engagement.

• Lastly, and I think most important, you do have to keep asking that question of “what are you trying to do, resolve and understand” because data for data’s sake will just simply just let you drown in it, equally change for change sake.

We need to begin to really think through this as a complete redesign.

There are a host more areas to draw out in any digital innovation system we do need to surface and resolve.  To achieve that new position of understanding is a really hard piece of work required to determine and redesign the new digital innovation process.

It cannot be a simple ‘bolt-on’ job, it needs a radical redesign. We should grab this ‘moment of time’ to think what a new innovation system, fit for the post-digital age really should look and operate like.

Organizations will be in their search for understanding what needs to change within their innovation systems as soon as they realize that today’s design can’t cope.

What is needed depends on how each wants to ’embrace’ digital. It will need a real depth of understanding and working through.

I’m on it, are you? Its BIG and breathing down your neck. Welcome to the age of digital innovation.
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*** This is the final part of a seven part exploratory ‘open thinking’ about digital technology and its potential impact on innovation as we know it today. These have been published daily over the last week.

The intent was not to provide definitive answers so much at this stage, it is more about raising our thinking about our lack of providing an adequate innovation system for the changes caused by embracing the digital technologies coming towards us.***

The post So Welcome to the Age of Digital Innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

Now it might turn into a stampede, based on real ‘digital’ need.

We have made solid progress in the use of out-of-the box software for capturing ideas at the ‘fuzzy front end.’

We have developed pipelines and use product life cycle software systems to manage this through to commercialisation.

Yet today we still have a fragmented, often broken innovation process, very reliant on the manual processes, where the human intervention dominates.

Can this be changed? Technology must form a greater core of the innovation process.

We still are very reliant on stage gate intervention points, often more due to dogma and imposed oversight by committees occasionally meeting.

Decisions are determined by the human, based less on hard knowledge or dynamic intelligence, often these have tended to be thinner on the ground to validate concepts and judgement becomes highly personal and reliant on (past) experience. What can we change within this? There are leading practices to compare and contrast with but we do need to push this automating the innovation process further, in different ways.

Part six of a seven-part series

Perhaps all this can know change, with adopting a broader more connected engagement process and take this out, we can constantly engage in community collaborations to test and experiment than before.

We can quickly go into the market through digital technology to engage with our communities of interest to confirm or influence a design or concept and shape it.

We can gain ‘scale of insights’ quickly all the way through the new product life-cycle, validating, adjusting, adapting through to commercialization.

In the past innovation took a linear route, very reliant on a manual process.
I recently had some different exchanges with Jeffrey Philips, over at Ovo Innovation, a long time sparring partner on innovation thinking.

From his organization’s work he suggested top of mind there are five key activities, which are typically completed manually today:

1) Defining a specific challenge or opportunity, 2) Gathering trends and developing alternative future scenarios 3) Understanding/Validating customer needs through research 4) Generating ideas/solutions through brainstorming and from these 5) Developing and Prototyping ideas.

Given some more time I am sure this list would grow. Jeffrey certainly suggests many of these tasks can be accomplished through some form of automating the process, I’d agree.

I’d suggest for many the innovation process in organizations are even more manually conducted in collecting data, validating actions or decisions, communicating the status, working through project tasks, etc.

We are very reliant on manual systems for much within our innovation work.

I don’t think we can afford to let this continue, it often slows decisions and activities significantly down. I know of consumer goods companies that work on 18 to 24 months for incremental products from conception to commercialization. Is this good enough or just comfortable enough for those involved?

Market trends are changing faster and becoming shorter, so opportunity windows are narrowing. Risks of missing out are constantly increasing for those who are not focusing intently on that critical ‘time to market’ and not constantly streaming their innovation system, looking to automate it where ever they can.

Bob Cooper, creator of the Stage-Gate system recently warned, in their ongoing research data “did you know that”…..1) 76% of businesses have already too many development project for the limited resources available. 2) 81% of businesses have unbalanced portfolios full of small bets, 3) 90% of businesses have “few or no” high value projects in their development pipeline and 4) 75% of businesses profess to poor project prioritization.

What happens when all this digital knowledge and insights starts hitting our desks, having to work through a manual or semi-manual system seeking to capitalize on a ‘breaking’ opportunity? It will be a real choke point.

 Opportunity spots where we can speed up this manual process.

Jeffrey suggested some immediate places where there was some clear automating opportunities but we agreed these were ‘just the tip of the innovation iceberg’

• Many innovation teams have gathered and analysed trends by hand, attempting to forecast their impact in the future, to understand emerging needs and alternative future scenarios.

• Also market research has required intensive customer interaction, which has tended to be reliant on face-to-face or observation. Equally the heavy use of surveys and large data sets has tended to have significant human involvement. This is significantly changing through the use of technology and numerous analytical tools and predictive methods.

• Idea Generation has often completely relied on a number of people ‘brainstorming’ or generating ideas and we have learnt this needs to be less random in the event and more specific to problems we believe need to be solved.

• Then we have been reliant on traditional prototyping methods that again rely on people to form a crude representation of a concept or idea. These were reliant on ‘hand-crafting’ prototypes, reliant on people with some skills and scheduling the time to complete these but the extensive use of 3D printing is radically altering this.

We can recognize each of these has changed over the recent years. They are being automated wherever possible through pattern recognition methodologies, predictive analysis, trending evaluation methods where there is less human interaction but more interactions with a prototype, simulation.

Now with the recent introduction of 3D printing the designing  a prototype or even a finished product, has become highly valuable, it is shifting and beginning to disrupt many of the traditional ways of ‘machining’, undertaken in the past. For example, in the dentistry business where the dentist they can make the part using ‘on premise’ 3D fabrication.

We have been seeing better-structured approaches, mixed in with unstructured methods and framing techniques to pull out ideas, challenge existing, often entrenched thinking and breakthrough roadblocks to keep moving our innovation work forward. All continue to improve but still miss opportunities to automate in some way or another.

As we have used software to collect information and ideas at the front end (idea management systems) this has made the innovation process far more automated, interesting and participative.

What is needed is to push the thinking on how to automate the innovation process even more.

We see start-ups adopting agile methods, lean processes and new practices, new visualization tools and frameworks, and designing techniques as they are unencumbered by a legacy, yet for the most part, large organizations have been slow to adopt these on a wider corporate practice. They still experiment but do not adopt these as organizational practice although this is changing constantly as they value these techniques.

These need pushing deeper into large business organizations. We need a functional group that explores, experiments and seeks broad adoption of many different tools and pioneering methods in our organizations, so they become increasingly part of the daily toolkits we use. Design thinking, business model design, and lean for example, all should be adopted as everyday tools. Each helps innovation.

Can this be pushed further; can we perhaps become more radical?
Digital technology might be giving us the tools to shape our environments in very powerful and different ways. We can amplify what is going on, we can capture all the interactions, we can discover, explore and extrapolate better and at growing scale.

Less randomness, more of a quest for rational answers but we still need to frame the questions we want answered and that still seems to remain difficult for us humans to do. Even here technology can give us increasing intelligence to spot patterns.

There is so much to be realized, connected and enabled for the higher scale, richer, more innovative business outcomes but it is a massive undertaking that is only just being kicked off by the current ‘internet of things. It will eventually become the ‘integration of everything’ but the disruption and realization of what needs changing is only just dawning on many.

Managing digital knowledge that adds value and growth

External insights coming from market and customer intelligence will not fully take hold as Enterprise knowledge throughout the organization, without real, deep integration of systems designed to ‘receive, translate and diffuse’ valuable knowledge from all this digital information flowing in. A new system of knowledge adoption needs designing in.

Receiving the knowledge alone will not turn these into higher scales, richer, more innovation business outcomes that have real growth value unless we realize the massive ‘mismatch’ between digital flowing in and the physical attempting to cope with this.

We need to think about our innovation system designs a whole lot deeper to allow these new digital technologies and the insights to be worked through the innovation process. Speed is becoming ever more important, for new solutions to be turned out the other end as new innovations.

We need to design a complete innovation system otherwise we will be investing in a front-loaded area alone, limiting digital impact and that will not deliver the power of actual growth expected or needed from our innovation activities so as to deliver new valuable outcomes. Approaching the innovation process holistically helps.

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*** This is the sixth in a seven-part exploratory ‘open thinking’ about digital technology and its potential impact on innovation as we know it today. These will be published daily over the next week. The intent is not to offer definitive answers so much at this stage, it is more about raising our thinking.***

The post The Need to Automate the Innovation Process first appeared on Building Your Innovation & Ecosystem Intelligence.

Part five of a seven-part series

The outcomes of the investment are expected to provide clear returns and these might include but are not limited to:

1) different customization of services 2) quicker response to market trends in new offerings 3) identifying real-time cost optimizations, 4) concentrating on faster, more accurate decision-making to give new competitive edges 5) better and more holistic R&D 6) automating even further the supply chain management, 7) alter your approach channels to market, 8) move your business into new adjacencies or even white spaces and finally 9) design new business models and value propositions.

There will be lots of new moving parts to grapple with to be future innovation agile.

Equally, our senior managers will be digitally challenged

As machine learning or digital inflows occur, the pace will become even more rapid and the leaders will be called upon to create the new innovation forms. The mental capacity and physical adroitness will continue to multiply through digital technologies and the need to be agile in responding. There is going to be significant advances in cognitive work but will this be human or digital brains doing the work?

If we foresee a deeply driven digital world, the new place for human intervention is “where do I actually add value and where do I need to get out-of-the-way and let data take me?”

So we are going to be potentially more data-driven, less intuition driven. Your whole domain expertise will eventually be stripped away.

The challenges within the leadership of our organizations are to somehow envision how the physical world and digital world can be ‘pulled’ together.

That critical need of applying the different forms of intelligence and experiences and provide the ways to network and build from these ideas and insights into tangible values that fit with the organization’s objectives.

The key to leading in a data-driven world recently was suggested in a McKinsey article on the Manager and the Machine will be 1) learning to ask good questions, 2) attacking exceptions, 3) tolerating more ambiguity and 4) focusing as much as possible on employing ‘soft’ skills where insight gets turned into messages that resonate with the organization to see as innovation potential will require that human touch.

How will digital automation improve and balance our innovation management?

As data flows in we will need to rationalise the decision-making, we will be seeking out for the gathering of data more fact-based observations. The intervention of personal opinions and “experience” will become highly challenged and hopefully on the endangered list.

We can look to insights as possibly better predictions of success by lessening the risk factors of no knowledge or very limited understanding and underpin the assumptions with ‘trends’ and rich insights to validate directions and emerging solutions

We will be able to explore the ‘worlds’ trending on those topics relevant to our needs, knowledge and innovative thinking. Exploring consumer behaviours, technology trends, competitor monitoring and significantly granular insights to shifts taking place in real-time and near-time.

We might discover the unexpected and the surprising and not rely on instinct, sixth senses or ‘our past experiences.’ This may increasingly clash in the validating, we need to ensure this increase in insights will yield better ideation. As time goes by and we become more reliant on digital technology our idea management thinking will become distinctly different, less based on a hunch, feel or (sadly) experience.

We will be even more under pressure as if the data is ‘open and common’ for all to ‘trawl and gather’ then you are in a race to capitalize on this before your competitors is able to learn or react to it.

Through validation we can constantly confirm or question the business case, and we can test hypotheses and experiments. We can check assumptions for validity far more and across broader communities than in the past.

Having data, and creating a history you can equally be more backward looking to judge success and failure and use these different understanding and analyses to design more predictive forward-looking models and framing techniques that capture differently or improve your pattern recognition.

The growing science and value of analytics for innovation

Innovation analytics will become an integral part of the entire innovation life-cycle to make smarter decisions and to optimise the innovation performance along its value building chain.

Having clear data-analytic strategies that break down the information into something commercially useful will require more searching for ‘weak signals’ that contain those real nuggets of insight.

The early mover has to have a speed and pace of decision much higher. The emergence of customized dashboards will dramatically advance but working on the parameters that feed into these will be a real challenge.

The need to analyse, synthesize, transform into actionable events and value-enhancing insights will be based more on fact-based decisions but the human interventions become more responding to exceptions not stage-gate managing everything.

Analytics will evolve into providing answers or guiding you to create descriptive answers, situational to why this is happening, predictive in what this might mean or trending towards, prescriptive in validating choice options and finally simply evaluating the risks, the choices of doing something or not due to this data and insights.

Adjusting our thinking on risk

Technology insights can provide a better mitigation risk, it can equally fine-tune innovation but it can equally make it far more complicated. Massive amounts of data can complicate decision-making, determining the right decisions and next steps.

Technology will require opening up the present risk mitigation process to capitalize on emerging opportunities at greater speed and higher levels of compromise, to meet that emerging opportunity ‘seen’ requiring it to be turned into commercial offering quickly, so competitive advantage can be gained.

Getting the parameters right, this digital innovation criteria will potentially determine the direction of the organization and where it places its resources.

McKinsey talks of democratizing and managing will be determined more by pattern insights, and clear insights, less upon waiting for a top manager’s decision as the defined strategy and business development directions become sharper, enabling this ‘decision-making’ to be made much closer to the market or the information source.

The urgency of Leadership

Leadership will have to become far more effective in decision-making and digitally savvy, so as to provide the guidance and strategic frameworks required for the governance and direction digital technology is required to go, to meet the organization’s stated objectives, and those will change constantly as better insights flow in. Defining those needs and the expected returns does sharpen everyone’s minds.

Tom Davenport of Babson College and MIT made some helpful suggestions about the general use of the phenomenon of big data, and add its project attributes so leadership understands its increasing value.

He suggests these are 1) describing the data you are using, 2) where the data comes from, 3) the problem you are wanting to solve and 4) wherein the company you will use the insights to solve what. This as he suggests “provides clarity” and we all need that with the present easy use of “big data,” which impresses no one.

The changes wrought by applying all the different digital technologies promise far more than the adoption of a more fluid core that Haydn Shaughnessy has written about,  as “understanding a new hierarchy of enterprise needs.  Adopting a new, adaptable infrastructure where technology, humans and competitive conditions intersect and can interact in real-time.

Leadership needs to respond quickly to the demands and additional strains this will place on their organization to provide guidance, strategic direction and above all the right resources to capitalize on all the changes this will bring. To expect to achieve a ‘real’ return from the investments being made or asked for in new growth and innovating value.

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*** This is the fifth of a seven-part exploratory ‘open thinking’ about digital technology and its potential impact on innovation as we know it today. These will be published daily over the next week. The intent is not to provide definitive answers so much at this stage, it is more about raising our thinking.***

* Sopheon through its software applications have been outlining some of their arguments for improving innovation due to big data and analytics and these helped me kick start part of my own thinking here.

The post The need to respond quickly to new business objectives first appeared on Building Your Innovation & Ecosystem Intelligence.

It must be a little overwhelming when many responsible for IT have for years not had any strategic involvement and not been given clear line-of-business oversight.

Business management equally has over the years built up an ‘arm’s distance’ to IT and found ways to overcome barriers they felt were seemingly put in their way when it came to ‘bringing in’ the technology they deemed as essential.

Something needs to change going forward. Both the business manager and the IT need to find ways to exchange, collaborate and share. It is in their ‘vested’ interest but more importantly for the future health of the business itself.

Part four of a seven-part series

Over a number of years IT and the business seem to have grown apart. IT worked on keeping all that surrounds the ‘systems of record’ and tended to push away or outsource many of the ‘systems of engagement’ to others, either third parties or line-of-business.

Email, for example, stayed within their domain but collaborative tools, the building of online communities, and supply chain systems tended to be handed over to the expert group and they provided the ‘back-end’ support.

Much within IT has been handed over to lines of business to design and manage. Will this need to change back?

Today, the lines of business are rapidly handling increased system designs to meet their own needs and are seemingly encouraged to do so. IT often seems to have been assigned the back-end task of ensuring they can work, are safe and don’t corrupt those all-important organizational ‘systems of records’.

The changes in customer experiences and the engagement within these communities, the open innovation activities prompted by research and development, the stand alone systems for manufacturing design and improvements, have all seen a massive proliferation of either independent systems with minimum integration, or systems to site upon systems, adding complexity and poor line of corporate oversight.

An awful lot of business intelligence is sitting in silo’s where there is limited ability or even no incentive to explore these in different ways. The Enterprise core is limited and not really connected to much of the value-generating parts as we would wish. Knowledge is not flowing across and up and down organizations unless with some considerable manual effort.

There is a time for real change – technology and business need to be redesigned

We are in need of recognizing this new wave of external connected technology needs to be well-connected within our organizations. There are so many forces of constraint, forces of proliferation that need to come together but this is a massive, significant task for an organization to signal its (final) determination to achieve.

The implementation of ERP for many was a painful experience, not because it was not needed, it seemed such a wrenching change. Any significant technological overhaul will make that set of experiences a ‘walk in the park’ compared to this set of challenges that is being thrown at us today. The changes we will be facing to accommodate new technologies and their realization of value will need an even greater evolution, ERP will fade into the background as a new Enterprise Innovation Planning (EIP) system evolves

The real need is to deliver a new integrated engagement platform

We need not just a new innovation management system, we need a modern engagement platform. We need to integrate and sync so many transaction and stand-alone systems that have been allowed to proliferate over the years to meet specific business needs. The growing pressure will be demanded to find solutions that provide a cohesive and business-focused approach to the new social enterprise where we seek engagement at scale into a multiple array of communities and advocates that has data and innovation as its core.

There is such a business / IT / customer divide where the social push is shifting and still very emergent, where the new competitive advantage will be based on ease of acquisition, ease of use, clarity and diversity of choice and variety so innovations will be more tailored to the individual.

The demand for increased autonomy, personal choice will come up against the organization that is totally unprepared in adapting to this rapidly changing world. Organizations are lacking the right type of resources and a comprehensive view of what needs to be connected and integrated, what is presently underway is going to change many of our current industries today as they all become partly a software businesses.

How can we connect, enable and deliver better innovative outcomes?

There is so much to be realized, connected and enabled for the higher scale, richer, more innovative business outcomes but it is a massive undertaking that is only just being ‘kicked off’ by the current internet of things. It will eventually become the integration of everything but the disruption and realization of what needs changing is only just dawning on many.

External insights and Intelligence will not become Enterprise knowledge that flows without real, deep integration. Receiving the knowledge alone will not turn these into higher scales, richer, more innovative business outcomes that have real growth value unless we realize the massive ‘mismatch’ between digital flowing in and the physical attempting to cope with this.

I would think unless the innovation systems within organizations are not dramatically altered and that is calling for a massive investment and some really tough strategic decisions of what and where to place those strategic bets and much of the technology needed is only being designed today that focuses mainly on the incoming part.

A painful and frustrating journey is ahead of us all

Turning big data and its insights into commercial successful innovation outcomes may be a very painful journey for many organizations. Business and IT have got to find radically different ways to collaborate and align.

We need new models of work, more community-centric, non-hierarchical, dynamic and fluid, in a sharing economy where the evolution of apps and new devices will all have an increasing impact, based on collaborative technology. I’ve previously written on this as “the proliferation of transitory moments”

The enterprise design will be radical in redesign and upheaval.

Much of the hype today about all this big data and the analytics behind it is great but the handoff back into existing infrastructures will mean most of it will never be realizable. It certainly can’t be handled by today’s innovation management system where knowledge is lacking and physical intervention is built on the wrong premise of managing innovation activity.

We need to review organizational engagement. Much has to change, be uprooted and completely revisited to begin to design a new digital and physical integrated innovation system.

To master digital technologies and what that can bring in new innovation and value requires a coordination and collaboration of business and IT, each needs to become involved in what the other is doing, thinking and planning and make these plans integrated through a new organizational set of process and procedural designs.

We need to reconsider enterprise architecture for this 21st digital century where increased autonomy, choice and resources can adapt, disrupt, refine, grow and renew constantly in a digital enterprise collaboration that allows data and voice to be heard….and acted upon.

I liked a comment recently from Beth Comstock, the Senior Vice President of GE in a recent interview on the imperative of speed commented: “If we left it up to each business to figure out their data and software, we would not be taking advantage of the scale of the company”.

She is totally right, decisions being made today around digital technology are broad room and highly strategic. IT going forward shapes the organization’s future.

Who is going to take the lead in your organization to design digital technologies into the very fabric of the organization? It can’t be left to one person or another, this is a total leadership challenge.

IT need to find ways to engage fully within the board room, across all line of business and drive the changes up into each conversation and strategic discussion for the foreseeable future.

How organizations design and connect digital technologies with profitable innovation outcomes will decide most organization’s futures going forward, markets, customers and investors will be judging this ability very critically over the next few years.

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***This is the fourth of a seven-part exploratory ‘open thinking’ about digital technology and its potential impact on innovation as we know it today. These will be published daily over the next week. The intent is not to offer definitive answers so much at this stage, it is more about raising our thinking.***

The post IT is Struggling to be the Digital Technology Master first appeared on Building Your Innovation & Ecosystem Intelligence.

The discovery of insights from all this embedded intelligence, social activity and data analytics is leading us to realize a potentially significant wave of new innovation opportunities from this digital knowledge.

The question is “are we internally ready for this?” Are our innovation systems and structures able to adapt to a need for exploiting ‘breaking’ opportunities where speed and agility become a critical deciding factor to capitalize on breaking commercial advantage by tapping into all these fresh insights?

Part three of a seven-part series

It is through this combination of people and ‘things’ connecting into our businesses that we will be able to extract new data to give us insights that can lead to completely different innovation opportunities.

The concept of (big) data flowing in, discovery being made from all the analytical insights that leads to innovation does work for some but will it for many?

I tend to feel the hype or promise of digital technology is running ahead of reality. There is no question that each organization has to work through this connection of the digital technologies in their own understanding and needs, of what the whole gambit of IoT will bring them. That will be a set of tough calls, decided on thinking strategically, not just simply listening to all the ‘urgency and hype’ presented today.

Yet most organizations have to be careful that the idea of the digital promise does not run so far ahead of the realization of a ‘reasonable’ return for all the investment and potential disruptive that these changes will demand and bring. For some it requires a step process to feel their way, for others they will go for the big bang approach.

Each will disrupt and alter the way we conduct business. Either way, it is not just this ‘need to change’ it is looking very hard at the investment returns and risks associated with this. Managing any potential bigger innovation outcomes I would put down as a ‘risk and critical choke point’ that needs different solutions

I do really get stuck on the downstream from these data insights.
These insights will need to be turned into initial commercial ideas and potential ‘realisable’ concepts that can give new growth and value into the organization.

If we are expecting a deluge of new ideas to commercialization then is our innovation pipeline fit for this new level of purpose? I have serious doubts

Without doubt digital and physical operate at really different speeds.
Huge amounts of data can be interpreted through specific algorithms but these will have to have set very clear parameters set within them to be of any worth on what we believe is what we need.

We can go through the analysis and rely on the analyst’s understanding but will they actually have the necessary experience of what is useful and what is not?

Or will that ‘analysis’ be turned over to the marketing team or research and developers, in its raw form and they become responsible for relating the data into something that might have some ‘tangible’ value. Will data scientists sit within these teams or in some remote centre that creates a new type of ‘knowledge’ void?

By exploring this data, yielding their insights, can go through the internal innovation pipeline system that is presently in place? Are those tasked with turning insights into innovation have the different skills, authority and abilities to make ongoing data interpretation, where re-validation will become the constant ongoing norm.

How will they see different patterns and opportunities and try to fit these into their current view of the world? Can the innovation pipeline cope with even more business opportunities? The human mindset will need to re-orient to receive new digital information in ‘informing’ ways.

Are we seeing a re-run of the tortoise and the hare?

Digital happens at lightning speed, our physical world operates at a snail’s pace equivalent. So we want to push all these digital insights through a manual innovation process – yeah right! Expectations are rising, as dollars are being spent on re-equipping out IT systems to update with this range of digital technology, that the line of business is demanding, they are all arriving around at the same time.

The end game stakes are rising with every decision made or not yet is the organization ready to receive this deluge of digital technologies and be able to translate them into hard, quantifiable returns?

So where does the agile, shorter business cycles, faster innovation come into play. Really though our existing innovation systems, that are totally reliant on human interactions? How will the well set up stage gate systems of approval and validation cope? Digital technology is potentially fast, the human is still very slow in comparison. Is this a heading for a miss match or ways to build fusion differently?

I have written in the past “Innovation has layers that sheer against each other” where ““Slow constrains quick, slow controls quick” These unnatural built-in tensions build up and create this shearing effect. They grind against each other, like tectonic plates that force further disruption and upheaval.

The story of the tortoise and the hare is delightfully told here. “Once upon a time there was a hare who, boasting how he could run faster than anyone else, was forever teasing tortoise for its slowness……”

Technology is racing ahead like the hare, the reaction of our existing systems is a little like the tortoise. Technology will simply, underdeliver on its promise and wait for our tortoise in systems, organizations’ ability to respond in radically different. more nimble and agile ways or simply go further downstream to help the tortoise along by making more of the innovating process automated.

Fragmentation is everywhere and different communities of interest are demanding real change

Then we have the emerging fragmentation of the channels to and from the customer. As we listen more intently we will need to develop not just our analyse, but our filtering and listening skills and each human has different levels of this tolerance to all arrive on the ‘same page’ of insight and potential opportunity.

All sorts of new communities start to ‘cloud’ the decision-making. Those coming from the marketplace, the devices being used, the evaluation of usage and value, the definition of different communities, and the building of new business partner communities.

Then the whole thinking through on attempting to gain a new sense of engagement within your own workforce, convincing them that this time it will be all different.

The disruption to their work will eventually deliver a different environment that is better, whereas they will be busy grappling with new skills, even faster paced work and yet again, will it settled down into quiet acceptance, limited engagement and enthusiasm?

As we ‘slice and dice’ even more through digital insights, markets will fragment, even more, products and services have the potential of offerings that can be tailored than ever, yet complexity in our offerings will dramatically rise. We need to find ways to structure and adapt to this, otherwise, risks rise as mistakes are made, and customers move away and not closer due to this lack of a comprehensive engagement strategy.

The question remains “so how significantly different will all of this be?”
What will we need to address? How bold and radical will this need to be and can whole organizations re-orientate and change their established ways to exploit digital technologies?

It will call for some fairly bold management decisions and growing risk in the undertaking but more than likely have a greater risk of not being well thought through and designed. Bolting this onto existing systems, many manuals does not sound to even be a compromise, although I’m sure many will initially try to achieve, creating real operational problems.

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***This is the third part of a seven part exploratory ‘open thinking’ about digital technology and its potential impact on innovation as we know it today. These will be published daily over the next week. The intent is not to offer definitive answers so much at this stage, it is more about raising our thinking.***

The post Aligning digital discovery with physical innovation outcomes. first appeared on Building Your Innovation & Ecosystem Intelligence.

Will digital begin to dominate our innovative thinking, will we lose this randomness, this spark of human creativity or will it be allowing this to connect multiple strands in new, more exciting ways? How are we going to adjust to the changing way technology will impose itself on our innovation activities and needs?

How will all this Mobile Connectivity, Cloud Computing, Social Media, Crowdsourcing, Internet of Things, Industrial Internet, Big Data, Analytics, 3D Printing and Scanning be presented and managed as a part of successful business scenarios and intertwined with changes in social behaviour?

Are our existing innovation systems ready for this potentially set of sweeping changes in knowledge inflows and translation, so they can be successfully commercialized into new innovation?

Part two within the series of seven

It is through searching for and seeking engagement in the ‘wider’ world we will begin to make greater connections and receive potentially enormous amounts of (raw) data, about interactions, performance, possible issues and connecting, previously fragmented and dispersed information and through analytics turn this into emerging valuable knowledge.

Rational and Random thinking can be accommodated with digital technologies.

Technology has spawned operating systems that are set up to be searching for the rational, by setting up the system hierarchy, by ensuring a coherent input of facts and data, you can automate the process and generate greater outcomes that give you scale, make considerable processing saving, and gain increasing efficiencies by the constant quest for improvement and automation.

We are equally seeing more random pattern recognition, matching, and ‘crunching’ data to offer up multiple scenarios. Then we begin to see equally a big move in where you store this data, those ‘data lakes’ where you can constantly revisit and drawdown raw data, in new and different ways. For managing significant data the cloud offers a significant alternative to on-premise.

Thankfully the quest to extract intelligence out of the raw data has equally kept the randomness side moving along in equal measure. It is this side that is making the big leap through these emerging technology changes of social media, smart mobility, sensors and other machine intelligence that is generating vast new levels of data.

This big data requires analysis and the analytical aspects coming from exploiting different algorithms, will allow for greater insights into all the activities taking place.

There is even more of a promise that artificial intelligence can combine with human intelligence in significantly different ways, to generate new growth and deliver those richer, higher scale, more innovative business outcomes, that this investment being undertaken will be required to bring.

What needs changing is the innovation process to accommodate these changes

The arrival of big data is full of bytes, both terabytes but also strategic bites! We seem to be in a really evolutionary period, with the explosion of change taking place in the post-digital world of cloud, big data, and social and interconnected devices.

The discovery of insights from all this embedded intelligence, social activity and data analytics is leading us to potentially manage a significant wave of new innovation opportunities from this digital knowledge.

Managing this transformation is a real strategic and operational challenge.

We will need to transform much within our systems but more importantly to orientate our skills to receive, translate and diffuse new knowledge, in significantly different ways.

It is through this combination of people and ‘things’ connecting to our businesses that we will be able to extract new observations, to give us insights that can lead to completely different innovation opportunities.

That is the promise of this ‘fat juicy carrot’, providing fresh growth, new innovation opportunities, that have real value and worth.

Insights and ideas will become a real log jam attempting to enter the innovation pipeline

As it stands I can see a potentially damaging build-up, or a log jam of promising concepts all desperately trying to work themselves through the innovation funnel. Either decisions or the existing disciplines have to be radically altered, where we take on a much higher risk profile to enable these to move from idea to finished product or new service, or we accept the consequences of different failures, growing frustrations or variable revenue metrics against the cost invested.

Cranking up the innovation throughput needs different approaches than at present. The innovation pipeline today is very manual, it needs human intervention, in decisions, in inputs, in what is communicated, what is approved or dropped. Innovation gets often weighed down by human intervention.

Will this change, if so what is required is for the innovation process to become more automated where predictive decisions or probability ratings are presented more from technology design and digital information? What changes are needed, who will be willing to invest in this radical redesign of the innovation system?

Radical smart-connected and digitally discovered concepts will radically alter the value proposition as I have outlined before. These will need the internal business structures to alter and deliver new business models to respond in unique market ways.

That will call for bold leadership and radical redesigns of much within our organizations to allow greater innovation to flow out to the market to capitalise on these increasing levels of insights coming from a more digitally connected front end.

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***This is the second part of a seven-part exploratory ‘open thinking’ about digital technology and its potential impact on innovation as we know it today. These will be published daily over the next week. The intent at this stage is more about raising our thinking on what might need changing or at least re-orientation within our innovation management approaches.***

The post Is the balance in innovation activity about to change? first appeared on Building Your Innovation & Ecosystem Intelligence.