There are seemingly so many intervention points it can get bewildering.

The innovation environment can be made-up of how well you collaborate and network, the level of the group and individual interactions, the presence and commitment of leadership towards innovation, as well as the organizational set-up and structures.

You can explore the make-up of the innovation environment in so many ways.

So what makes up the environment to innovation?

It is the culture, management and its people who have a mutual dependency. Culture can enhance or inhibit the tendencies to innovate, it certainly has a profound influence on the innovative capacity and provides the rich nutrients to nurture innovation or kill it. Culture has always been regarded as a primary determinant of innovation.

To foster innovation and its environment, key levels of management and individuals must be committed to creating an environment and culture that promotes creativity, be engaged and promote the ability to promote change in nimble, agile and flexible ways to meet changing conditions in the market place and with customers.

It is this creativity through the innovations that are flowing through the organization that often needs a critical focal point to create a change that has an impact.

Triggering stimuli for change

The job of any change initiative is to give stimuli in the actions, transactions and interactions in the pursuit of innovation. These come from changing practices but focusing on the critical interaction between people and the situations that delivering innovation demands.

Altering an organizations workplace environment comes from focusing on the person’s creativity and the organizations climate conditions to deliver on its innovation need.

From what I gather, there are over 40 different assessments you can use for creativity and innovation. Within the best known, most cited and researched two still stand out for me as tested and valuable. These have stood the test of time and I believe provide a great place to start assessing your climate and what motivates a more creative / innovative environment.

There are two climate assessments for creativity assessments that stand out

The first is the Climate for Creativity (KEYS) developed by Terisa Amabile and the other one is the Creative Climate questionnaire developed by Gören Ekvall. Both came out in the late nineties but seem to have stood that ‘famous’ test of time.

I have shown in Ekvall’s model a modified version introducing the split between the attitude for work and its five part make-up and work atmospheres five parts.

I’m going to focus more on Ekvall’s model as it is the one I have used more and it ‘feels’ more comfortable for me.

Amabile’s model contained 17 factors, whereas Ekvall’s model has only ten factors. There have been a number of comparative studies on these two. One argument being that less factors allows for a more open aspect but less controversial.

To be honest I like them both as they each have slightly different ways to look at creativity.

Firstly though, let me outline Amabile’s model.

It comprises three key elements: resources, management practices and organizational motivation. Each of these elements interacts with one another and has an impact on the resulting level of innovation.

In Amabile’s structure the assessment breaks answers down into two criteria of measuring current performance and seeking perceived importance and attributed 100 points per section to gauge relative importance using a simple Likert-type scale with anchor phrases at each extreme.

For her Organizational Motivation section, a questionnaire is broken down into

• 1) Explicit value of creativity,
• 2) Attitude to risk,
• 3) Pride in Employees,
• 4) Enthusiasm for Employees,
• 5) Forward-facing strategy and
• 6) Management systems.

Then for her Resources part:

• 1) Time to innovate,
• 2) Staff Expertise,
• 3) Access to Funds,
• 4) Material Resources,
• 5) Information Resources, and
• 7) Training

Then her Management Practices, it is broken down:

• 1) Project autonomy,
• 2) Team Selection – Skills,
• 3) Definition of Goals,
• 4) Supervisor Support and
• 5) Team Selection – Personality.

Ekvall’s model

Ekvall’s model was divided into two halves, each comprising five factors. This also allowed Ekvall’s model to be split over two pages, with the first entitled ‘atmosphere for work’, and the second entitled ‘attitude to work.’ Maybe this is why I like it for this defining split for deepening the conversation.

Again to use this you attribute 100 points per section to gauge relative importance using a simple Likert-type scale with anchor phrases at each extreme.

Organizational Climate for Creativity and Innovation (1996) is the article that sums up all of Ekvall’s research within organizational climate and creativity throughout the second half of the 20^th Century.

This was where Ekvall formalized his ten dimensions of creative climate (challenge, freedom, idea support, trust / openness, dynamism / liveliness, playfulness / humor, debates, conflicts, risk-taking, and idea time) as well as described the implications of the Creative Climate Questionnaire (CCQ).

The ten dimension factors from Ekvall’s creative climate questionnaire.

Attitude to Work dimensions

Idea Time: amount of time people can use (and do use) for elaborating new ideas. In the high idea-time situation, possibilities exist to discuss and test suggestions not included in the task assignment. There are opportunities to take the time to explore and develop new ideas. Flexible timelines permit people to explore new avenues and alternatives. In the reverse case, every minute is booked and specified. The time pressure makes thinking outside the instructions and planned routines impossible.

Risk-Taking: tolerance of uncertainty and ambiguity in the workplace. In the high risk-taking case, bold initiatives can be taken even when the outcomes are unknown. People feel as though they can “take a gamble” on their ideas. People will often “go out on a limb” to put an idea forward. In a risk-avoiding climate there is a cautious, hesitant mentality. People try to be on the “safe side” and often “sleep on the matter.” They set up committees and they cover themselves in many ways.

Challenge and Involvement: degree to which people are involved in daily operations, long-term goals, and visions. When there is a high degree of challenge and involvement people feel motivated and committed to making contributions. The climate is dynamic, electric, and inspiring. People find joy and meaningfulness in their work. In the opposite situation, people are not engaged and feelings of alienation and apathy are present. Individuals lack interest in their work and interpersonal interactions are dull and listless.

Freedom: independence in behavior exerted by the people in the organization. In a climate with much freedom, people are given the autonomy and resources to define much of their work. They exercise discretion in their day-to-day activities. Individuals are provided the opportunity and take the initiative to acquire and share information about their work. In the opposite climate people work within strict guidelines and roles. They carry out their work in prescribed ways with little room to redefine their tasks.

Idea Time Support: ways new ideas are treated. In the supportive climate, ideas and suggestions are received in an attentive and professional way by bosses, peers, and subordinates. People listen to each other and encourage initiatives. Possibilities for trying out new ideas are created. The atmosphere is constructive and positive when considering new ideas. When idea support is low, the automatic “no” is prevailing. Fault-finding and obstacle-raising are the usual styles of responding to ideas.

Work Atmosphere dimensions.

Conflict:  presence of personal and emotional tensions in the organization. When the level of conflict is high, groups and individuals dislike and may even hate each other. The climate can be characterized by “interpersonal warfare.” Plots, traps, power and territory struggles are usual elements of organizational life.  Personal differences yield gossip and slander. In the opposite case, people behave in a more mature manner; they have psychological insight and control of impulses. People accept and deal effectively with diversity.

Debate: occurrence of encounters and disagreements between viewpoints, ideas, and differing experiences and knowledge. In the debating organization many voices are heard and people are keen on putting forward their ideas for consideration and review. People can often be seen discussing opposing opinions and sharing a diversity of perspectives. Where debate is missing, people follow authoritarian patterns without questioning them.

Playfulness/Humor: spontaneity and ease displayed within the workplace. A professional, yet relaxed atmosphere where good-natured jokes and laughter occur often is indicative of this dimension. People can be seen having fun at work. The climate is seen as easy-going and light-hearted. The opposite climate is characterized by gravity and seriousness. The atmosphere is stiff, gloomy and cumbrous. Jokes and laughter are regarded as improper and intolerable.

Trust/Openness: emotional safety in relationships. When there is a high degree of trust, individuals can be genuinely open and frank with one another. People count on each other for professional and personal support. People have a sincere respect for one another and give credit where credit is due. Where trust is missing, people are suspicious of each other, and therefore, they closely guard themselves, their plans, and their ideas. In these situations people find it extremely difficult to openly communicate with each other.

Dynamism / Liveliness: The eventfulness of life in the organization. In the highly dynamic situation, new things are happening all the time and new ways of thinking about and handling issues often occur. The atmosphere is lively and full of positive energy. There is a kind of psychological turbulence that is described by people in those organizations as “full speed”, “go,” “breakneck,” “maelstrom,” “and the like. People get caught up in the excitement and energy. The opposite situation could be compared to a slow jog-trot with no surprises. There are no new projects; no different plans. Everything goes its usual way.

Over the years the Ekvall questionnaire has been collected and benchmarked.

The value of seeing a significant part of an organization of 7,000 take this test and then be compared against others completing the CCQ can be valuable.

Taking one example between a group designated as innovation organizations against those regarded as stagnating would deliver a spider web visual showing the difference and where the gaps are to focus upon.

The discussion from producing such a view can become very telling. Of course this is a snapshot but it can become a powerful enabler to change. Improving the climate, over time changes the culture and conditions for how an organization views innovation.

Perceptions need to be broken down, clarity on a pathway forward navigated and negotiated with a leadership that is providing consistent and determined support so that the climate and conditions are constantly improving the environment for innovation – the culture learns to adapt and recognize this as the everyday ‘way of working.

Summary

There are many variables that influence people’s perception of the working environment and by focusing on understanding the climate and the possible potential to change this, in what it can provide the prime contributor to providing a huge impact within your innovation environment.

******

Publishing note:  This blog post was originally written on behalf of Hype and with their permission, I have republished it on my own site with some small adjustments. I recommend you should visit the Hype blog site where they have a range of contributors writing about a wide-ranging mix of ideas and thoughts around innovation, its well worth the visit.

The post Making an impact on an organization’s innovation environment first appeared on Building Your Innovation & Ecosystem Intelligence.

They are being forced to deal in increasingly complexity and environmental turbulence and ‘adapting the appropriate response’  remains increasingly a difficult one to master, within the existing regime and structures.

On the one hand the value in stability is still essential, working within specific routines and practices gives a clear ‘path dependence.’

This allows for efficiency and effectiveness to be constantly at practice, constantly building the problem-solving processes, so as to master tasks in complex environments to resolve ‘known’ problems in ‘given’ ways.

We need to become increasingly fluid but how and why?

Yet there is considerable discussion around changing structures and models to become more adaptive, agile and fluid, to react and deal with this increasing turbulence occurring all around us.

We need to react and become more responsive, becoming more adaptive to changing environments and business challenges, that are often unknown, unexpected, or not yet explored or exploited.

The need for a different innovation interplay

In a recent series, of introducing the innovation interplay, co-authored with Jeffrey Phillips of Ovo Innovation, we discuss how change needs a higher appreciation and focus within any innovation design.

We go on and suggest the importance of thinking new innovation design is increasingly coming through the business model and this requires increasing undertaking of change.

This change thinking is not just for the innovator, but for the customers and markets that any innovation is channeled towards but also, in how it has a real impact on the dynamics of current competition and the potential effect on competitors.

Designing deliberate change into innovations eventual outcome, increasingly through new business models, is a powerful point of real advantage that needs greater leveraging.

So we have this dilemma of needing stability but trying to build increasing fluidity

Yet today our organizations are far too rigid, they are not adaptive or agile enough to really exploit innovation to the full. They struggle with this organizational constraint imposed by the singular, or dominating pursuit of efficiency and effectiveness at the cost of ‘fluidity.’

Organizations and individuals see change far to often in negative terms and not in the way innovation can bring positive change that seeks constant, ongoing adjustments to deliver the best, optimal solution.

How can both work alongside each other? Many theorists have suggested, of having in place the ‘ambidextrous organization.’ This would require organizations to be design organizations in their structures, people and processes to either be focused on ‘being efficient’ or being ‘change orientated’.

I have been drawn to this dual system of ambidextrous as it helps resolve one of the consistent stumbling blocks for innovation to ‘take hold’ and evolve.

Innovation is constantly fluid, needing to be adaptive as we learn and adjust to new learning and this is constantly requiring a very change orientated approach. Often innovation comes up against a rigid system and for many “it just seems not to fit” and gets rejected as not appropriate to us.

Innovation struggles as it often remain outside the prevailing system. Innovation constantly challenges the dominant mindset within organizations, who like the idea of innovation but are mostly measured to drive efficiency and effectiveness, keeping highly focused on the short-term performance as their role, reward, advancement and key to ongoing career success.

So innovation ‘sits outside’ their domain of focus. Something needs to change if innovation is really important.

Yet the very essence of our stability in organizations is under threat.

There is so much change being undertaken, the growing call for quick improvisation and ad hoc responses all needs to take us away from those rigid processes into open and far more fluid ones.

The solutions of fluid, agile and adaptive are aiming to develop highly flexible and responsive organizations as an attractive answer to manage in more uncertain times as the way to move forward. The ability to make this very defining and shaping move in any organization does seem very fraught with risk.

We do need to extend our thinking about fluidity far more, so let’s initially step back to see if we can then move forward into a more fluid organization..

There is no doubt a classic change model that needs an update

The classic “unfreeze > change > refreeze” approach to change just does not work anymore. This still remains one of the most classic change models as a three-phase model, introduced by Lewin in 1947, and became the basis for many subsequent change models.

Lewin’s change model seeks to “unfreeze” the existing conditions, in order to allow “change or transition” to occur, so as to then arrive at a new state of hopefully higher capability or competence, at which point the operating model is again “frozen” or “refreezes” into its new state.

Certainly this model is becoming very outdated and somewhat dangerous from an innovation perspective, for two reasons. First, the model anticipates resistance to change rather than engagement with change.

Second, the model assumes an eventual “refreezing” state, where the company remains in stability, without change. Today we are in need of being in a state of constantly improving our operating model and exploring growth through far more business model evolution to influence markets.

Shifting to a different change model needs a high level of transition

We need to ‘unfreeze’ through recognition of our present rigidity > We should make a ‘transition’ through experiment and exploration >

Finally, we should not ‘refreeze’ as the recommendation of past views has suggested, we should build the adaptive, agile and fluid abilities required for today from learning, collaborating and embracing a constant change mentality.

To achieve a more organic fluidity, moving from hierarchies to networks, from formal rules and high levels of coordination into far more spontaneous interactions, improvised processes that resolved specific issues and the constantly forming and dissolving project teams where far more lateral organization-wide communications take place is a set of real challenges.

Everything seems to be flowing faster and we have to respond

We are seeing far more fluidity in relationships where the knowledge is flowing within, across and between organizations. The boundaries are blurring, that increasing fuzziness needs shifting our style of decision-making and solution finding.

There is also this growing sense that innovation is endless, it never stops but simply shifts from one stage to another, often looping back to be re-evaluated and thought through. The old linear process is not working, learning and adjusting is a constant all along the pipeline development process and requires a higher level of fluidness to deal with it.

There is this nagging feeling of relentless destruction or disturbance, the very opposite of the stable equilibrium we seemed to enjoy in the past. Those that become capable of managing the constant change and disequilibrium will thrive.

Yet we need to face this paradox of fluidity and stability.

Those growing conditions of uncertainty and complexity also need boundary building, identity formation and problem-solving architectures that are stable and can provide replication of essential actions or activities.

We need to seek out and maintain yet constantly challenge to “undo” and redesign.

We are still struggling with the dominant linear logic of much of what we do in organizations, and often this constrains innovation, restricts us to provide radically different business models and limits our abilities to change fast enough. We are learning to be far more adaptive in our learning but this is constantly meeting up with the resistance of this linear logic.

What would help us build a higher fluidity into the design of our organizations?

Firstly what makes up the competencies of fluid?

Here we provide a list that has many aspects or enabling attributes to them you might recognize. Embracing all of them is not the answer but taking a more detailed and thoughtful approach to those capabilities, competencies and capacities to build fluid into your organization becomes important.

Today we are all on the search for new adaptive infrastructures. We should be participating in platforms and building our ecosystems to extract outside knowledge to learn how to recombine it in new ways. Nothing today stands still; we are in that need to constantly redefine, to build in flexibility and this adaptive skill.

We should encourage thinking and challenging present orthodoxies and explore ways to rewire and rethink much of the prevailing system and processes as it has far too much built-in rigidity.

Today we are losing predictability on much that was a constant within the past, we have a speed of development that needs to constantly be reduced down, for gaining competitive advantage and getting our innovation to market earlier.

So can we identify competencies that would help embed a more fluid way of working?

We need to look for or deliberately design into our thinking the following:
We are all becoming far more digital, fluid and fast, we are absorbing and responding at faster rates and we are adapting to a constant, multifaceted world of connections, systems and knowledge piecing to combine up into different ‘wholes’.

• To get there we need to be far more nimble, we need to learn navigation skills far more, we are increasingly assignment driven, less exploratory in many things, and technology is taking on this role.

• We need to become increasing agile, iterative, be experimenting, and constantly determined to execute to drive our results and value-add.

• We need to seek empowerment, focus on delivery and collaboration outcomes far more resolutely.

• We need to grasp the make-up of value creation and why innovation is becoming new business models in its potential.

• We need to establish within ourselves and the working environment we operate within a sound conflict resolution pathway and strive for authenticity and trust within the places we operate.

• Lastly a real willingness to seek out diversity, to be visible, and be wanting to have this constant entry and exit to our projects and challenges, to drive our personal satisfaction and worth up.

In summary

We need to relentlessly challenge and push out our own boundaries and knowledge and adapt these to be designed to those we seek to exploit constantly. The mantra of “adapting, exploring and quickly responding” to the needs seen in rapidly changing markets and across our customer base of past, present and future needs this fluidity.

The need for being fluid across our organizations is to respond to those different demands being faced today, it requires a far more adaptive and responsive business to work in increasing parallel of balancing stability alongside pushing for dynamism .

This dual need of maintaining stability in the force of resisting shocks and keeping leveraging the existing optimization has to yet work alongside responding to changing markets, resolving increasing challenges.

The end result is in delivering more innovation that meets the changes occurring, these require both fluid and stable thinking and approaches.

Additional material to explore

For a more extended discussion on change, its impact, its force within the interplay of innovation, change and business models, there are two White Papers you can read written jointly by Jeffrey Phillips of Ovo Innovation and myself.

In a White Paper “Critical Interplay Innovation Business Models Change 6-2” we provide a foundation document that highlights the important interplay between innovation, business models and change.

A further white paper “Why innovators need a new change paradigm” takes this even further by looking more specifically at emerging models and the competencies required to react to this change in these more ‘fluid’ ways

Here the paper is laying out more of the discussion for building the case of fluidity as discussed here..

The post Fluidity – the growing need of organizations today. first appeared on Building Your Innovation & Ecosystem Intelligence.

These new innovations frequently change or modify operating models and business models, often not by deliberate design.

We’d stipulate that most innovation should be focused on updating and changing business models constantly and with increasing focus. With this focus new products and services become by-products or outcomes that support or sustain new business models for driving greater lasting sustaining competitive advantage.

In short, most innovation should be focused on creating new business models, with new products or services serving as enablers to intentional business model innovation, rather than the other way round. This is what we mean by flipping perspectives.

Critically we have to become far more comfortable with constant, ongoing change and align this into new innovations and business models. This move to positive change is discussed here, recommending a movement that allows the changes we need within our organizations to become more fluid in their adaption, for leveraging and exploiting innovation in new, far more compelling ways.
This is the fourth in a series discussing the interplay around innovation, so to recap

In a recent series, introduced initially on www.innovationexcellence.com with this one being the fourth post, originally published on June 25, 2015, we discussed the importance of the emerging interplays and how all innovation has the potential to be a new business model and creates change.

This series is re-produced here as it is a important concept to consider all the aspects within any innovation interplay.

Both myself, Paul Hobcraft of Agility Innovation and Jeffrey Phillips of OVO Innovation, co-authors of this series, would argue that we are failing to manage the different and multiple interplays that are constantly taking place when innovation occurs. We are often ignoring them and failing to extract the best or optimal value out of the innovation we are introducing.

In a White Paper we have just written called “The Critical Interplay among Innovation, Business Models and Change (6-2)” we provide a foundation document that highlights the important interplay between innovation, business models and change.

A new white paper “Why innovators need a new change paradigm” takes this even further by looking more specifically at emerging models and the competencies required to react to this change in more ‘fluid’ ways. You can find the download links at the bottom of this post.

The Interplay is Demanding Change and New Models

If innovation continues at a high pace, and forces change across customers, the market and the innovator, as well as creating new business models, then we can easily accept that innovators must be good at planning for and executing change. Innovation and change are somewhat symbiotic: sustained innovation cannot occur without good change capability, and innovation creates demand for change.

When we add in the interplay across innovation, business models and change it’s evident that change is a constant, and will only increase. Yet there is a significant problem: existing change models that describe how we think about and implement change no longer seem valid, given the nature and the pace of change.

Innovators need a new change model

We, innovators, need a new model of change, for at least seven important reasons:

1. As innovators we aren’t simply responding to external change, we are creating change, both for customers and for our companies and markets. (inside, proactive change vs external, reactive).
2. External change is far more unpredictable, in global markets new threats emerge from anywhere, at any time and are often delivered in totally unpredicted business models.
3. The pace and nature of change aren’t slowing but is accelerating and will continue to accelerate. (increasing pace, frequency and amplitude of change).
4. As we’ve demonstrated, most innovation has the potential to be business model innovation, which will require change. (As more innovation becomes focused on business model innovation, this will create even more change).
5. We recognize that change is no longer an occasional threat but a constant companion (shift from the idea of change as a threat to change capacity as a competitive advantage).
6. The idea that companies can achieve a protected steady state where change won’t affect them doesn’t seem to apply anymore (long periods of stasis, or standing still are no longer possible. Must be able to change/evolve constantly).
7. We need to think of change as a capability that we constantly deploy, rather than a threat we typically avoid. (Need to develop change as a capability, to build skills, reduce barriers).

For these reasons the concept of unfreezing and refreezing does not seem appropriate anymore. As change becomes more constant, and as we ourselves create change through innovation and business model development we must be much more open to, and welcoming of, change.

Rather than viewing change as an occasional nuisance or hurdle, we must build capabilities that allow us to implement change constantly, building barriers for other companies that don’t embrace change or can’t change quickly and capably.

Factors that must change

Perhaps the biggest change to status-quo thinking about change is the concept of a protected steady state where the organization can “freeze” and resist or deflect change for a long period of time. The nature of competition is so fierce that we cannot wall off a market, a segment or a company and avoid change.

Rather we need to create capabilities, systems and knowledge that allows us to embrace change and use it to our advantage, whether we create the change through new innovation or the change is thrust upon us from external factors or competitors.

Another concept that must be rejected is the idea that change is difficult, distracting and problematic. In the older unfreeze-refreeze model the goal is to experience a significant amount of change in the shortest amount of time, moving as quickly to the new steady state as possible.

This signals a lack of engagement, resistance to change and avoidance. Why would we reinforce avoidance of change when the winners in the future markets will be the firms that can embrace and manage change, who are constantly creating change through new innovation?

We need to create the belief that change is a positive experience and change capacity creates a positive differentiator for those who invest in the skills and methods.

The old change model indicates signals that a company must endure a brief change activity to win a long period of quiet in the new operating state. This promise of eventual stability is misleading and based on historical data, not future trends and indicators.

The older model makes promises that competitive forces contradict. New realities suggest that we need to be constantly adapting to emerging opportunities and threats, and building change capabilities. Perhaps a new model for change is:

Unfreeze the Rigid – Build change capabilities/reduce cultural barriers – Create change/Promote Fluidity

In this suggested change model we recognize that rather than adapting to a new reality, we need to build and sustain change capabilities to be prepared for any eventuality. In the new “state” we don’t expect to sustain a new status quo but to create change and remain capable and be constantly fluid, embracing change and innovation consistently.

To succeed in future markets that will possess far more change, at a much higher rate than before, with far more innovation, we need a new model for change that shifts the concept of change from an occasional, painful interruption to a consistent, evolving capability.

First, we need to understand the existing barriers and challenges associated with change. Then we’ll need to build change capabilities, and finally create a new operational and cultural structure to sustain change.

Fluidity is becoming our growing need of understanding today

There is considerable discussion about changing structures and models to become more adaptive, agile and fluid. With such an increasing level of complexity and environmental turbulence that organizations are having to master, most of their existing systems, processes and approaches are facing increasing challenges.

The solutions of fluid, agile and adaptive are aiming to develop highly flexible and fluid organizations as an attractive answer to move towards.

There is so much change being undertaken, the growing call for quick improvisation and ad hoc responses all needs to take us away from those rigid processes into open and fluids ones.

To obtain BOTH White Papers you can DOWNLOAD by going to
https://ovoinnovation.wordpress.com/thought-leadership/ or
http://paul4innovating.com/insights-thinking/

The original post was published on www.innovationexcellence.com on June 25, 2015

The post A new innovation perspective – change to fluidity first appeared on Building Your Innovation & Ecosystem Intelligence.

As we consider the interplay between innovation, business models and change, it becomes clear that many companies have a definition of innovation that’s far too narrow.

Increasingly we need to rethink the scope, depth and breadth of innovation possibilities, as well as the secondary implications of innovation.

Ignoring this broader definition of innovation means we can never achieve all of the possible benefits innovation has in store.

We believe ignoring the breadth and depth of innovation can also allow competitors and new entrants to disrupt your position or industry.

Fortunately, some of these definitions have been created for us.

Our responsibility is to understand the definitions and their implications, not stay constrained but seek and explore the broader options this can provide.

The post Most Innovation is Becoming Business Model Innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

The post The Interplay in 3 Essential Change Points for Innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

Yet why is it we often ignore the power of change when we design innovation?

We often fail to fully appreciate the changes that are occurring from the innovation we produce, it often seems an afterthought, there is this lead and lag effect and needs, firstly recognition and then addressing in how we manage innovation going forward.

In a recent series introduced initially and given a feature of the week prime spot on www.innovationexcellence.com on June 7, 2015, we discussed the importance of the emerging interplays.

This series will be re-produced here as it is an important concept to consider all the aspects within any innovation interplay.

The emerging concept of “interplays”

Jeffrey Phillips of OVO Innovation and I, Paul Hobcraft, through my consultancy work at Agility Innovation Specialists, the co-authors of this series, would argue that we are failing to manage the different and multiple interplays that are constantly taking place when innovation occurs. We are often ignoring them and failing to extract the best or optimal value out of the innovation we are introducing.

In a White Paper we have just written called “the critical interplay among innovation, business models and change” we provide a foundation document that highlights the important interplay between innovation, business models and change.

In this whitepaper we discuss the dynamics and focuses of its impact on all three constituents involved when innovation occurs; that of the customer, the market or industry itself and on the innovator itself.

We used the “lens” of the three horizon model to demonstrate the interplay between innovation, business models and change.

The concept of the interplay – a brief introduction

In this post we introduce the concept of the interplay of innovation to provide a short understanding of this emerging thinking between us and hopefully this encourages you to read the different White Papers that are available on both our web sites (Agility and OVO) to download and read, with my link opening these up directly as pdf’s of one and two here.

We both feel outlining this has only started our thinking to begin our journey to find new ways to frame this ‘interplay’ so it becomes a management discipline, to think far more broadly about the innovation you are designing today.

A series of subsequent posts will delve deeper into specific interplays going on following this introduction which link further with the whitepaper (links for downloading are shown below).

There are interplays constantly at work around innovation that we are failing to fully recognize, manage and leverage.

The vital interplay between innovation, business models and systemic change isn’t fully appreciated; we are failing to appreciate the amount of change that is occurring by innovation and as such failing to leverage it to its most optimal.

We specifically chose the word ‘interplay’ as it means “reciprocal actions, reactions or interactions” and that is exactly what innovation imposes in potential change, to something new, and in altering the existing state, with new business model potential.

It is ‘exerting an influence’ and it is this potential for ‘reaction’ comes from thinking more about the recognition of the value within change and looking to design new business models. One affects the other or has the real potential too, if it becomes an integrated part of the innovation execution process

Any innovation creates change but we have constantly failed to recognize each of the constituent parts this can and does have an impact upon.

Understanding the interplay and why it matters

We tend to understand more and more about a capability as we work with it and learn its capabilities and power. Over time humans have mastered many technologies, from fire to the splitting of the atom.

We believe we are still in the first stages of fully understanding the scope of innovation. Until we recognize the interplay between innovation, business models and change, we cannot fully grasp the potential impact innovation has across horizons, to customers and markets, and most importantly, to the innovator themselves.

Corporate innovation has, to date, been relegated for the most part to incremental improvements, which have little impact on the market or the innovator.

We know this because of how much emphasis we place on the few stories of true disruption – the iPod for example, or how NetFlix destroyed Blockbuster. Increasingly, however, many people are realizing how much power and capability innovation has to offer, and how innovation can create exceptional change, for each of the three constituents noted above.

Further, as we expand the scope and breadth of innovation outcomes, we’ll quickly see that many innovations aren’t simply products, but also new channels, new services, new processes and new business models. As these new innovations emerge more consistently, they will create great change. This becomes part of our need for the interplay

We see different interplays

The first interplay is between innovation, business models and change

As innovation increases, we will see far more variation in the impact and outcomes, which will force business model changes. As industries and competitors adapt to the increasing pace of innovation, the pace and scope of change will increase as well, leading to more business model shifts and more potential innovation activity.

These three factors create a virtuous (to some) or vicious (to others) cycle, depending on the organization’s ability to sustain innovation, change and evolve business models.

The second interplay is between the three primary constituents involved

Innovation has an impact on at least three constituents: customers, the markets and the industries themselves but also internally on the innovator themselves.

1) The customer as the first constituent
These are at the customer, where the ‘job’ your product or new service is seeking to resolve often requires very different actions, behaviours or beliefs, firstly to adopt the innovation but then to ‘extract’ the advantage gained in making the change.

We believe we fail to provide enough of the positives of this change, often they are discovered through trial and error or through a newly forming community that shares their knowledge. Customers experience change from any innovation they adopt.

2) The Market and your competitors as another constituent
Each industry has established ‘norms’ that are increasingly under attack from new business models, and new competitive threats that are not bound by these norms.

We are seeing many conventions previously established being challenged not just by innovation itself but by the clear use of the business model to explore all the options available. New innovations often create change for competitors or the industry at large.

3) Then we have the innovator themselves
What is so staggering to us is how many innovators are refusing to recognize that innovations always create change that has a significant effect on the innovator themselves. We must ask – why is that the case? Often by not understanding the scope of change, they are attempting to create they totally miss the business opportunities that could come with it.

Change is still seen internally as something to be avoided, often at all costs, but we would argue most strongly to embrace change before a lack of change destroys you. Innovators are not immune from the change they create.

The third interplay is the three horizons to manage innovation and change

To explain the impacts of innovation and the change it creates, we’ll use an accepted framework (the Three Horizons) to consider the impact innovation has on change capabilities and business models.

What’s important to understand is that every innovation creates change, and the amount and impact of change scales out across each of these three horizons into different business model opportunities

Change today is, without doubt, a constant

We need to create a new interplay design. Before we can embrace constant change we need to see the effect of change certainly in more positive ways.

There is really no “steady state” anymore, change through innovation will become the predominant state. Change and innovation become constants, as business models continually evolve. It is reducing the fear and uncertainty of change by taking a totally different view of the value of innovation that we can alter today’s change perspective.

Organizations need to become more excited about pursuing new business opportunities, looking for new business models to change the existing dynamics.

It is totally energizing to try out new things, design a more holistic innovation experience that accounts for the customer and the market and constantly experiment with all that does ‘interplay’ around innovation.

Managing the interplay of innovation, business models and change

You do need to pass through different phases of understanding, of awareness and recognize the increasing interplay undertaken by combining innovation, business models and change across all three constituents of the customer, the market and yourself as the innovator, through a lens that sees emerging opportunity across different horizons.

In our white paper “the critical interplay among innovation, business models and change” we provide a foundation document that highlights the important parts of a new interplay that needs recognition, framing even more and a fresh approach to building the competencies, capabilities and capacities to manage the interplay of future innovation opportunity.

A place where you are seeking the power and impact of innovation lies in the interplay between change and new business designs.

To obtain the White Paper you can DOWNLOAD by going to

https://ovoinnovation.wordpress.com/thought-leadership/ or

Insights & Thinking

The original post was published on www.innovationexcellence.com on June 7, 2015

The post The Interplay Surrounding Innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

It is either in the external market place in new products, services and even new business models, yet we often ignore the amount of change we should be considering within our own organization.

As we ‘learn’ to innovate we ourselves change but often we are poor at recognizing these changes and the greater impact this might have on on all that is around us.

We miss opportunities to alter our processes, systems, structures or methods. We often fail to ‘advance’ in all the positive change innovation can bring.

We tend to ignore the change part of innovation
I believe we need to rethink this and evaluate the significant changes that should be taking place within our internal organizations as we expand our innovation activities.

As I have mentioned in a previous post I have been thinking about the managing of change significantly in recent weeks. It continues well into the next few weeks as Jeffrey Phillips of OVO Innovation and I have co-authored a White Paper called “the critical interplay among innovation, business models and change” as it rolls out.

Take a read by downloading this whitepaper on this site within my newly created “Insights and Thinking” tab. 

A classic change model needs an update

We need to ‘unfreeze’ through recognition of our present rigidity  > We should make a ‘transition’ through experiment and exploration > Finally we should not ‘refreeze’ as the recognition of past views has offered, we need to build the adaptive, agile and fluid abilities required for today from learning, collaborating and embracing change.

We need a ‘C’ change to always sit side-by.side with innovation.
Innovation is always like a change project, it needs to be mapped, it needs thinking through in its impact so as too relate and identify with all that does occur within any innovation adoption.

For the moment lets take a “lighter” look at the importance of  the ‘C’ of needed changes throughout innovation’s need.

So thinking “C” is central to innovation

This is made up of the search to build a common language, to put innovation in its appropriate strategic and operational context, to work on communicating and cascading this throughout the organization, so as to build the culture, climate and conditions innovation needs to work on challenging and sometimes complex issues.

We consistently need to provide the clarity that all need to contribute so this ‘broader universe’ can spark the distinctive aspects of cultivating curiosity and creativity that has the greater potential of being converted into the innovation that delivers on its capital in the potential promise to captivate our customers.

The ultimate aim is building identification and understanding so as to build up the capabilities, capacities and competencies required to deliver on the integrated approach taken.

This is led from the top through a well-designed approach and then fully conveyed down on the needs throughout the organization for all involved to align and bring innovation to life, to spark curiosity, cooperation and collaborative exchanges, to combine ideas, to be capable to build on these and take them forward in coherent, thoughtful ways, offering calculated returns.

What we design needs to seeks out to capture and encourage engagement, we need to crystallize new concepts, construct and commercialize solutions and be the providing catalyst for sustaining change and growing confidence, connecting our people, converting and clarifying, convincing all our respected communities of innovations value, of its growing critical importance and vital contribution to influence and determine future growth as well as creating the conditions for sustaining and improving the organizational longer-term prospects of lasting competitive advantage.

So have you had your daily dose of the critical vitamin C compound that comprises much of what we need for our innovation good heath?

Just a light hearted Friday afternoon comment. Ciao from Southern Switzerland.

The post The "C" change within innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

The opening post is entitled “the interplay surrounding innovation”. Please take a read

Our opening argument revolves around the recognition of change as part of an interplay

We argue that we are failing to manage the different and multiple interplays that are constantly taking place when innovation occurs. We are often ignoring them and failing to extract the best or optimal value out of the innovation we are introducing. The change effect is often being ignored.

You can download this whitepaper on this site within my newly created “Insights and Thinking” tab on this site.

In this paper we discuss the dynamics and focuses of its impact on all three constituents involved when innovation occurs; of the customer, the market or industry itself and the innovator itself. We used the “lens” of the three horizon model to demonstrate and frame the interplay between innovation, business models and change.

We are providing a series of posts on this through Innovation Excellence in the coming weeks which build from and on this White Paper. We both feel this has far more to explore in practices, frameworks and thinking and we hope you share this view, as it builds.

We initially chose change over transformation.

Clearly the emphasis is to encourage transformation to meet the unrelenting disruptions going on all around us makes sense. I certainly believe we have to become far more comfortable with change, before we attempt anything transformational and that in itself is not easy at all.

We seem hard-wired to resist change until we are forced to accept it and that is a real pity and loss within ourselves. We need to see a change in different ways, through the lens of discovery and learning, and then we transform.

Change always feels painful.

Change is notoriously hard to achieve both within ourselves and especially in organizations. The reality is we want to resist change, it makes us feel uncomfortable, often raising the fear of the unknown. We form habits that we find hard to shake free of.

Often we invested a fair amount of time in learning, it then becomes even tougher to start unlearning but that is what we must do, unlearn, to then open up our minds to relearn. We worry about are we losing something of value, is the change going to feel better or just increases our insecurity even further.

The level of failed change or transformations undertaken has been put at somewhere between 70 to 80% in falling short on the initial targets or aspirations that drove change. The value generated from change often falls below the expectancies visualized when the organization embarked on the change program. So why do we put ourselves through this level of pain, disruption, uncertainty and potential risk of failure?

We do get caught up in interchanging change and transformation and believe it is the same.

It is not! In my research on change, I altered my own understanding with a range of thinking I explored.

Change tends to focus on making the existing system better.
You use this as your framing point and the level of efficiencies and improving effectiveness is judged as the success or not of the end result.

You actually are ending up with a reconditioned model of your past as you have mainly dealt within the boundaries and constraints to make this (often) well-defined shift in the way things have worked.

Transformation is a different matter. You are attempting something far more radical and disruptive.

It is aiming to reinvent the organization, and significantly challenge and change the practices that are in place. It places far more at a higher risk as it is more unpredictable, iterative and often a series of experiments to learn and adapt. It often feels you are entering the unknown as it can become a real process of discovery, experimentation and adjusting execution.

Transformation is far more dynamic and far-reaching. It is often looking to design for the future as you release the shackles of the past, bound up in existing processes, behaviours and thinking. You are looking to invest far more as you learn, clearly more radical new business models would have this ‘transformational’ effect.

Both change and transformation need to deeply understand the “as is” and those committing to make a change or transformation need to share the goals and understand the reasons for undergoing such a conversion from the existing state to a different one. There are considerable risks associated with both.

What might help flip the odds?

I would argue that most change or transformation initiatives attempted are far to piecemeal, they address only certain known parts and fail to address the ‘whole’ that is actually affected by the change.

Any change program needs a far more holistic approach than often we give this, we get caught up in the project management, we focus too much on one side of the change equation and either get caught up in the people side or favour the structural side of processes and functional design.

Undergoing any change required dramatically rethinking the reasons for this, the effects this will seem to have on the operating and business model. Will the effort yield a more positive result?

We are facing unprecedented disruption

Externally we are seeing increased volatility, complexity in regulations, the impact of geopolitics, constant pressures in public spending and shifts in demand, the digital disruptions and social media influences forcing a greater need to dialogue with stakeholders, customers and new entities and finally, our employee base is questioning and demanding in unprecedented ways.

All of these are having a significant impact on our organizations and they have not responded and are often stuck in those past times where these forces of real change were simply not built into the system.

Equally most organizations are losing any significant competitive advantage as the competition has intensified, the design and adaptability of others to challenge the existing incumbent is being made easier through the internet, reducing global barriers and high level of mobility, operating often at much lower operating costs, free from legacy.

The final imperative for change comes from our present poor levels of growth and innovation.

Innovation requires managing differently, to function and yield those higher results we would like and this becomes part of the dilemma within organizations. Yet innovation is also badly constrained because change is not considered as having this symbiotic relationship with innovation.

Innovation being designed and produced are mostly new to the world (or should be) and these confront customers, markets and the innovator themselves in making change.

The higher the scope of impact of innovation the more we do need to address change yet we can’t often grasp the nature and amount of change that the innovation unleashes. We should think about innovation and change together.

This is where Jeffrey and I are focusing our thinking at present

Change is all around us as a constant-  we need to simply get used to it
We can’t escape change; we can’t transform ourselves without a clear holistic model of its impact across the whole organization.

Change and transformation require us to be dynamic, constantly exploring, adapting and learning, it cannot be refrozen as was the thinking of the past. Nothing is stable; we need to build it as fluid, agile and constantly adapting through our learning.

We need to generate a far more highly dynamic environment, one where we are constantly being challenged and seeking out answers through discovery, experimentation and constant execution.

We need to become excited about change, each of us becoming innovation change leaders.

Change today is about building a change capacity that is constantly evolving.

We need to see change as pursuing new opportunities, exploring different horizons and thinking. We need to become far more energized in trying out new things, in experimenting or prototyping, to learn and advance.

We must retool ourselves as change not only leads to transformation but it will allow us to explore all the interplays we can find within and around innovation and those can lead to great things.

To obtain the White Paper you can go to my insights-thinking page, where you can download or view the paper “the critical interplay among innovation, business models and change”

The post The ongoing challenge is making change our constant first appeared on Building Your Innovation & Ecosystem Intelligence.

Can these be valuable and be associated to the portfolio situation within an organization’s need, in seeking different viewpoints of product or service change?

Opening up our thinking to change can drive our business offerings very differently.

Often within these drivers, we do need to explore what is the underlying force behind them, it allows us to pause and think. As you think through what these different change drivers on what it might mean to extend your new product or service developments, these can prompt radically different and imaginative solutions to consider..

Using the different drivers can give you new insights into your innovation activities plus also can prompt significant changes to freshen up your innovation portfolio.

They are certainly a good place to start to get the creative juices flowing even more.

It is worth constantly working around different drivers of innovation change.

Periodically I would suggest you work through each of these and see if this changes your thinking or approach and you can then see a different angle or opportunity that might emerge that changes the thinking.

So let me share my opening nine identified drivers for innovation change:• Emotional Drivers – as we learn, dream, create and get into a ‘free’ spirit, it often opens up our thinking. I sometimes associate heroes and champions or relate to recognized mentors and facilitators and look for what makes the emotional connection, then I ask: “can I use this or be inspired by them” to drive something within my innovation activities or not? What triggers different sentiments, warmth, excitement or feeling?

• Social Drivers – The more we seek interactions, they become (or should become) meaningful and enduring. These connections allow us to think and relate, deepen the association.

As we also seek out others’ accomplishments, can this trigger ideas, principles or actions that we can apply in what we are doing. What can we offer that meets different desires, and aspirations, prompts dialogues and might reflect for instance, a more caring and sharing viewpoint. Drivers that make us more socially relevant and connected.

• Technology Drivers – These tend to be better leveraged and understood, in collaborative methods and techniques, ones where we can demonstrate, and connect the physical and virtual world, that moves us to better, clearer, even faster transactions. Technology is a really powerful enabler of innovation if you tune into the four fast-moving disruptive forces of social, mobile, cloud and analytics that are all driven by an explosion of data and fuelling a new era of innovation for many.

Imagine if you can harness technologies application and ‘raw’ power, there becomes a higher chance of finding the needle of useful innovation insights that lie within in the binary haystack. As you learn to analyse and sort these technology drivers, can give you new insights into different trends, patterns and needs, that might even radically alter the meaning within your business and how and what you offer, with even new business models emerging from the evaluations.

• Environment Drivers – these become critical. The more we encourage the right environment the more we create a culture that others can relate to. A climate that encourages, and underlines the determination of bringing in diversity, collaborative and distinctly different behavioural patterns that encourage even more to join in, relate and participate in generating ideas and solutions. By providing a welcoming environment you can drive growing awareness, trust and shared understanding that builds a very powerful set of innovation drivers if the Environment thinking is right and tuned in to the world of what needs to be reflected within your products and services..

• Measurement Drivers – We are all familiar with the classic input, process, outputs and outcomes we strive to find measures for, good or bad. I tend to look for measurement in the knowledge that is being driven through an organization in its absorptive capacities of accessing, anchoring and eventual diffusion. If we measure actual utilization or assimilation then can we explore these in deeper ways to draw out the aspects that make up both tacit and explicit outcomes.

We also need to keep focused on time-related activities, speed of innovation to market as well as project deliverables and make different connections on what this might possibly mean. Measures can drive change if they are well thought through and connected, both to the business need and more importantly, to the individual’s own understanding of its relevancy. Make your measurements more dynamic, less static by ‘seeing them differently’

• Marketplace Drivers – Today it is all about speed and pace, accessing the changing conditions and pressures coming from the marketplace. The a constant need in understanding the rate of change dynamics to work out your fit in new innovation offerings.

We need to become far more tuned into pattern recognition, contexts of the forces at work. We need to appreciate the rivalry and competitive hunger. Above all it is figuring out the customer’s unmet needs and non-stated ones, so all these market force complexities can be worked through in your mind and ongoing evaluations.

Tuning in to the market forces gives an abundance of new thinking to work into your products and services.

• Design Drivers – approaching issues and challenges with more of a design thinking hat can help identify a number of hidden drivers. The more we experience and experiment, the more we tune into the power of stories, narratives and experiences. This heightens our awareness the more we practice looking ahead.

Equally looking back it can reveal much more in our designs and what made up our thinking (at that time). Fashions and traditions, how we work today, how we worked in the past – and how different in the future – will influence much in our innovative thinking. We need to open up to experiences far more.

We need to look for improving flows and reducing barriers, making different combinations of potential richness and innovation promise, we need to focus on function and form far more, that more human-centred need and always look for improving the degrees of freedom and ease of purchase. For example, working towards the ‘one-click away’ concept for our customers in making their transactions easier.

• Rational Drivers – Organizations survive by their rational drivers, be this strategic architecture, management systems and innovation processes. Those processes and procedures are where you are always looking to achieve and drive execution and results through improving productivity and creativity as well as working constantly at clarifying the interventions, controls and monitoring.

The rational drivers, if well set up, can make such a difference to being ‘in control of all the innovation activities or not and should constantly be challenged for redundancy or improving upon. Innovation Governance is a classic place for constantly working through the rational drivers and keeping faith in the decisions made and guidance given.

Having a rational opinion within your team has great value in keeping random thoughts more ‘grounded’ to the task at hand.

• Intelligence Drivers – The whole focus is on knowledge generation and recognition, in awareness, competencies needed and seeking diversity of interpretation.

The underlying collection of intellectual capital, our intangible source, needs to keep feeding in the knowledge stock to allow ideas, concepts and outcomes to flow. Ones that drive to transform intelligence into tangible outcomes are so important to yield fresh value and lead to improved commercial outcomes.

Sadly it is often under-appreciated and not allowed ‘it’s’ right amount of digesting time to allow all the connections to be made to piece together something completely different and potentially valuable in new innovations. Listening to different people’s views values intelligence.

Looking around these drivers of change can yield very different thinking, prompt different actions and produce different innovation results. Get your team to discuss each of these change drivers to unearth new innovation possibilities.

Why not go and give these a ‘team test drive’ in exploring, focusing on each of these individually. Ask what can they do to alter your current thinking on your approach to your products and services.

By getting into this regular habit of working around these different drivers of change will keep your innovation engine in much better shape, more in-tune to accelerate away with better innovation outcomes. These can be designed to stimulate and really trigger the imaginations, often with the result of you making some unexpected connections.

Finding new spaces that differentiate your product or service offerings as radically differently perhaps, that improve on the ones that are presently within your existing portfolio and development process. The end result is a significant improvement in both the quality as most important and also the number of your options, so new concepts can emerge from this exploration of the different drivers of change.

Perhaps you just even simply ‘drive away’ leaving everyone else just watching you pull away in new competitive ways, with you knowing where and why you are making real change within your innovation activities and what prompted this. Recognizing the need for different innovation evolution is a big part of the ongoing battle we are all needing to discover..

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Publishing note:  This blog post was originally written on behalf of Hype and has been significantly revised. With their permission, I have republished this original concept by deepening the thinking on this within this post here.

I recommend you should visit the Hype blog site where they have a range of contributors writing about a wide-ranging mix of ideas and thoughts around innovation, its well worth the visit.

The post Exploring the Drivers of Innovation Change first appeared on Building Your Innovation & Ecosystem Intelligence.

Skies darken, clouds gather, often thunder and lightning combine, the wind picks up and the rain ‘announces’ its arrival in sheer torrents of heavy, drenching, wave-upon-wave of unrelenting force.

It is hard to stand upright or know what to do. Everything around you transforms. Dry, often parched land quickly turns to rivers of water, seeking out everything to shift and move along and eventually going everywhere to transform the landscape.

We are presently being told we are at the beginnings of a digital revolution; it has been likened to a tsunami in its eventual (devastating) effect on our organizations and by inference, the impact it will have on each of our lives.

I certainly agree, through technology our innovation activities will be potentially transformed, but as we often see technology is running ahead of our organizing to receive it, understand what it can provide, both in its real value to translate these ‘insights’ into powerful new business models, products and services.

Of course, the ‘hype’ is running ahead, just like the initial water flooding in, it is often just passing over the land and not being fully absorbed. Absorption takes time, it begins to sink in and its effect begins to ‘reveal’ themselves at different ‘rates of exchange’ for each of us.

Struggling with the effects of the digital economy

Digital matters, in its raw power and potential impact, I think it will be transformational.

The real opening questions all centre around our mindset, preparation and willingness to make the changes. Or will we be sucked up in the void, choked by data?

If it is likened to a “digital tsunami” then ‘all within its path’ can be potentially swept away or altered forever.

The human organizing aspects need to catch up. Will they build defences to warn of future ‘waves’ or take the opportunity to tear down much that has been left standing and rebuild, to take advantage and equip themselves in new ways?

The unique combination of the cloud, big data, social streaming, the internet of things, mobility, and the industrial internet, are all making this the time for new growth opportunities through this digital economy and the radical overhaul of the activities to realize the benefits.

Believe me, this is not going to be easy or a quick and painless change, it is going to radically alter much within our entities to receive, translate and transform this digital knowledge into impactful outcomes.

Three prospects that will come from transforming for digital.

1. The new prospects in Customer Experience
The immediate areas of new growth prospects and different engagement lie in changing the ‘Customer Experience’. Growing digital knowledge will enable greater customer understanding. We can begin to build new analytics-based market and customer segmentation; we can become more involved and informed about socially- influencing knowledge.

These can lead to new top-line growth, more targeted marketing and the potential for streamlining or altering the customer engagement process. We can expand the ‘touch-points’ in new services, cross-channel experiences and coherence and in providing greater self-service and ’empowerment’ for our customers.

2. The transformation of Operational Processes
The second one is Operational Processes. Digitization will radically alter the design of the processes and especially the flow of data, to information, to knowledge, to move informed opportunity. Will it improve processes or collide with already outdated systems, tightly integrated and create a build-up and eventual crash?

Unbundling the integrated systems and replacing these with more of distributed application environments is going to be a major challenge. Completely new features, new approaches and ways to draw down the ‘appropriate’ application needed, will require the use of the cloud, of modular systems, plenty of apps but still locked away in a secure environment of approved applications to be used.

Just stop and think about Apple’s app store, then apply this impact on our lives to business, drawing down from the same conceptual (business model) approach. There are going to be massively changed winners and losers for the race to unbundle, to one that will offer a more distributed environment where the user decided on what they need to use, to get the job done.

This will give a significant workforce enablement that wants to work anywhere and at different more flexible times, expecting high levels of response in what they use, to do the job on hand and enable them to build and communicate into ever-changing and evolving knowledge-sharing communities.

Knowing what, where and how, will be distributed down to the individual. These changes will be far more data-driven in insights and decision-making techniques, many unknown but necessary to allow performance to be timely, relevant and transparent.

3. The third area is the era of the new Business Model.
We have been ‘grappling’ with the concept of business model designing for some time. To a large degree, the economic situations in Europe and America have held this back to be fully embraced in large organizations.

They focused on ‘risk containment’, extracting the final juices out of effectiveness and efficiencies but that ‘well’ of opportunity is finally running dry and extracted.

Business needs to grow, it needs to stop hankering down, it needs to come out and explore the rapidly changing landscape in new and different ways.

Facing a digitally modified business landscape will need very different business models. The shift of resources, the transitioning and blending of the physical with the digital, the way digital will shape the structures, provide the ‘driving forces and insights,’ all will demand changing the business model.

We will see multiple business models that combine and blend product and service in very different ways, more tailored to new customer understanding and their demand and need.

What digital products will move alongside physical products and different services and how will that set of radical organization redesigns alter existing organization boundaries or established turf?

Agility and adaptability will be essential

The enterprise integration will need to be constantly evolving, adapting and becoming highly agile, it will totally redistributed, decision authority will move more rapidly towards evolving business models and distributive decision-making, to seize breaking opportunities quickly.

Those that quickly go through piloting, pivoting through digital and physical learning into scalable models to capitalize on rapidly shifting trends, disrupting the existing.

Business models will not stand alone, they will interlock in intelligent ways, to benefit from scale that essential need of a greater appreciation of sharing services,  that will open up different partnerships, opportunities for shared cost of new channel developments, separate value propositions are driven through common back-office services and increasing platform management, to manage this

The key to unlocking this new promise of growth is digital capabilities.
This is the ‘rub’. The human mediation of ‘going for it’ or ‘giving it lip service’ will determine a new class of winners and losers. Those that get it, embrace all of what it means and then choose to make radical changes and those at the other end of the spectrum, trying to keep it at bay, perhaps in denial.

Those who will be playing with selected parts and not recognizing the eventual strategic decay that slowly trickles in, to undermine performance and shift customer perception away, into that different landscape of ‘digital engagement.’

We need to unlock our minds. The analytical capabilities are going to be the human roadblock. Algorithms are promising to partially unlock this and help us absorb this ‘torrent’ of data to make them ‘meaningful’ and ‘insightful’.

Then we have the difficult choice of solution delivery, of the new integration of IT and the business of where authority will lie as well as that real need of ‘simply’ letting go, does need to be worked through will lead to some uncomfortable times.

The whole attempt to unify data, and processes, reconcile both business and customer needs and deliver the process capabilities to enable the translation of data into insights, into business outcomes that have real growth potential will be a wicked challenge.

The immediate ‘getting organized’ challenge

The engagement within this needs real top management attention. Digital has the potential to destroy or change your organization. The existing landscape of business will change forever as this digital deluge or tsunami will alter our structures significantly.

Industry and Social competitive landscapes will be redefined, in many ways unknown today but all around us, we have those ‘weak signals’ that require us to manage this transformation along with the three horizon methodology I often espouse.

There are four opening steps within the digital challenge. We each within our organizations need to: 1) frame the digital challenge, 2) mobilize the organization, 3) focus on investments and 4) sustain the digital transformation in multiple ways.

None is easy; all are hard as much is still  in the unknown and this is a real-time of leadership to be stepping up to the plate and showing its potential for making the winning hits or striking out.

There are so many roadblocks

Today organizations lack critical technology, tools and required skills, many existing systems still lack any form of real integration to allow data to flow across the organization, the business practices will mostly have to be rapidly relearned, senior leadership has the real, urgent need to get on the ‘same page’ and finally, this (radical) change will require reliance on managers that might lack the transforming skills, schooled in ‘containing and risk reduction’ and lacking real risk assessment and decision-making capabilities.

The pursuit of this digitization will ‘suck up’ an awful lot of funding, much of it constantly being thrown away as organizations transition from the existing to the preferred for it to be accelerated in being written off as part of the transition, alongside all those legacy systems sitting on today’s balance sheets. Are the ‘healthy’ financials for this in place in many of our organizations?

Organizations will scrabble to employ integration specialists, digital business architects, risk professionals and those critical analytical scientists. By 2018 Gartner predicts “digital business will require 50% less business process workers and 500% more digital business jobs. Attracting the right talent is the key to digital leadership”.

Finally, this is not going to be easy in presenting a business case that has a ‘hard’ return on investments; it will be made up of what is known and can be quantified with a real leap of faith, a steady hand and real belief that transformation does actually mean that,  a total transformation. I’m not sure there are going to be many ‘halfway houses’ on this digital journey. It is promising to be a real evolution.

Some compelling numbers that “speak of a massive change

Let me raise a few arguments of this change hurtling towards us. Gartner offers some compelling numbers, “consider this, since 2013, 650 million new physical objects have come online; 3D printers became a billion-dollar market; 10% of automobiles became connected, the number of Chief Data Officers and Chief Digital Officer positions have doubled”.

Yet fasten your seat belts, in 2015 alone, Gartner predicts these things will double again! Digital seems to have a certain compelling power to climb on board, fast.

Gartner also reckons the meshing of digital and physical and the rise of the Internet of Things, enterprises in 2014 will spend $40 billion designing, implementing and operating IoT.

The whole of IT is projected to pass $3.9 trillion in 2015 and all the spending will be driven by the digital economy needs.

Just a few more predicted facts

So are you beginning to build that compelling case for change? By 2015, more than half of traditional consumer products will have native digital extensions and by 2017, 50% of consumer product investments will be directed to customer experience innovations, as the key to lasting brand loyalty.

The dark side of Gartner’s predictions lie in this “by year-end 2016, 50% of digital transformation activities will be unmanageable due to a lack of portfolio management skills, with high levels of operational risk and the whole discipline of risk management will simply not be able to keep up.

Then Accenture believes big data analytics, seen as essential for competitive growth that are needed for the Industrial Internet are projecting this will be worth $500 billion in worldwide spending by 2020, taking into account hardware, software and service sales.

Already certain early leaders in this industrial internet race are placing 20% of their overall technology budgets into Big Data analytics. Just take a few minutes to look at the really big bet that GE are making on the industrial internet and the power of big data, investing already a billion dollars and still significantly investing. They plan to lead.

Going for the big prize being dangled in front of us.

The big prize that digitization offers is gaining market share on those that do not quickly follow, many unable to ever catch up or recover if they leave it too late and then one of the consequences is that the talent will move to those that ‘get it’ leaving those competitors that don’t even more vulnerable.

Over time investors begin to alter their investment portfolio, attempting to predict the winners and putting space between them and who they see as eventual losers.

I think the digital monsoon has arrived; you can watch in fascination, pick up and run for your lives, as the torrent of data rains down on you or attempt to prepare for all the uncertainty it brings.

It will alter much in tough choices and challenges and a landscape that will be very different when this ‘torrent’ of change subsides.

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Acknowledgement: I want to thank the MIT Center for Digital Business and Capgemini Consulting, Gartner, Accenture, GE and numerous others that are exploring and explaining the impact of the digital economy, so as to help me in my own recognition of such a ‘force of change’ coming towards us.

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