This is part 1 of a 3-part series on Digital Innovation Management. This blog series is intended to help a digital transformation team take a structured and measured approach to building enterprise scalable Digital Innovation Management capabilities.
Digital transformation is leveraging new technologies that redefine the ways people live and work. With economic benefits over the next decade estimated at $100 trillion, it is no surprise that half of all corporate boards have elevated digital to the CEO agenda.
An organization that has formulated its digital strategy needs to launch it by enabling key elements of the Digital Operating Model:
- Digital Innovation Management
- Digital Product Management
- Digital Workforce Enablement
In order to enable the elements of the operating model, the organization must clearly define each element, clarify the digital transformation approach, and own related business and technology capabilities. Out of the three key elements of the Digital Operating Model, we focus, first, on key aspects of Digital Innovation Management (DIM) that need to be defined to help clarify the digital transformation approach. By utilizing this model, digital transformation teams take a structured and measured approach to building enterprise-scalable digital innovation management capabilities.
The digital transformation team’s initial reaction to defining DIM might be to say that “Digital innovation is different than how we traditionally innovate, so we should build new definitions for how DIM is enabled”. However, most (if not all) companies have been innovating since their inception, so the digital transformation team must first conduct an internal scan of exiting innovation practices before creating new DIM definitions.
The challenge for the digital transformation team and for organizations seeking to digitally transform the enterprise, is that digital innovation enablers (cross-functional business engagement and ecosystem partners), in many instances, will be at odds with traditional innovation enablers (think tanks and laboratory environments). Thus, the key to successful DIM definition development is to understand and determine how digital innovation will coexist with the organization’s traditional innovation processes.
When determining how digital innovation will co-exist with traditional innovation, the digital transformation team needs to assess and understand the differences between traditional and digital innovation; identify existing innovation capabilities and communication channels that can be leveraged; and identify and mitigate DIM execution challenges.
Assess Differences Between Traditional and Digital Innovation
Before defining DIM, the digital transformation team needs to take stock in how innovation is currently executed within the organization. It also needs to compare the current innovation enablers against requirements for DIM enablement.
When conducting the assessment, the team should consider that traditional innovation focuses on incremental improvements to products that are typically owned or controlled by an organizational silo, whereas DIM focuses on facilitating the creation of new products, utilizing internal and external partner collaboration, and the latest digital tools.
After conducting the internal scan, the team should note the changes that might need to be made to DIM definitions. For example, DIM definitions should address the requirement for new ways of thinking in terms of working with cross-functional teams and executing rapid experimentation. They will also need to address the requirement for a shift in mindset toward extensive collaboration with external partners, for the development of platforms, services, and processes.
Leverage Existing Capabilities and Communication Channels
The DIM definition development process should focus on defining new ways of working and communication channels. The assessment may highlight existing innovation processes, tools and capabilities that can be leveraged to kickstart development of DIM definitions, enablers and communication channels.
For example, the digital transformation team will need a way to manage the ingestion and processing of innovation ideas. The internal scan may reveal that one or more innovation management systems are already in use. The team can accelerate its capability development by using an existing system. The same holds true for communication channels. If existing channels are in place they should be leveraged.
Identify and Mitigate Execution Roadblocks
As DIM is being defined, the digital transformation team will identify traditional innovation people, processes and tools that may need to be engaged upon DIM execution. The future engagement with traditional innovation may pose roadblocks to what the digital transformation team intends to accomplish.
For example, the digital transformation team may work out commercial arrangements with external partners that are not aligned to the existing procurement process. Given the misalignment, the arrangements may become stalled or nullified, which may adversely impact the relationship with external partners.
To successfully co-exist with traditional innovation, the digital transformation team needs to be aware of and prepare to mitigate roadblocks it might face, including innovation capabilities, focus areas, collaboration methods, and governance of partnerships.
Taking time to do an internal scan of existing innovation processes will help accelerate the launch of DIM. Identifying potential roadblocks early will help the team shape mitigation plans to smooth the launch of DIM. Lastly, by understanding the innovation landscape, the digital transformation team will be better equipped to build the right capabilities and shape the best fit digital innovation process that aligns organizational needs.
Stay tuned for part 2 of this blog series, where we will explore how a team can create a sustainable way of engaging with the enterprise by agreeing on focus areas for digital innovation and sources of ideas.