This is part 2 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.
In part 1 of this blog series, Co-existence Between Traditional and Digital Innovation, we noted that an organization that has formulated its digital strategy needs to launch it by enabling key elements of the Digital Operating Model (Digital Innovation Management (“DIM”), Digital Product Management, Digital Workforce Enablement). As we move forward in this blog series, we’ll focus on the “Digital Innovation Management” piece of the Digital Operating Model.
In the previous blog, we suggested that the digital transformation team needs to take time to do an internal scan of existing innovation processes, as this will help accelerate the launch of DIM. The team should also assess the differences between traditional and digital innovation to better understand how to define DIM. From the internal scan and differences assessment, the team will be able to identify potential roadblocks early, which will help it shape mitigation plans to smooth the launch of DIM.
In this blog, we will outline how the digital transformation team can create a sustainable way of engaging with the enterprise by agreeing on the digital innovation focus areas, the type of innovation desired, and idea sources. Doing so will help the team clarify and enable its digital transformation approach.
Engaging the Enterprise
As the digital transformation team launches the strategy, it will start to identify ideas from various sources. The team might naturally start to assess and progress the ideas. The biggest challenge will be deciding what to focus on. Teams have the tendency to start working on those ideas they believe will provide the next giant leap forward in the organization. However, the work done may neither meet organizational goals and objects, nor align with the digital strategy.
To ensure the digital transformation team is focused on the right things, it needs to engage enterprise stakeholders early and often to determine the type of innovation desired; agree on key focus areas; and outline where it will source ideas for the agreed focus areas.
Determine the Type of Innovation Desired
For the digital transformation team to successfully manage the innovation pipeline, it needs to be aware of the different types of innovation (Incremental, Breakthrough, Radical).
The team must be able to articulate the differences between each type of innovation to key stakeholders, so knowledgeable decisions can be made about where to focus efforts. Following the discussions, the team should have a good understanding of the type of innovation that is most desirable to the organization. The team can then identify the parts of the business that can provide opportunities for the desired innovation types. Subsequently, the team can work with key stakeholders to ensure that the innovation portfolio doesn’t fall too heavily into one category or another.
Ultimately, the team needs to engage the enterprise to ensure that the work done is balanced between finding the next giant leap forward vs. quick wins that provide immediate value.
Agree on Key Focus Areas
The digital transformation strategy should specify key focus areas for the digital transformation team (strategic imperatives, evolving capabilities, ‘North Stars’, ecosystem opportunities etc.). The importance of doing so cannot be understated, as the focus areas are critical to helping the team clarify and define the digital transformation approach.
Example: If it’s been agreed that the enterprise is looking for radical innovations from “North Stars”, then the digital transformation team would shape its approach toward building strong externally focused ecosystem partner engagements. This could be quite different than an approach required to support internally focused strategic imperatives.
If key focus areas are not well understood, the team needs to engage with enterprise stakeholders to determine and agree upon what the key focus areas should be. In this way, the team will know which approach to take to enable the digital transformation. Also, through stakeholder discussions, the team may uncover digital portfolio gaps that can be closed through specific digital innovation efforts.
Outline Idea Sources
Once the focus areas have been agreed upon, the objective for the digital transformation team is to develop several ideas to address each focus area. To obtain the ideas, the team may need to engage with internal and/or external resources. The team can determine where ideas should be sourced, based on both the type of innovation desired and the agreed focus areas.
Example: If the focus for the enterprise is driving topline growth, the digital transformation team may need to leverage crowd sourcing to create radical ideas around new technologies that help build new business models.
On the other hand, if the goal is to optimize operational processes, teams can source ideas from across the organization and conduct an external scan of technologies that can enable the delivery of the ideas.
In the end, the digital transformation team must decide on the most effective internal and external engagement strategy that supports the agreed upon innovation focus areas.
The digital transformation team’s ability to create a sustainable way of engaging the enterprise is facilitated by regularly working with stakeholders to build and execute robust and repeatable approaches to understand the desired innovation types; agree on focus areas; and identify the most appropriate idea sources. In doing so, the digital transformation team will be better equipped to define DIM, build the right capabilities, and shape the best fit digital innovation processes that are aligned to organizational needs.
In the final blog in this series, we will discuss key elements of the DIM process and explain how these key elements should be considered when determining the best fit process for validating, prioritizing, and testing innovation ideas.