This is part 3 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.
As the digital transformation team launches the strategy and creates a sustainable way of engaging with the enterprise, it also needs to build a fit for purpose Digital Innovation Management process. The process built should be formalized, repeatable, and visible; and it should allow the team to:
- Quickly locate the handful of ideas that meet business needs
- Shepherd the ideas through evaluation
- Successfully hand the most viable ideas to product implementation
- Set and manage stakeholder expectations.
To achieve the stated objectives, the digital transformation team needs to understand the major activities in the innovation process; know the importance of process formality, repeatability, and visibility to employees and managers; and work to mitigate some of the challenges it will face.
Major DIM Process Steps
The focus of innovation activities is to build a pipeline of ideas that are validated, prioritized, tested, and transferred to Product Management, when appropriate. The key steps in the process include:
- Idea Intake: The digital innovation cycle begins with the idea intake process. Ideas should come from both inside and outside the organization. Idea intake can be informal or a very focused step.
- Triage: Once the ideas are captured, they need to be quickly triaged. Ideas should be assessed for value and technical feasibility. Based on a company’s capabilities and capacity to execute ideas, they are accepted, rejected or put on a back burner.
- Ranking & Backlog Management: The next step is to rank the ideas, and scale them against items currently in the backlog. The ranking is done based on pre-defined criteria that each company needs to build based on their strategic goals. Ideas in the backlog are refreshed with new information and experience, through backlog management, to see if they can be progressed to products in the future.
- Explore & Transfer: The ideas are then tested in an agile manner, using proofs-of-concepts or rapid prototyping, for viability of becoming value adding products.
- Leverage New Capabilities: To round out the innovation cycle, lessons learned from previous innovation iterations are captured and leveraged in later innovation iterations.
Defining the criteria upon which decisions can be made is fundamental, as this criterion will be leveraged throughout the DIM process. Agreed criteria needs to align to business and digital objectives and should be used at each assessment stage to promote a deeper understanding of the idea before a decision is made to progress or put the idea on hold.
Lastly, organizations need to consider the interlinked nature between Digital Innovation and Product Management, and how both processes rely on each other to create a new paradigm in value creation.
Process Formality, Repeatability, and Visibility
DIM stakeholders can be many, but the two groups that need to have a clear understanding of how the DIM process works from day-to-day are employees and managers. Employees need to have clarity around idea review and turnaround times, as well as insight into the end-to-end process.
Managers, on the other hand, need to know how the process works to understand the speed of ideas through the pipeline. If ideas get blocked, managers can work to unblock the bottlenecks. Ultimately, a formal, repeatable and visible process will allow managers to help set the innovation culture.
DIM Process Challenges
One of the main challenges the digital transformation team will face is establishing and executing the DIM process with limited resources. There will also be pressure to deliver quick wins. The team will need to strike a balance between speed and thoroughness. The business can identify hundreds of ideas and use cases, easily burying the team under an avalanche of ideas. Evaluation criteria and framework are critical for success. The team needs to manage stakeholders’ expectations. Ramping up resources while building a new process we have unique challenges one needs to be mindful of.
The team will have to wrestle with the question of governance and control, as they will need to rapidly:
- Assess the DIM capabilities that exist in the organization
- Determine what level of control is required
- Identify which parts of the business can help take a lead in the process establishment and
Every organization will need to find its balance in creating governance and control around the process.
The team’s ability to find ideas that can be successfully executed will depend on its ability to:
- Understand, establish and execute the major activities in the innovation process
- Create a formal, repeatable and visible process that employees and managers actively engage in
- Mitigate any resource constraints it will face
In doing so, the digital transformation team will be better equipped to define process, build the right capabilities that are aligned to organizational needs.
To learn more, visit the previous blogs in this series on Digital Innovation Management.
- Part 1: Explore the need for the digital transformation team to assess the traditional innovation culture, identify barriers to digital innovation execution and determine how digital innovation will co-exist with traditional innovation.
- Part 2: Understand out how a 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.