Monday, September 27, 2021

What to innovate now

 For years, actually almost two decades now, I've been working with corporations, government agencies and non-profits to help them generate new ideas and create new products and services.  From new medical devices to new banking products, to new consumer appliances and more, I've worked on a number of innovation projects in a wide range of industries.

Over time, as innovation has matured somewhat, many innovation consultants began to reference Doblin's Ten Types model.  This is a great mode that I constantly refer back to with my clients, to convince them to think about innovation beyond product innovation.  Today, experience innovation, process innovation and service innovation is as important as a new product.

But all of this innovation activity seems somewhat quaint, like planning to take your Model T out on the highway, or bringing a pocket knife to a gun fight, in light of what's happening in the market.  Product innovation is of course necessary for survival.  You've got to create new products as older products age out, or as new competitors create compelling new offerings.  You've got to create new services and new experiences, because that's the way the market is trending.

But what may be most important right now, regardless of your innovation maturity, may be to innovate how you operate.  Getting fast, nimble and closer to customers will require that you take a long, hard look at your operations, structures and business models.  Innovating your organization may be the most important priority now.  Eventually, as well, you'll need to innovate how you innovate.

Everyone is talking about transformation

Every firm talks about transformation, and for good reason.  The pace of so many things has changed, and in almost every case change has accelerated.  Companies need to be faster, more nimble, more agile to compete in the existing marketplace, and everywhere you go, you hear the resounding phase "digital transformation".

Digital transformation is, of course, important, but in many ways the concept should be simply "transformation" - that is, how do we transform the company, how it operates, how it services customers, how it creates value - to meet modern and emerging changes?

If you need digital transformation to achieve this, then fine, it's digital transformation.  In my experience, most organizations don't really need the "digital" part at first.  What they need to do is to innovate how they work, how they structure and how they create value.  Then, and only then, should they worry about layering in the "digital" part.  Accelerating or digitizing a poor structure or unnecessary process makes the useless even faster.  

Innovating your organization

What would you change about your organization to make it more nimble, more agile, and bring it closer to customers?  Or, to put this in an innovation phrasing "How might we create a more nimble, agile organization that has greater customer intimacy?

This question indicates why transformation should be led and informed by innovation.  Too often, I fear, the goals of transformation become information technology goals and implementations, rather than solutions and outcomes that truly meet company and customer needs.  This is why "digital" transformation, while necessary, can I think lead companies astray.  Too often, digital transformation becomes framed by what you can digitize and implement in software.  And, as we've found over time, software eventually becomes a shackle, not always an accelerator.

Innovating the organization

What should be happening now, and continually, is an innovation effort focused on making the company more like what it aspires to be:  faster, if fast is the need, agile, if agile is the need, and so on.  There should be a continuous set of activities and innovation teams exploring what the company needs to change in order to succeed, and how to achieve it.  Then, and only then, should we talk about transformation, and determine which transformations need to be digital.

Of course, some digital transformation must occur, because all companies are creating and managing far more data than ever before, and there is value in that data that should be extracted.  In this case we might ask "How might we create insights and revenue streams from the data we are collecting" and the outcome might be a "digital" transformation, or we may simply find ways to generate revenue from the data we have.

What to innovate now, based on innovation maturity

So, in effect what I am saying is, you need to be doing several types of innovation (incremental and disruptive) for several types of outcomes (product, process and experience) in several different product groups or business units all simultaneously.  And, what you need to be doing beyond all those "table stakes" activities I just described is to constantly innovate your organization, hierarchy, operation and value proposition, which will lead to transformation, even digital transformation.

If your company is a "mature" innovator, then what you need to add is a focus inward, using innovation as a tool to sharpen your ability to operate. While continuing the other innovation you are already doing.  And, if your company is innovating now, you should plan to consider innovating how you innovate.

If your company is new to innovation, keep doing some incremental product innovation as a way to create new revenue streams, and begin to focus on using innovation to help improve your operations, which will in turn make you a better innovator.

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posted by Jeffrey Phillips at 10:32 AM


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