Tag Archives: Innovation

Driving Business Value from Digital Transformation

Webinar with Dr. Michael Wade, Professor of Innovation and Strategy and Cisco Chair in Digital Business Transformation, at IMD Business School, located in Lausanne, Switzerland and Director of the Global Center for Digital Business Transformation, an IMD and Cisco Initiative

Author of Digital Vortex: How Today’s Market Leaders Can Beat Disruptive Competitors at Their Own Game

This webinar was hosted by the Center for Services Leadership Community of Practice on Monetizing Data and Analytics

The Digital Landscape has changed over the past decade. While businesses and companies understand the power of digital innovation, many firms struggle with either taking advantage of the opportunities or reducing risks that accompany digital transformation. Automotive industry is a great example that demonstrates the impact of digital transformation. The push for development of autonomous cars affects a wide spectrum of industries: from transportation & logistics to insurance, law & order, healthcare, hotels etc. Similarly, other innovations such as block-chains, machine learning, virtual reality etc. will potentially have an impact on a number of industries.

While leading digital transformation, companies have to address two fundamental questions: “Why” and “How”. ‘Why’ pertains to understanding the opportunities and threats that exist because of a rapid digitization. “How” covers the capabilities and roadmaps traditional companies need to create to sustain competitive advantage. Yet, data suggests that most digital transformations fail – the reason lies in inability to push for organizational transformation alongside technology transformations.

Beyond technology, companies need to change their approach to business strategy. According to conventional thinking, strategies are developed with a clear understanding of where the company currently is and where it wants to be. However, in today’s world, predicting the future has become extremely complex. Instead, to compete in digitally disruptive environments, companies must build multiple strategies backed by core digital business agility. The following capabilities are key to building digital business agility:

  • Hyperawareness
  • Informed Decision-Making
  • Fast Execution

Hyperawareness is being fully alert to the internal & external environments, particularly to changes that spotlight opportunities or risks. Data & information collection are the core for this principle, which can be accessed by humans, IoT machines or sensors. Key metrics to measure hyperawareness include the company’s ability to capture insights about/from its employees, customers, partners internal operating environment, competitors and about new digital technology & business trends.

Informed decision-making pertains to collaborating & empowering people to make quick, evidence-based decisions. Decision making power needs to be pushed to the edge of the network (Intelligence at the Edge) to gain speed & accuracy. Informed decision making is measured by the business’s ability to make decisions quickly & based on analytics, to empower people, to share information across organization and to access & display important data in real-time.

Finally, fast execution is putting decision into practice rapidly, mobilizing resources dynamically and continuously monitoring options and progress against goals. Fast execution is measured by our ability to act quickly based on new information, turn decisions into actions, dynamically acquire & allocate people & resources, continuously learn & adapt.

IMD’s digitization piano is one of the tools to help companies navigate the “how” of digital transformation. This tool breaks down the organization’s value chain into 10 distinct keys, broadly categorized under Digital Strategy, Digital Engagement & Digital Enablers. Companies should play multiple keys simultaneously instead of trying to address one specific area in isolation as they navigate their digital transformation journey.

Finally, at the core of transformation, the critical questions that companies must ask are:

  • How to use digital technologies to improve performance?
  • How to use digital technologies to build a more agile strategy?
  • How do we digitize across organizations?

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ABOUT THE SPEAKER

BACKGmichael_wadeROUND: Michael Wade is a Professor of Innovation and Strategy at IMD and holds the Cisco Chair in Digital Business Transformation. He is the Director of the Global Center for Digital Business Transformation, an IMD and Cisco Initiative. His areas of expertise relate to strategy, innovation, and digital transformation. Previously, he was the Academic Director of the Kellogg-Schulich Executive MBA Program in Canada. Michael has been nominated for teaching awards in the MBA, International MBA, and Executive MBA programs. He obtained HonoursBA, MBA and PhD degrees from the Richard Ivey School of Business, University of Western Ontario, Canada.

CLIENTS & INDUSTRY EXPERIENCE: At IMD, Michael teaches in several open programs and has directed partnership programs related to strategy and digital business transformation with Vodafone, Ooredoo, AXA, Honda, Zurich Financial Services, Credit Suisse, KONE, and Richemont, among others. He co-Directs IMD’s Orchestrating Winning Performance and Leading Digital Business Transformation programs. He provides consulting services, executive education and expert evaluations to several public and private sector organizations. He has lived and worked in Britain, Canada, Japan, Norway, and Costa Rica.

RESEARCH AND THOUGHT LEADERSHIP: Michael has published works on a variety of topics, including digital business transformation, innovation, social media marketing, information systems strategy, eCommerce, and SME performance. He has more than 50 articles and presentations to his credit in leading academic journals such as Strategic Management Journal, MIS Quarterly and the Communications of the ACM. One of his articles was among the top 20 cited articles in business, management and accounting worldwide for five years, according to Scopus (the largest abstract and citation database of peer-reviewed literature). He’s published eight books, more than twenty case studies and appears frequently in the mainstream media. His Latest book is Digital Vortex: How Today’s Market Leaders Can Beat Disruptive Competitors At Their Own Game. He was named one of the top ten digital thought leaders in Switzerland by Bilanzmagazine in October, 2016.

APPROACH “I define digital business transformation as organizational change through the use of digital technologies to materially improve performance. It is a simple definition, yet difficult to master. Certain industries have been on the vanguard of this changes. Other lag behind. Eventually, digital will become the ‘new normal’. I enjoy working with organizations to help them come to terms about what digital transformation means for them, and then to take appropriate action.”

Innovation – What it is, and is NOT

By Don Smith

“You keep using that word, I do not think it means what you think it means.”

Inigo Montoya’s famous line from The Princess Bride instinctively pops into my head (sometimes muttered under my breath) when I read yet another article on the thin, worn topic of “innovation”. In its often misunderstood overuse, the word has become diluted (even polluted) to the point of becoming ineffectual in portraying any clear and distinct meaning; perhaps in similar fashion to the misuse of the word “quality” in the last 50 years. First of all, innovation is not coterminous with invention and should never be used interchangeably. Secondly, innovation is not rooted in technology. And lastly, the pursuit of innovation is not in and of itself innovation. This severe dilution of the term creates confusion and hinders us from actually achieving real and reliable innovation.

In the early 70’s Peter Drucker wrote, “Above all, innovation is not invention.” Apparently the terms were being confused back then as well. Drucker then gives us an important clue about what innovation really is in the very next sentence saying, “Innovation is a term of economics rather than technology.” It’s probably obvious, but what he means is that innovation occurs because of the economic choices made by a society when they adopt some form of invention. This definition is backed up in the book The Medici Effect, where Frans Johansson says, “Innovations must not only be valuable, they must also be put to use by others in society. …It has to be ‘sold’ to others in the world, whether those people are peers who review scientific evidence, customers who buy new products, or readers of articles or books.” This definition also comes from a body of research on creativity and innovation done by Teresa Amabile, the Edsel Bryant Ford Professor of Business Administration at Harvard Business School.

To illustrate the difference, let’s consider one of the most renowned and prolific inventors of all time. Thomas Edison had 1084 patents; only two others in history have received more. Yet only 31 of those patents resulted in products which were widely adopted commercially. In other words, only 31 of his inventions were truly innovative. I’m not saying the other 1053 inventions weren’t clever or cool in some way. It’s simply that the majority of them were never found to be useful enough by society to be innovative. Innovation is proven when social adoption occurs and the invention is significantly adopted or utilized.

Drucker made a secondary point that needs to be understood as well. He said, “Nontechnological innovations – social or economic innovations – are at least as important as the technological ones.” Technology is not the only platform of invention and innovation. There are as many non-technical inventions as there are technological, if not more. We are constantly coming up with new methods about how we can do things and ways of thinking or perceiving the world. For instance, it can be innovative to simply reconfigure the revenue model by offering free or “freescription” products or services, where basic services are free of charge to the bulk of customers and premium services paid for by a few, which actually funds the business model. Many innovative connector platforms such as Lyft, Uber, and Airbnb are disrupting legacy services. Recent examples of social innovation are the Open Source movement, social media, Open University, Fair Trade, Microfinance, and companies forming for the “social good” (i.e. B Corporations). I recently learned of a for-profit company based in the Seattle area that funds projects in third world countries with no intention of making any profit. This is intentional and allows them to circumvent the governmental oversight imposed on contemporary non-profits and NGOs; not to mention the costs of graft and corruption often associated with international aid. While this cannot yet be confirmed as an innovative approach, when other organizations move to adopt, it may become so.

Another source of innovation is repurposing old technology for value creation in a new context. One recent example of an old technology applied in a new way is the flywheel, which was originally used to help maintain the consistency of the rotational speed of a shaft. This technology was ingeniously repurposed to maintain the consistency of electrical flow in the generation of electricity using wind and solar power generators because those sources do not produce consistently (i.e. wind dies, sun fades). As an old mainframe guy, I’m very keen to point out the concept of centralized computing, which came and went in the 20th century, has now returned in what is commonly known as Cloud Computing. Old technologies and concepts may have many new and innovative applications, if we can distance ourselves from the bonds of conventional utilization.

An issue of “The Economist” a couple of years ago focused on the debate about the perceived decline of real innovation in recent years. Whether or not the perceived decline is real, it begs the questions of why and what can be done to mitigate the perception. Could it be the pressure to innovate is itself killing innovation? One possible validation of this notion is the often seen phenomena that according to the measure of our intense desire for something, is the measure to which it eludes us. A more rational aspect points to a temptation to label something as innovative when, indeed, it hasn’t reached the level of adoption required for true innovation. While some invention may be massively clever and endearing to its small circle of fans, the bulk of the world remains indifferent. This shouldn’t, but often is, mislabeled as innovation. We lack innovation because most organizations don’t truly know what it is.

Why is the distinction between invention and innovation so critical? I would like to suggest that innovation is the desired outcome, while invention is one of the elements or prerequisites. On the path to innovation we must invent.  The process of invention begs failure, which increases learning and knowledge and is the investment in potential future innovation. Yet many organizations are failure averse. We need prolific invention from all possible sources, technological as well as non-technological. But invention alone isn’t enough.

While invention is the precursor to innovation, another critical ingredient is required. The value proposed in said invention must also be adopted by customers. I often wonder how many truly useful inventions never materialized because their value proposition was never effectively communicated to potential beneficiaries. The sad truth is, most inventors are really good at developing very useful inventions, but lack the skills to effectively communicate the value proposition. Therefore, an additional precursor to innovation is effectively and successfully marketing inventions. Inventors come up with really interesting and clever ideas. However, it’s the innovators who take a clever invention and effectively communicate the value proposition, which then drives significant adoption (i.e. lots of customers). I would like to suggest that the true measure of innovation is the rate of social adoption of some value proposition (social or technological) and thereby creating significant new demand.

Just like the challenges of the “fire swamp” in The Princess Bride, the journey to innovation is anything but easy. Nevertheless, we make the work possible when we have clarity about what innovation truly is, and is not.

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This article originally appeared on FutureSmith Blog and has been republished with permission.

Human Resources: Strategic Partner for Services

By Bob Giacometti

Traditionally, the role of Personnel, as Human Resources (HR) was once known, centered more on administrative and support activities such as hiring and transferring, maintaining employee records, and administering appraisal, compensation, benefits, equal opportunity, and other employee relations programs. While important, many HR teams still operate outside of the strategic planning process and business operations.

As more products became commoditized, shrinking profit margins, many companies such as Avnet, Dell, DuPont, EMC2, HP, IBM, Johnson & Johnson, Motorola, Oracle, Siemens, Xerox and others, began offering fee-based services and client solutions for growth and higher profits. Working with these and other clients, The INSIGHT Group developed unique perspectives on the cultural, organizational, and business process changes required for success in services – along with a more active role for HR – a role integrated with the strategic and operational fabric of the services business. This blog post shares highlights from The INSIGHT Group’s White Paper that explores this new strategic partner role for HR. Continue reading

Unraveling some of the Mysteries of Factors Driving Innovation Success

mouse trapBy Douglas Olsen

Innovation is often cloaked in some degree of mystery – a black box where “change happens” and the world is transformed. Success is often fleeting, and, when failure does occur, there is usually a multitude of views as to what went wrong, with the only commonality being “it was the other guy’s fault.”

Why is it that some inherently good ideas fail and some rather questionable ones seem to stay around forever?

Recently, Raghu Santanam posted in a Center for Services Leadership blog that innovation must take into consideration issues of consumer capability and consumer involvement. This resonated with me. Both of these issues speak to the need to have a customer-centric approach – trying to understand the situation from the perspective of the individual/organization undergoing the change. This does not negate the importance of the views of internal stakeholders, but it underscores the importance of willful and deliberate customer adoption of a new offering. I would like to build a little more on this theme.

I published a book a short while ago based on extensive consideration of existing research as well as examinations of successful and unsuccessful change initiatives. In the book, I laid out a number of fundamental elements that must be present in any successful change context. Let me cover three of the more critical factors here.

Continue reading