Digital innovation projects fail more often than not.
There are 3 different types of digital innovation that organisations attempt and the problem lies in the balance among them:
Organic innovation is when innovation is internal.
Mergers and Acquisitions (M&A) are when companies get their innovation as mature offerings from mergers and acquisitions.
Co-creation is when companies work with vendors to bring new concepts to market.
Increasingly problematic is that most companies rely on M&A.
The problem with M&A
This digital innovation strategy can be successful but a lot of companies are paying a lot of money for a new product or service that someone else has de-risked. There is a better ROI in organic innovation which will allow you to develop the skill sets and innovation culture you’ll need to survive.
M&A innovation doesn’t always work as it brings in complexities that can be insurmountable without the proper focus. Basically you can’t buy the culture changes that are necessary for systemic innovation.
Successful, modern digital innovation methodologies
We see a lot of success with the following types of innovation: Design Thinking, Lean and Agile. Much of that success depends on the culture within an organisation.
At NearForm we work with enterprises to see how they innovate so we get to experience what does and doesn’t work.
Many successful organisations create an internal startup mentality in an effort to move quickly. They have an internal Venture Capital like fund with a traditional “funnel” of innovation projects.
In this process an idea moves through stages:
come up with an idea
idea is identified and receives support
idea is validated
idea is executed
We’ve observed Design Thinking, Lean and Agile methodologies to be very effective in funnels such as this. Another valuable aspect of such a funnel is that concepts that are not valuable can be weeded out. Many companies are not good at this.
These processes should be nimble. The balance between fast decision making and risk important for every enterprise.
Damian Beresford speaking at CIO Benelux
Ideas from the ground up
A few common innovation failures are that people don’t have enough ideas and often don’t pick the right ideas. With the right culture ideas will be coming from the ground up.
Design Thinking has a key role here. It’s important to focus on the customer needs. If Design Thinking is systemically and culturally ingrained in the organisation everyone is focused on what’s best for the customer and is personally invested in thinking of new ways to achieve that mission.
Identifying and Supporting ideas
Everyone in the company knows that they are free to – and expected to – share ideas for improving things. They also understand how to share those ideas.
When everyone understands how to share ideas the next crucial step is to identify promising ideas and support their promoters through to execution.
This requires real commitment from the company since there is an opportunity cost here: taking people away from their jobs and giving them a window to validate the concept.
That support should come from something like an Innovation Team. In our experience when that support is absent, ideas tend to remain dormant. It becomes evident that although bright ideas are being asked for they aren’t being nurtured.
An absolute commitment to supporting people with ideas is imperative, even for ideas that end up not being viable.
Rewarding employees that come forward
Enployees need to be rewarded intrinsically and extrinsically.
People need to feel that contributing to the company is personally rewarding and valuable.
People also need to be rewarded with salary, benefits and promotion.
Regardless of whether an idea pans out or not entrepreneurial employees should be extrinsically rewarded for sharing promising ideas.
Successful digital innovation is all about culture, culture, culture.
A culture of innovation cannot be bought it must be developed internally through Design Thinking and grassroots innovation systemically.
Validation – How NearForm makes a difference
In the validation stage we work closely with organisations to deploy a rapid process. We call this our discovery phase.
Think of it as modern Lean methodology. It is rooted in discovery-driven planning. We work with enterprises to deliver an accelerated validation of a concept for digital projects. This usually lasts around 2-4 weeks.
The process can be leb by design, architecture or devops depending on the concept.
Example of Validation process
Take an enterprise that is looking to develop a new customer journey. Over two weeks we bring the customer, business and technology together. We start with an intense workshop and spend the remainder of the time on the outcomes of that workshop.
Outcomes of validation process
There are usually three outputs:
High-fidelity prototype: these come from design-led engagements and can be presented to stakeholders and customers to test assumptions that have fed into the project to this point
Architecture document: describes how the product will be built, the technology choices that will be used, and calls out major risks and the assumptions we’re making
Work plan: a refined project plan that defines go-to-market-ready product, defines milestones towards creation, specifies resources needed, and provides a rough budget
We’ve worked with a lot of companies who can come up with good digital innovation strategies, run successful pilots, and not be able to fully execute. We help our clients execute.
A lack of appropriate skills or capability, or capacity problems can stand in the way of a project’s success.
Co-innovation is when enterprises bring in delivery specialists from outside the organisation to work in tandem with their internal team to bring projects to fruition. It’s a satisfying and modern way to innovate bringing collaboration to a level that many enterprises have never experienced, but it works.
Damian Beresford is Technical Director of NearForm, which partners with organisations across the globe to help them achieve sustainable innovation through the design & delivery of open software, methodologies and technologies.
Damian has worked with organisations across many sectors.
If you’d like to understand how we can help you stay relevant & scale to demand, contact us for an exploratory review and feel free to connect with Damian on LinkedIn.
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