Innovation is crucial for a business in the digital age. To do it effectively, you need a plan.
As the world shifts to greater adoption of digital technology in our everyday lives, businesses must adapt their strategies to embrace this shift. With regard to innovation, digital transformation is crucial – but there are some caveats.
You need an innovation process more than ever
Innovation has moved to the forefront of business operations – even for small businesses, which have a better shot at competing than in the past. Consider the explosion of Etsy, and how little attention global retailers may have paid to this DIY marketplace in the beginning. These largely female-run small businesses do well enough that more than half their owners would consider innovating the way they operate – by purchasing equipment, etc. – to expand. And none of it would have been possible before the digital revolution.
For any business, innovation is necessary, and intentionality is critical, particularly around digital transformation. Why is that? Because rapidly changing technology makes the rate of failure higher than usual. Matt Greeley, CEO of Brightidea, calls these "zombie projects" – dead ideas that are holding you back because no one thought to ditch what wasn't working. Your innovation process needs to be on point from end to end.
A quick review of innovation from end to end
What does an effective innovation process look like? There are a few basic components to include, whether you're organizing with a simple spreadsheet or using automated apps or software.
- Innovation team leader: This person ensures all the moving parts are working together as they should, and acts as a liaison between the innovation team and management or executives.
- Ideation process: From deciding who gets to offer ideas to how and where they're collected and recorded, ideation can't be haphazard. Otherwise, great ideas might get lost in the shuffle while not-so-great ideas are taken too far, ultimately failing. This is where apps are really useful, especially with larger teams. Everyone can submit ideas, and then also vote on the ones that have the best potential.
- Sponsorship: Great ideas need to be nurtured and followed, and someone has to foot the bill. The project sponsor takes the lead on securing funding for next steps and seeing the project through.
- Prototyping: When many people think of innovation, they picture a team of R&D guys building, testing and rebuilding an innovative new gadget. Those who put ideas into practice are important, but they aren't the entire affair. The process is complex, and outcomes are uncertain. That's why you need a system.
- Follow-through: From keeping tabs on ideas that are a bit ahead of their time to tracking the ROI of projects in process, follow-through is critical to maintaining any innovation program. Some degree of failure is inevitable, but you have to be failing forward to prove the value of your innovation efforts to C-level stakeholders.
There's a lot to the innovation equation, which is why automating the process makes sense – especially when there are so many affordable options for doing so. That's the advantage of innovation growing in popularity, and an example of digital transformation used well.
Don't neglect the physical
Even with a system in place, you need to be careful you're never innovating just for the sake of it. This is an easy trap to fall into when tasked with digital transformation.
So many technologies are on the edge of exploding right now – the internet of things, virtual reality, augmented reality, artificial intelligence. There's a lot of excitement, and it's easy to move full steam ahead with the first "fun" idea that comes to mind. But it's important to remember that digital isn't about replacing all things physical, but about incorporating the two seamlessly so each supports the other.
It comes down to the customer experience. If you're innovating without a clear market demand, you're doing it wrong. And if you move forward without a design-thinking approach, you're missing an opportunity to really wow your target audience.
To that end, you've got to do your research by experiencing your consumers' environment. You should also make use of social media analytics to understand what your audience is looking for. The breakthrough idea you're looking for is likely right there on social.
Digital transformation is happening, and will continue, so it's smart to focus on moving your business forward in pace with the changes. If you don't have an innovation process in place, create one. Then use it to make strategic moves for maximum gain.