“Chief Digital Officer”, “Chief Transformation Officer” are new executive roles that organizations are currently injecting in their CxOs Level, smelling opportunities behind digital innovations. There is a catch though, and most of them will fail running on the digital trail: like writers who want to publish only “ best seller”, they will always wait for the next bandwagon and they will never get the plus of early adopters.
What mistake do companies often make when they plan innovation?
Most companies consider innovation as a product, not as a process. This means that they focus most of their energy on finding the “right” idea, not in building the process of transforming ideas into something valuable for their customer.
Start-up Hubs, Innovation Hubs, Hackathons can be helpful but they tell nothing about the ability of an organization to innovate. If you remove the marketing flavor from these events, actually there is not much left. Investing in these initiatives provides no competitive advantage (if a great idea will pop up, chances are Tech Giants will make an irrefutable offer, vanishing the whole effort in creating a competitive advantage).
Democratization of ideas
In our days, ideas are everywhere, easy, fast and cheap to google: to pull out value from them is a different story that requires investing time more than budget, it needs a relentless work until the idea will shape up in a real solution. The fact is that Innovation requires its business model: Innovation is not about manufacturing, it has more to do with farming. If you master the innovation process, the final product is a consequence of your ability to transform an idea into something real.
Just like a farmer does with a seed.
In perfect condition, at the right latitude, no parasite, rain and sun balance, a farmer will need only to make sure that no one “reaps” the crop on his behalf. But what if the weather is less than ideal (recession), new parasites change the soil (e.g. COVID), the plant grows weak (immature market)? That’s when a good farmer makes a real difference, understanding what is missing or what is in excess, and creating back the balance, leveraging past knowledge to create the future.
Innovators should to the same. their job does not stop making a patent or finding the right idea, waiting for angel investors to buy it. Innovators care about the growth of the idea in a product, as farmers do with seeds into crops.
Innovation creates value by exploring ways to target unfulfilled customer’s needs.
Ideas as “seeds”, innovation as farming
In this article we are going to explore innovation creating an analogy with farming:
if ideas are “seeds” how can we farm them in a high yielding, high quality “crop” that satisfies the end-user?
When you think about your innovation strategy, you should as well consider all factors in your control, which might influence the growth of your ideas under given “climatic” and “soil” conditions, always keeping in mind who is the “end-user” at each step of the process.
With this analogy, we will unlock our knowledge by transferring what we know well to the innovation process.
So, let’s start by thinking around what do you need to consider in a farming process:
Analyzing, forecasting, furrowing, seeding, reaping
This is about understanding the present: many organizations fail understanding where and when they bring value to customers: competing on price, they miss differentiating around their key qualities.
Understanding clearly where and why an organization makes money in the present is key. In the agronomy analogy, poor soils will produce poor results and the best crops grow on fertile sandy soils and loam. Therefore, organizations need to use data to analyze their innovation potential, becoming aware of what grows and what does not in their ecosystem, why it is so, and what the others do.
There are different ways to achieve the same objective: what makes the difference to increase the innovation potential is the learning during the journey
Exploring new fields requires discipline and ability to retrace; the business model should pragmatically come as a consequence of what you need to do: not heritage, not a trend!
Innovation will never be linear: although emergency might help to focus energy, Innovation is about creating a proper sense of urgency. Understanding what are the competing forces that are currently changing the market and how they might alter your future. Nothing remains the same, so the investment needs to be widely used to explore at the best what you know.
Forecasting is about understanding cycles and upcoming events. Sensing time helps to adequately respond to changes. The initial set up, retracing, go-to-market, they are all time functions that cannot be eluded, but should be maximized.
What do you need?
Almanac and Calendar: Building a “recursive time plan” is very important to understand what you are expecting and to record what is happening so that you can build on in the future.
AI & Data: This is the perfect field for AI as it gives its best when dealing with discovering hidden patterns and helping “humans” to add their sense.
In the innovation digital game, you need more people like Marconi (building connections between devices already on the market to assemble the first radio) and fewer ones like Leonardo (inventing the flying machine, on paper).
The future might be independent of the past, given the present: Today opportunities will shape the future.
Furrowing …maintaining a road-map
Defining potential pathways, observing how they evolve, tracing back changes toward realistic expectations are key to create and keep the momentum. A straight empty furrow in the soil is a wall of crops in the farmers’ mind, looking for the right balance between sun and water, learning from the way the plant will grow. Failure is part of the journey.
Create the right environment is key: there is a huge debate on the culture of failure and how this can be healthy on innovation. The secret is to balance out the number of attempts with tangible results. AI can be a great facilitator as it can find an easy connection among experiences that can be disconnected, promoting discussion around specific aspects of the experiments.
Focusing on the right level of details: It is key to identify the proper granularity of the documentation you want to put in place, keeping in mind that what you will learn from this experience will help you in the future.
Seeding…starting the journey
Establish a portfolio of initiatives for all identified pathways. Keep them simple but develop them with the idea of integrating them into something more complex. Not all will flourish, but each of them will give you important information on how the ecosystem evolves.
“Linchpins” in your organization are the ones able to create controlled degrees of freedom, optimizing collaboration, investment, and processes. Successful organizations can identify them internally or in the market, they give clear mandates to act, they measure them on the potential they can bring, and periodically draw a line on their investment reinforcing their sponsorship or not.
The balance here is between freedom and standard. You need to keep your freedom by following a specific standard.
Don’t forge your components unless you cannot find them on the market. Innovation is about finding new ways of assembling existing things, and by that creating new products: from a seed, a tree will grow.
Reaping…walking the journey
Innovators need to maximizing the adoption of sponsors, stakeholders, early customers.
At this stage, innovators should gain the commitment to driving change, they should show “first fruits” and let customers and stakeholders “taste” (not test) them, creating participation around the value first versions are bringing back, aligning the vision to what they will mean for the future.
Odd enough, this is a very frustrating moment as, many “spectators” will try to jump on the bandwagon, putting a cherry on the cake and getting credit now they start to see a potential. Projected to the future, this is not a threat for innovators but an opportunity to “finance” the next phase. Innovators should not expect all their stakeholders, sponsors have the same understanding, the same vision: they need elicit consensus changing their way of explaining, their language, their example according to what is mature.
Reaping all “fruits” at the same time is a waste, good farmers simply known when to come back and reap the next.
No idea will be marketable immediately. The potential eliciting from your first product is what will fuel further your initiative. Innovation is an iterative process, just like farming.
You will always get from it the seeds for your next cycle. Iterative processes require patience and time. Many start-ups fail because “the idea” fades away with the journey.
If you don’t have clear in your mind the benefits of a second release (Release 2.x don’t count), while finishing the first one, better hold on and learn from your failures
So what do you need to start?
An agile approach is particularly suited to initiatives that have high potential business value as they allow the organization to test different approaches at the same time. The biggest challenge is the “injections” of initiatives by senior executives who have been influenced by technology vendors. Injected projects often fail, which can significantly set back the organization’s Innovation program.
Just because executives and boards of directors may feel pressure to “do something cognitive” doesn’t mean you should bypass the rigorous piloting process.
Again the point is not to prove you are right, the point is to understand how that idea can satisfy a customer’s need.
A strong innovation process is set around 3 simple steps:
1. Screen: Identify initiatives that allow testing of different technologies at the same time.
Rationale: the objective is to start the journey that will lead to a consistent digital ecosystem where creating, adjusting and maintaining assets are time and cost-efficient. Starting by identifying the best go-to-market solution makes no sense. Documenting barriers or challenges it is equally important than successful implementations.
2. Protect: Stay away from executives’ sponsorship linked to the technology behind the pilot
Rationale: While this might grant visibility and even some extra founding, there is the risk of dependency in the evaluation and of being influenced by technology vendors. Engage community stakeholders to sponsor the overall viability exercise, push the balance into the future
3. Compare: Establish a rigorous process to compare pilots’ results and recognize the benefits
Rationale: each pilot is a seed, so although you cannot expect each one will bring results, each of them tells a different story; what it counts is the learning process, success is in the controlled iteration
Innovation is about changing the status quo and that requires a huge effort, a relentless work in a hostile environment. Innovators are settled explorers, they have a pioneer’s spirit: they stop traveling and start to change the world they leave in.
To master innovation, organizations need to put aside the industrial process and enable a farming approach, starting by identifying, internally or from the market, visionary leaders that can create teams, to assemble functionalities and to use existing tools in a creative way, generating consensus around ideas. Without visionary leaders, ideas don’t grow in products, ideas will have no market value.
In other words, Innovation is an iterative journey and an organization needs to enable the right people with proper set up, this to grant them enough freedom to create new standards. That requires:
Limited capital and other resource expenditures to managing risk: large founding creates a lack of control and inefficiency, sucking time from the creative process. Innovation is about assembling the available.
Periodic assessment of the true performance of the design and/or solutions in a controlled but “live” environment. Pilots are key to understand the next steps, but only visionary leaders will be able to explain tips and traps to envision new improvements.
My other article on Innovation
Disclaimer: Views or opinions represented in this article are personal and belong solely to the article writer and do not represent those of people, institutions or organizations that the writer may or may not be associated with in professional or personal capacity, unless explicitly stated.