INNOVATION FOR THE DIGITAL ERA - Digital Innovation (Over) Simplified

INNOVATION FOR THE DIGITAL ERA

-Digital innovation (over)simplified

This article was carried by The Hindu Business Line dt 5th Sept 2019.

https://bloncampus.thehindubusinessline.com/b-learn/paths-to-innovation-in-the-digital-era/article29342727.ece

A lot has been written and talked about on the subject of innovation. How it affects organizations and what are the benefits of a culture of innovation. The case study of how 3M was at the pinnacle of innovation in product development has been a part of the corporate lore and was much studied when I was at B-School. Innovations until the 70s & 80s were very manufacturing or assembly line centric. And then the internet took over - redefining the meaning of innovation for good. 

Here are a few pointers to look out for, when embarking on an innovation journey in the tech or digital era: 

INNOVATION IS ALL PERVADING: Innovations can be in the domain of products, processes, distribution, communications or anything else. Think of Applenot so much as a product innovator but as a case study in supply chain innovation and you get the drift. Also for innovations, there need not be ‘specific’ problems to solve, there are just ‘broad areas’ to sniff and delve into for improvements & transformation.

INNOVATION IS TRANSFORMATIONAL: Innovations in today’s times are transformational and not incremental. One could spend a lifetime innovating on products incrementally only to realize that the entire industry has been disrupted. Ask Kodakor Nokiaand they’ll nod in despair. Internet companies top the listing of most valued companies globally when just a decade ago the list was dominated by oil majors and manufacturing giants. The Digital Era has given rise to a lot of new business models.

·       The Multi-platform model: The platform serves as a convergence point between service providers on one side and customers on the other. Matching customer to service provider, offering convenience, facilitating payments & transactions etc is enabled by technology. A few popular examples are - Asset Sharing: Uber, AirBnB, Oyo rooms and the likes. Service: Zomato, Urban Clap, Blabla Car, TripAdvisor etc, Product: Amazon Marketplace, eBay, Communication: Whats App, WeChat and so on. Here, the demand and supply side feed off each other such that growth on one side leads to growth on the other.

·       Platform/ Software as a service: Most software today run as a service and not as a product which one can buy off the shelf. Microsoft, Autodesk, Adobe and others no longer offer a one-time purchase product. They offer the service as a periodic ‘license’ replete with all upgrades et al. Riding on good connectivity and cloud infrastructure, capital spends are almost done away with. This helps the client as also the service provider since it assures him of constant revenue streams.

·    Subscription model: Netflix, Spotify, Magzter and the multitude of such services have displaced the ubiquitous CDs/DVDs, magazines. Why just entertainment, you could even ‘subscribe’ to gaming portals or even Lunch meals or bicycles. I am waiting for Cab services to offer it - Weekday subscriptions for Home-office-home or Weekend packs and such. Ola, Uber are you listening?

·       Others: Additionally, there are ad-funded, limited period free trial and Freemium business models where you fill the funnel with the lure of free and then convert to paid by endearing the product to the customer through high level of personalization or sharp contextual upselling.

All these business models (and more like crowdsourcing etc) ride on the internet and are big ideas – innovations which don’t necessarily require a lot of capital but transform the way of doing business in the process, adding a lot of value.

INNOVATION IS NOT A ONE-OFF SPARK, ITS A CULTURAL CHANGE: A truly innovation centric organization requires a DNA shift. They continuously look for newer ideas, sift through & discuss these ideas – however small or insignificant they may seem, evaluate the business impact, assess risks and be willing to rewire themselves. The ideas themselves can come from the business environment or even from a potential customer.

Innovation demands leadership that is optimistic, welcoming to changes, open to criticism and most importantly don’t fear failure. They don’t hold on to their ideas but are willing to accept that brilliant minds are all over, irrespective of the hierarchy– waiting to be unshackled.

INNOVATION HAS TO TAKE THE BUSINESS GOALS FORWARD: Innovation is not an end in itself, there has to be a clear business objective on the journey to innovation. There are businesses which think of themselves as innovative once they launch a smartphone app. when they are no more than digital brochures. Similarly, adoption of newer technology is not innovation by itself, it’s at best an enabler. Innovative businesses take a stock of things that worked and the value they added to the organization as also of things that have NOT worked. 

INNOVATION IS ABOUT PEOPLE & PARTNERSHIPS. Innovative businesses are made by innovative people. The leadership has to facilitate the process by suitably re-skilling the key people. The process of re-skilling, learning – unlearning and refreshing is applicable in the digital era more than any time in the past. Providing exposure to wider business environment, forming a world-view, shared learnings as also inculcating an atmosphere where people are free to make suggestions without being judged is a key part of the innovation journey. 

Given the diverse environment we are operating in, all the skill sets are not always available within the organization. Hence there is a need to forge partnerships to succeed. Partnerships of diverse perspectives but shared values acts as a force multiplier and churns out new dimensions. Eg: Vodafone’sglobal partnerships with Insurers, fleet operators, automobile manufacturers for IOT (Internet of Things) unleashes huge potential to transform these businesses.

The above are just a few things to remember when one takes the path of being consciously innovative. While history is replete with examples of success stories coming from ‘one-off innovative spark’ it’s unlikely now. The spate of changes and disruptions in the digital era demand agility and near real time actions – all the time.

What internet caused in the last two decades could be induced by Blockchain in the times to come. Blockchain- which is a technology or a philosophy depending on how you look at it - is likely to trigger off a wide range of innovations in all spheres of our life – Banking & finance, Healthcare, e-governance and virtually everything. Similar for other enabling technologies – Artificial Intelligence, Connected devices, Additive manufacturing and such. 

Resources for the next round of innovations to kick in, riding on the core pillars of Big Data, high quality connectivity and access to superlative computing power and available now. And these innovations could hit you anytime, anywhere, any industrywhatsoever.

The stage is set.  Are you ready?

SANDEEP BANGIA