Five steps to digital innovation
First you need to map and prioritize the needs of your organization. Technology comes in second. Ideas arise from inspiration and interaction, but need to be ranked and properly tested before implementation. Marko Yli-Pietilä, the Business Development Director and Managing Consultant at Midagon, walks us through the five stages of successful digital innovation.
“I think that the approach to creating new business through industrial internet and digitalization has been too technology-oriented for a while now. With agile methods the testing process of new ideas can be quite speedy, but as things get faster, we tend to overlook the actual starting point and the foundation on which we should be building,” Yli-Pietilä points out.
According to his view, digital innovation should be a structured process, in which the entire organization should be involved. In the list below he describes the journey of innovation from an idea to reality.
1. Map and prioritize the specific needs of your organization
“Companies shouldn’t rush into making decisions about the use of certain technologies. In the very beginning, one needs to look at the strategic goals of the company, and think about what needs to be done and what needs to be changed in order to achieve those goals. In this primary stage, the technologies are irrelevant. The focus needs to be kept solely on developing the organization and its functions.”
2. Think about how technology can help you
“Once the priorities and needs of the organization have been defined, then it is time to turn the attention towards how things are done. It is very likely, that digitalization provides the tools for streamlining processes. Nevertheless, what needs to be kept in mind is that digitalization is no panacea. Digitalizing existing procedures just for the sake of it rarely leads to the maximum results. In fact, it may even end up adding unnecessary steps in the overall process. Again, ask yourself what it is that you want to achieve. Then let the technology help you get there.”
3. Unleash the creativity lurking inside your workforce
”I’ve been involved in projects where companies try to foster innovation by bringing someone from outside of the organization to implement creative ideas. Personally, I don’t think that’s the optimal way. There are already numerous examples and case stories in the world of digitalization and industrial internet from where to draw inspiration. Your own colleagues have the best understanding of your company, its business and environment. Why not utilize that? Digital innovation can mean different things to different players. So, instead of hiring a stranger to work their magic, see what your people can do. Have them think about the solutions that provide the greatest benefit to your organization.”
4. After background research it is time for internal testing
“As soon as you have a clear view of your company’s strategy, processes and human resources, it is time to put the ideas to test. With agile testing methods you can test, say, twenty out of hundred different ideas in a few week’s period. The main goal in this stage is to quickly get a perception of which ideas have actual potential business-wise and are worth taking further.”
“Interaction between all kinds of people from different parts of the organization enables going through a broader set of perspectives”
5. Ready, set, pilot!
“After the first round of testing, the number of ideas left in the process has usually decreased to a maximum of five. This is when the ideas need to be evaluated against the set business objectives and bring external stakeholders to contribute to the process. Customers, for example, need to really get acquainted with this new thing, a product or a service, to be able to give their extremely valuable feedback. Because the crucial question that needs to be answered is whether this innovation in the making is something that they are actually willing to pay for. So it is not enough just to create something that technically works. That something needs to help the company either increase profit or, on the other hand, decrease costs. “
Anybody who has ever been involved in the process of innovation surely knows that the journey from having just a hint of an idea that could possibly grow into something bigger, to introducing the first prototypes of a given digital innovation is certainly long and eventful. Everything can go according to the plan – until it doesn’t. Even going through all the necessary stages doesn’t guarantee that the result is optimal, or even functioning. Is there something that could be done in the very beginning in order to improve the chances of succeeding?
“Returning to the very beginning of the innovation process, I would say that the more heterogenic bunch of people throwing in their initial ideas and brainstorming together, the better. Interaction between all kinds of people from different parts of the organization enables going through a broader set of perspectives,” Yli-Pietilä contemplates.
And ultimately, who in the organization should be in charge of the process of digital innovation?
“Often it is either the CDO or the CIO of the company. However, in my opinion the process itself is so comprehensive, that it shouldn’t simply be lumped together with traditional information handling. It requires more than that. Therefore I think that it is easier for CDOs to take responsibility and leadership in the overall process. For that reason, companies who want to be innovative in the digital world need to start by appointing a CDO, if they don’t have one yet,” Yli-Pietilä concludes.
Marko Yli-Pietilä works as the Business Development Director and Managing Consultant at Midagon.
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