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Innovation is what leads to differentiation. There need to be both “hard” and “soft,” visible and invisible forces to drive the success of innovation management.

The emergence of potential opportunities for exploring digital transformation is likely to follow a nonlinear pattern as the pervasiveness of an organization’s digital journey increases. Change in the digital era is coming at seemly a much faster pace, more potential disruptions, with a broader scope, scale, and impact on the business’s surviving and thriving. Winning the digital dynamic means engaging creative thinking, enforcing cross-functional collaborations, and building unique business competencies. Innovation is essentially an intentional novelty bringing sustainable benefit.

Here are five forces behind digital innovation.

The Business System

The highly innovative companies usually have the powerful innovation navigation system involved in tapping the business ecosystem for collective perspectives and integrating critical business elements such as people, process, and technology into differentiative innovation competency. They can connect the key resources or assets in the vicinity and context to the information and resource-rich hubs or clusters across the business ecosystem to spark novel ideas or amplify innovation effect.

The digital organizations are in fact the dynamic and nimble business system, which is a collection of hyper-connected and interdependent subsystems that keep spinning and evolving. The degree of business responsiveness and innovativeness depends on how those subsystems interact with each other, and those interactions can be structural, technical, informational, or human, in generating and implementing new ideas to achieve business value and bring high-performance business results.

Information Technology

Innovation happens at the intersection point of people and technology. Information is one of the most time-intensive pieces of the innovation puzzle. Nowadays more advanced technologies bring unprecedented opportunities for people and businesses to change, innovate, and figure out the better ways to do things. Information and Technology are the key ingredients of the business solutions and assets that can be applied in new and different ways to generate massive business value.

Organizations become highly effective in executing innovative ideas by leveraging powerful digital platforms and technologies, harnessing cross-functional collaboration and continuous improvement. Information and Technology also plays a crucial role in creating a disciplined and managed space for developing and testing new models, innovative products and unique business approaches.

Structure

Ideally, the digital organizational structure needs to break down silos, and be solid enough to “keep things in order,” but also fluid enough to interact with the expanded digital ecosystem seamlessly. The physical organizational structure, relationships, virtual platforms, and social connections wrap around each other to ensure ownership and responsibility, streamline information and idea flow, and enforce employee engagement and empowerment.

Logically, to catalyze business innovation, it’s important to be intentional about developing business processes that harness cross-functional communication and collaboration, as well as enforcing business flexibility and fluidity. New generations of digital technologies such as social platforms or other collaboration tools are enabling not only the structured processes of the past but also the unstructured processes of the modern hyperconnected digital enterprise to improve business collaboration and speed.

Limited hierarchy works best in a creative environment in which the free flow of ideas and their prompt implementation is a key element of improving the success rate of digital innovation.

Customer

One of the key determinants of whether an organization can move to the digital new normal is how well it can delight customers by “doing more with innovation.” Customer-centric innovation means that you have to involve customers and different stakeholders, listen to their feedback, and involve them in both idea generation and process implementation.

Customers, including prospects, should be studied and observed. Customers should always be involved, but not be the main or the only driver behind the innovation process. Gain a deep understanding of them through empathy and make observations by taking a more inductive approach as to what the customer wants to accomplish “next.” This is where proactive listening is very important and becomes a vital link in innovation management efforts.

To put it simply, people should be the center of innovation management and they are the major focus for innovation process and accomplishment.

Culture

Culture is the melting pot to inspire creativity. Culture is the collective mindset, attitude, and how things get done in the organization. Culture is an invisible but powerful force behind innovation. A creative team should have cognitive differences, diversified worldviews and the culture of inclusiveness.

Many believe there is no innovation without diversity in the age of abundant information, rapid changes, and hyperconnectivity. Diversity is a basic reality of the modern digital world that needs to be better understood and well orchestrated. In fact, at team setting, collective creativity or creative culture is only achieved through the diversity of thoughts and human interactions. Highly creative people in the team or across the teams are almost accidentally collaborating, clarifying, building on each other’s ideas, discovering nuances and unexpected relationships, and so on. All of which enrich collective thinking and contribute to a fabulously rich innovative output.

Innovation is what leads to differentiation. There need to be both “hard” and “soft,” “visible” and “invisible” forces to drive innovation management. There are many ways to differentiate and, therefore, there are many ways to pursue innovation. The ultimate business goal is to unlock latent expertise, streamline idea flow, scale innovation effort, and amplify innovation impact across the business ecosystem.

By Pearl Zhu

About the author

Pearl Zhu is an innovative “Corporate Global Executive” with more than twenty-one years of technical and business working experience in strategic planning, Information Technology, software development, e-commerce and international trading, etc. She holds a master’s degree in Computer Science from the University of Southern California, and she lives in the San Francisco Bay Area for 15+ years. She is the author of the Digital Master book series and the Future of CIO blog.

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