Innovation and Transformation – Fix the pothole forever #bestpractical
To explain different aspects of innovation and transformation in business, let’s use the analogy of a pothole: A friend, living in Switzerland, asked their council to fix the pothole on his street parking spot. The technicians came and completely over-engineered a solution, filling the hole with concrete and resurfacing the spot with tarmac.
When he asked them why they went to that extreme to fix a spot on the road, their answer was “we now know that we will never have to fix that pothole again”.
The mindsets around innovation in our businesses often represent these extremes, of just plugging the whole with dirt, to digging up the whole area and resurfacing it.
10X pressure to innovate and transform
Businesses are under pressure to constantly improve their state compared to the competition and market forces to stay in the race.
It was the norm previously that a business had to overhaul its business model every 18 months due to these forces.
The COVID 19 pandemic has triggered a huge scale of transformation into the “immediate” column inside “Horizon 1” initiatives, where they were probably planned for much later under the “future threat” of the 4th Industrial Revolution (4IR). Smaller and older businesses are typically lagging, or they have transformed without realising, to survive the storm.
The reality is that the exponential scale of change (10X) for businesses in general is imminent and we will have to get much better at managing our innovation journeys.
Innovation and Transformation: what to consider
Here are three considerations to unpack.
- Business Operating Model
- Meaning of Innovation and Transformation
One common behaviour and two mindsets are mostly at play when it comes to innovation and transformation. Each adds different value, provided the plans can be balanced to accommodate both the rate of change required, and the impact introduced by the change.
People with these mindsets are uncomfortable to embark on a journey before knowing the exact route and detail points before setting off. The underlying emotion is “we don’t want to miss something or have to redo it”.
This often causes frustration for the “quick-fixers” and the “agile-or-nothing” proponents.
However, the world-peace mindsets are crucial for finding the optimal route and identifying the potential risks on the way.
In contrast you find the “quick-fixers” who will jump to a solution based on the latest software demo they saw, as long as they can just do it immediately, disregarding what it does to the longer-term picture.
This then frustrates the “world-peacers” for not considering the implications.
This mindset brings the value of urgency in response to landscape changes and shorter-term returns.
Behaviour – Fixing the wrong problem
Albert Einstein was asked how he would spend his time if he had one hour to solve the most important problem in the world. He is quoted after some thought “I would spend 45 minutes understanding the problem and 15 minutes solving it”.
Human beings are by nature problem solvers and it is interesting to observe teams faced with a challenge. As a facilitator, your toughest job is to get the team to spend enough time on understanding the problem before solving it.
An observation is that many teams jump to solving a problem with a software application and not enough consideration for the root cause, which often lies in a data flow, a business process, a business rule, a human being or the software application that automates all the capabilities.
Business Operating Model
A business operating model consists of two major areas that are designed into the structures:
- Run the business, and
- Change the business
The challenge with these two worlds is, that you need the business to run steady and optimally as long as possible to improve your returns, so any change introduced messes with that immediate objective. However, if you do not introduce innovation and transformational change your business will under-perform in future.
Meaning of Innovation and Transformation
When we talk about innovation and transformation, there is a range of meanings we group into these words. It is useful to unpack these concepts a little further.
Innovation at the core means to “introduce something better”. This ranges from applying it to an existing solution to introducing a completely new solution.
Improvement – Innovation – Invention
Transformation at the core means to “change into something completely different”. This ranges from incremental changes to total disruption.
Incremental – Transformation – Disruption
The following model is useful for common understanding and language when evaluating your Innovation Roadmap.
A recipe for conflict
When all these aspects come together in deciding on what to invest in, you have a recipe for conflict and opposing groups at each other’s throats.
The trick is therefore to balance your innovation roadmap over the immediate and the future and the impact it has on the “running” of the business, while allowing for different contributing mindsets.
It is also important to remember that your investment typically consists of these major components, and not just the asset.
- Cost of the asset (infrastructure, software, capabilities, etc.),
- Implementation cost to get the asset working,
- Cost of interrupting the “running” of the business.
3 How to Tips on Innovation and Transformation #bestpractical
Innovation management is a large topic and not the focus of this article, but here are 3 practical tips.
Tip 1: Understand the problem
Follow Einstein’s advice and spend 75% of the allocated time on understanding the problem. You’ll be surprised at how the right solution presents itself if you trust the process of good solid analysis.
Tip 2: Scope for Return
Always have a Minimum Viable Product (MVP) mindset in the context of an end-state design when scoping your initiatives. This way you package your initiatives into bite-size sprints that form part of a relay to “world peace design” allowing all people profiles to contribute according to their strength.
Tip 3: Right Approach
Pick the appropriate approach for where you are on the Innovation and Transformation journey, whether it is Agile or Waterfall / Stage gates, or a combination – Wagile.
Always remember the investment lifecycle typically has a need for a stage gate approach, while the others, your asset/product/solution lifecycle, project lifecycle and the organisational readiness, are more open to Agile approaches.
Whether you prefer to fix the pothole forever or just plug it for now, the reality is that innovation and transformation has accelerated, and we’ll need to get much fitter in handling change much faster without compromising success in future.