Innovation the sad story of a buzzword

It was back in 2016 when the world was overwhelmed by a tsunami of buzzwords used in every talk, meeting up to the point of shaping entire corporate strategies.
The most used were Innovation, Digital Innovation, IoT, Industry 4.0, Artificial Intelligence,DISRUPTIVE!! … they like a virus infected vocabularies all over the world and people began to use them in a confused way until they became a weapon of mass destruction.
They have written tons of articles and books about them that created many more tons of Steve Jobs, Elon Musk and modern Nostradamus (which predicted the earth invaded by robots) scattered around the world.

And that’s not all, in 2020 a real virus called COVID-19 messed up the situation even more by adding to all this two other words Smartworking and distance learning and accelerated the implementation of new paradigms.

Forgive me this joking tale of a modern apocallypse of the digital age to introduce the topic but I believe it can describe well the chaos generated and which risks overwhelming entire companies that have misinterpreted the terms written above and in particular the word Innovation.

Let’s put order and start from the definition of the term Digital Innovation …

The term Digital Innovation comes from the English word Digital transformation or organizational change to the foundations of the transformation of the digital business.

More generally, we can define as Innovation as a Single fact imposed in the context of a radical renewal of a practice.

Wait, Wait, Wait :) … I have not finished ….

Speaking of structured companies, and not about startups, the problem arises when you think that to make innovation it is enough to have good ideas, in reality innovation must be thought of as a process within a company and as such must have a structure handle it properly.

Now please let us now analyze the main mistakes that are usually made …

#1

In the vast majority of cases, speaking of digital innovation, it has been entrusted to IT departments which are overwhelmed by problems in the day by day, the lack of time to update themselves on the evolution of the digital world and the simple fact of dedicating only 25% of their time to this activity actually leads to a proliferation of POC (proof of concept) which then fall into nothing.
This, in addition to generating a waste of money, generates a waste of time that from year to year becomes more and more complicated and expensive to recover as if at the beginning the necessary investment increases linearly as the years pass and time is lost.

And suprise!! The investment required increases exponentially as technologies evolve rapidly over time.

#2

Many companies say “We have to think like a startup …”

Mhhh Yes, there is bad news for you, it is practically impossible as usually successful startups are born from ideas generated by very young people who have the opportunity to work with very limited management costs and with enormous flexibility as at that moment they still do not have to defend their market position and the risks are more limited.
So if you are a medium / large company you must think like a structured company since you have the resources to do so.

#3

Companies established on the market stop looking at what is happening on the market as, by remaining anchored to past successes, they are convinced that they can replicate them indefinitely.

Ohh really ?? Look at the image below how many of you still use the object portrayed in the image?

And how many of you are using this other object instead?

These two examples are worth a thousand words, unfortunately the Kodak story did not end with a “And they all lived happily ever after.”

#4

In companies there is a sub-forest made up of people who, driven by fear of what they do not know, row against any new initiative, decreeing its failure.
There are often vain attempts to involve these people in internal idea generation initiatives, sometimes there are really good ideas but in most cases the initiative will fail if there is no process capable of vaulting ideas with KPIs and pre-established rules.

The largest and most valuable investment that a company can make, from my point of view, is in the internal culture to keep all the people on track and to explain to them that in reality they do not run any risk in participating in the change, a risk that is run vice versa if the company stops innovating and improving itself.

And now close your eyes, take a deep breath and let’s see how to seriously approach innovation.

First of all, a special Innovation department should be created, managed by a professional Innovation Manager who reports hierarchically to the Chief Executive Officer of the Business unit or to the CEO of the corporate.

The team led by the Innovation Manager must then be composed of some key people who will deal with the following points:
1) corporate culture in collaboration with the HR team
2) process innovation in collaboration with the production plants
3) product innovation in collaboration with R&D
4) digital innovation in collaboration with IT
5) budget management and procurement of any public funding in collaboration with Finance

The people who make up the innovation team must also have so-called soft skills that will allow them to take the field among colleagues and create the right mix that will lead to success.

Furthermore, the team must be constant and able to withstand failures and learn from them especially when it has to carry out frontier initiatives. Attention please, however, the latter cannot be the only innovation initiatives, short-term initiatives will also need to be taken to improve current processes and thus create the foundations.

The short-term results lead people to convince themselves of the benefits that can be brought about by change and will ensure business continuity.

Once the team has been created, a controllable and measurable process must be immediately studied and introduced, personally I really like the AGILE method as it allows you to have rapid iterations which in turn allow you to evaluate the result and possibly correct it avoiding noticing errors when it is too late.

The same structured method should be used in the management of ideas as it is important to be able to recognize and know how to evaluate when an idea can be transformed into an added value without being immediately taken by easy enthusiasm but putting yourself in the shoes of possible customers and trying to understand what advantages.

A clear road mad Top Down must then be defined, usually in companies we start from the Bottom up which is not completely wrong but must be seen as a tool of the corporate strategy and must not be the corporate strategy otherwise you get lost in a sea of confusing initiatives that create chaos and increase costs.

All this over time will lead the innovation generated to create more value than the traditional by shifting, according to some theories, the earnings from a 70% traditional business, 20% immediate innovation, 10% frontier innovation to 70% frontier innovation, 20% immediate innovation, 10% traditional business.

What has been said is not a perfect recipe, every company has its own story, in reality it can also happen that a company due to managerial errors has started to a point of no return for which there is a lack of the necessary funds to invest and change things, in fact, innovation should be done when the company is successful and there are the resources to do so, thus securing the future.

Sorry did you get a headache?

Well yes my dear all this from today can no longer be seen only as a Buzz word or a fashion talk show, but as a serious thing that must be carried out by professionals who can really change the fortunes by transforming the sad story of Kodak into a so good story like Apple.

As you can see, the most important thing is that behind the innovation process and ideas there are people, who are not just numbers but resources without which there would be no business and above all no future, but everything must be managed in a way ordered.

Thank you for your time.

Flavio