Rethinking the Corporation: The Digital Innovation Lifecycle Part 3

Rethinking the Corporation: The Digital Innovation Lifecycle Part 3

Throughout this blog series, we’ve been suggesting that the traditional departmental corporate form (i.e. sales, marketing, finance, ops, IT, etc.), universally applied, and virtually unchanged for over two centuries, is killing innovation in leading corporations around the world. From the way companies develop strategy, serve customers, and attract employees, to the way they create and manage work product, digital is driving the need for innovation.

In our first post, we noted that work itself is changing in three important ways: 1) the way work product is created, 2) how business issues are communicated and discussed, and 3) the way consensus is formed. We concluded by arguing in favor of a new framework for driving innovation, speed, and agility out of the organization–the Digital Innovation Lifecycle–as an alternative method for managing work in the organization

In our second post, we broke down the Digital Innovation Lifecycle into 3 major components:

  • Productivity and Collaboration (“PAC”) – Tools like Google’s G Suite make it possible for the heartbeat and brain power of the organization to become a single force, make the exchange of ideas frictionless, and have the power to move an organization to consensus rapidly.
  • Thinking and Planning (“TAP”) – The left hand side of the diagram, with its elements arranged like the 5-side of dice, captures how strategy, customer observation, and quantitative insight inform and reframe the process of solving business challenges.
  • Doing and Creating (“DAC”) – The baseball diamond of topics on the right of the Digital Innovation Lifecycle. In this loop, we integrate product management concepts with agility, experience design, and change management.

To compete, corporations must rethink the way they organize, fund, and execute. Because as digital products become more sophisticated, more analytical, and more social, the multidisciplinary skills required for creating them will increasingly run contrary to the way corporations manage work and solve problems.

In this post, we dive more deeply into the TAP part of the diagram. The TAP cycle has two separate loops: 1) the upside down triangle on the left reflects the idea that strategy guides user research and that the learning from user research often reframes strategy; while quantitative insight informs strategy and user research, and 2) quantitative insight is given context by environmental and sensor data and informed by location (the triangle on the right).

Strategy-Research-Insight Loop

Let’s begin with the strategy-research-insight loop on the right. The most overused word in the enterprise today is “strategy.” Everything is “strategic”. People are always pressed to put aside the concerns of the day to day in order to be “strategic”. But few, if any, can really articulate what it means to be strategic, or how strategy makes its way from the slide deck and the whiteboard into the hands of the customer–but doing just that (at light speed) is what digital innovation is all about.

For the purpose of this discussion, when we use the word “strategy”, we mean: the design of a set of actions the company can take in order to achieve a desired and measurable outcome. But how do we get from the amorphous desire for growth and improvement through change, to a plan that meets our definition of strategy?

Innovation can start with any of the three areas in the upside down triangle. Imagine the executive team at ABC Widgets Inc., a market leader in widgetry, is looking to make the leap to digital. The widgets they produce have sensors and can report operational info while the widget is performing in a customer setting.

The CEO announce her vision to lead the competition in making IoT a reality for ABC’s customers. A classic executive declaration meant to spur the team on to great things, a forward looking concept for sure, but also an amorphous desire for growth and improvement, not a strategy.

In the classic corporate model (the model we argued was obsolete in our first blog post), the development of a strategy would be divided into pieces by department. Marketing is assigned the task of designing a product, Engineering goes to the lab and figures out what we can actually get from a widget in operation, Ops defines how will service the customer, and IT figures out how we are going to glue it all together and deliver a product to the customer. This allocation of work ignores all of the interdependencies that are inherently a part of digital products. If this group was developing a strategy for bowling, then the path from “I want a strike” to a strategy (see our definition above) is rooted in the concept that group (engineering, marketing, ops, and IT) is responsible for knocking over one of the pins. Marketing hits the marketing pin, while engineering hits the engineering pin.

Addressing this same challenge using the Digital Innovation Lifecycle, that problem set is addressed holistically by a multidisciplinary team. A team of engineers, marketing, sales, ops, and IT people are organized with the goal of delivering the whole product (reference Geoffery Moore). This team might start with user research:

  • Observing the customer’s use of the product in the field
  • Workshopping ideas to bring IoT based value into the widget market
  • Understanding customer’s use of competitive products

With this data, the team might reframe the concept or advance the strategy based on use cases learned from the field.

Alternatively, this same team might instead look at the kinds of information that ABC Widgets can stream from the field and identify statistics, tunings, or other adjustments to the widgets that can improve efficiency. In effect, using quantitative observation to find new value for the product. With these insights in hand, a visit to the user research task might inspire customers to confirm the value, or reshape the use case to better meet emerging needs.

In any case, this multidisciplinary team is looping through the upside down strategy-research-insight loop. To continue our bowling analogy from above, this team is developing a strategy to throw a strike, rather than individual plans to score pin by pin.

With a holistic view of the problem set, the right quantitative insight, and direct customer/user research supporting your business case, the steps to implementation become clear. The definition of the minimum viable product (MVP) and the related product roadmap begin to emerge and that amorphous desire for growth and innovation has a focus and a set of steps that can be executed and measured–a strategy.

Conclusion

The Digital Innovation Lifecycle is a new way of thinking about solving business problems, generating growth, and innovating. It requires that the business, technology, and design of the services and solutions corporations provide customers, employees, and vendors combine all of the disciplines of the corporation in new and innovative ways. Even organizations that make old style industrial products, increasingly have to think of the customer experience in both atoms and bits. The TAP loop of the Digital Innovation Lifecycle emphasizes holistic, iterative, multidisciplinary planning. When corporations break beyond their traditional silos, speed and innovation result.

In our next post we will continue the discussion of the TAP cycle. The focus will shift to the ways in which quantitative insight is increasingly creating new product opportunities and opportunities for growth. Most enterprises are new to the power of data, data science, and machine learning techniques. However, these techniques will increasingly drive innovation, and so enterprises must master them. The Digital Innovation Lifecycle seamlessly integrates these concepts into the development of business strategy.

By | 2017-06-15T14:49:08+00:00 May 1, 2017|Categories: Fusion Blog, Innovation Posts|Tags: , , , |

About the Author:

Brian Farrar
Brian Farrar is a partner and founder of the firm with over 25 years of consulting, technology, and investment banking experience. Prior to Maven Wave, Farrar spent 7 years in technology investment banking. Mr. Farrar has completed merger and capital raising transactions in excess of $2 billion. Farrar served as President/COO of Xpedior Incorporated (NASDAQ: XPDR) a technology consultancy with over $200 million in revenues and 1600 consultants. Farrar also served as President and CEO of Metamor Technologies, a systems integration and software consulting firm with revenues in excess of $80 million. Farrar’s consulting work has achieved recognition by USA Today, The Wall Street Journal, Good Morning America, CIO, and Wired magazine. Farrar is a published author with 6 books on technology related topics distributed in 6 languages worldwide.