Rethinking the Corporation: The Digital Innovation Lifecycle Part 1

A year ago this October, we began a series of blog posts on the ways that technology is dissolving into every nook and cranny of our lives. We noted that the very nature of the work we do is changing; it’s less an assembly line, and more of a swarm. Marketing doesn’t just market, it points creativity and technology at marketing problems. In financial markets, the trader that once slugged out a spread in the pit has been replaced by a quant who can write software and understand complex trading algorithms. The Mad Men in Don Draper’s martini-soaked office on Madison Avenue are increasingly being replaced by clickstream quants.  

In that series, we were looking at the problem from the point of view of the CIO, and how a CIO should be thinking about Shadow IT and its long-term implications. However, in this Digital Innovation Lifecycle series we commence with this post and pull the lens back even further and begin the process of rethinking the way corporations are organized, how they solve problems, and how “digitalization” (this is not a word, but it should be and will be treated as such from here forward!) is changing the way we get things done.

We face the leading edge of a generational shift larger than the Baby Boom, and more technically sophisticated than any society in the history of humankind. Millennials account for roughly ⅓ of our population, will spend $200 billion annually, and $10 trillion over their lifetimes. They are rapidly taking control of leadership positions and will increasingly bend the world to their liking–and clearly, that world is digital, social, mobile, adaptive, and deeply rooted in the idea that technology progress is (as it has been throughout their lifetimes) virtually limitless. They are the first digital natives and they expect technology to adapt to them at home, at work, and at play. Make no mistake, as customers, as employees, and as consumers, we will all be doing it their way.  


“Their way” is digital. According to industry research firm Gartner Group, by 2020 the customer will manage 85% of its relationship with an enterprise having had no human interaction. That means the players in every market will have to produce compelling digital products to remain competitive. Winners and losers will be chosen based on the ability to create easy to use digital experiences that serve customers and employees where and when they choose. Unfortunately, as virtually any Dilbert cartoon would suggest, innovation, agility, and fluidity of action are not what the traditional large corporation is organized to do well.

What You Can Expect

In this blog series, we will argue 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. Through analysis and current day parable-style examples we’ll explore how the nature of “work” itself is changing. 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.

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.

We’ll propose instead the Digital Innovation Lifecycle as a new framework for driving innovation, speed, and agility out of the organization. In our conclusion, well provide a prescriptive set of steps to enable large corporations to reorganize and respond to the digitalization of our lives.

In this post, though, we set the stage for the series with a few ground rules and observations. The implications arising from increased digitalization have been covered from several different angles. We are not looking to retread ground already covered elsewhere.

First, there’s plenty of content focused on how to generate and nurture innovative ideas.  If you have trouble with that (not sure you are headed to a very innovative place, but…) try The Digital Innovation Playbook: Creating a Transformative Customer Experience, by Nicholas J. Webb for a somewhat interesting model for managing new ideas. In any event, this series will not focus on how to generate new ideas. In our view, the market is awash in new ideas anyway. Generating new ideas is not the problem in most large organizations; we’re going to assume you understand your market and have ideas.

Second, this series won’t offer business strategy advice. There’s no shortage of books and websites aimed at helping you adjust your business strategy. If you’re really hot to have your head in the clouds, try No Ordinary Disruption: The Four Global Forces Breaking All the Trends by Richard Dobbs et. al.  In our view, there’s so much talk about strategy in today’s large enterprise that even the word “strategy” itself no longer has meaning. Corporations are filled with people that call themselves “strategists” making “strategic” decisions, and yet they struggle in the core purpose of delivering innovative solutions. Instead, we’ll focus on rethinking the organization of work, and changing the way corporations fund, imagine, create, and deliver compelling digital experiences for customers and employees. In short, this series is all about making the shift to digital.

How Work and Collaboration is Changing

With the ground rules set, we begin with a discussion about what we mean when we say “the nature of work is changing.” If it isn’t the atomic core of the enterprise, certainly one of the primary elemental units of the corporation is the way teams of people work together. There are three critical ways that teamwork and collaboration, the way we work together, one individual to another, is changing.

#1 – How Work Product is Created

Cloud-based productivity and collaboration tools like G Suite, are based on a whole new paradigm, where there is only one copy of the work product that is accessible anywhere, anytime on any device. Team members can simultaneously edit, collaborate, and work together building plans, writing documents, and developing presentations. The soul of teamwork is the collaboration of ideas manifested as work product. The most innovative companies use these products to eliminate the coefficient of friction on ideas.

#2 – How Business Issues are Discussed

Another core feature of the corporate landscape is the meeting. Often team members are spread geographically, so they meet by Skype or Google Hangout. Even when everyone is in the same room, the meeting can be taking place on multiple layers. The conversation in the room being led by the moderator is, of course, the main event. But there’s a whole subculture of exchange going on via chat among those in the room as well as with collaborators spread wherever they are. When combined with #1 above, the team can have multiple conversations underway while the group creates a shared document. No more meet-discuss-resolve-separate-edit-reconvene-rinse-repeat.

#3 – The Way Consensus Forms

A third core feature of enterprise success is achieving consensus. Business is a team sport, and achieving team agreement is critical to maximizing progress. Social media has become an extremely powerful platform for achieving consensus. No corporate retreats, or long afternoons on the golf course with a Long Island Iced Tea (sigh). If organizers of the Arab Spring could move a population to overthrow a government with Twitter, surely enterprise can harness that same channel to improve customer service. Plus, no one has to get hurt!

These changes in the way we produce and collaborate to create work products are at the center of the Digital Innovation Lifecycle. The heartbeat and brain power of the organization can be marshaled together, the exchange ideas frictionless, and the power to move the organization to consensus rapidly are a key to the agility necessary to innovate.   

Stay tuned for future posts in this series, where we’ll explore the Digital Innovation Lifecycle framework to help the enterprise evolve to succeed in today’s digital world. We’ll also provide a set of steps for corporations to reorganize and respond to digitalization.

About the Author

Brian Farrar
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.
October 31st, 2016

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