June 4, 2020

On the Air

Digital transformation: 3 ways to make room for experimentation

By David. F . Carr
Published on The Enterprisers Project
digital transformation stall

By definition, digital transformation means using digital technologies to do business differently and to create new digitally enabled products. That can only happen if the organization is willing to try new things, including many that won’t pan out. Room for experimentation should be part of your digital strategy and digital platform.

Sounds great in theory, but how do you make experiments happen?

[ Culture change is the hardest part of digital transformation. Get the digital transformation eBook: Teaching an elephant to dance. ]

1. Find time and money for experimentation

To innovate, you must experiment. The catch: Where do you find the time and where do you find the budget for all these experiments?Creating possibilities for truly disruptive digital transformation innovations requires taking more risk.

“I don’t think you will find them,” laughs Martin Mocker, one of the co-authors of Designed for Digital from MIT Press. That’s a little like hoping to find money to pay the rent hidden in your couch cushions. If you want to make room for experimentation, you will have to budget and staff and plan for it. “You’ve got to make a decision to actually do that,” adds Mocker, a professor of information systems at ESB Business School in Germany and a research affiliate of the MIT Sloan School of Management.

Innovations aimed at improving an organization’s operational excellence are a little easier to work into the budget and justify with traditional ROI calculations, he says. However, creating possibilities for truly disruptive and transformative innovation requires taking more risk.

“Having separate budgets is probably more helpful,” Mocker notes. “You need to be able to say, ‘I can afford that amount of money, and I’m not expecting to get that money back.” This is investing for a payoff in the long run, not within the budget year.

[ Is your team tiring of transformation work? Read also: How to beat digital transformation fatigue. ] 

2. Organize wisely: The trouble with innovation teams

Once you have budget, where do you spend it? Be careful how you organize and structure for experimentation, experts say. Making innovation the exclusive responsibility of an innovation labs team can be a mistake if the message people get is that they are not empowered to innovate unless they are on that team.An innovation labs team “becomes the ivory tower, becomes divisive, becomes an isolated thing.” 

“It becomes the ivory tower, becomes divisive, becomes an isolated thing,” says Charles Araujo, an independent analyst and founder of The Institute for Digital Transformation. Besides discouraging innovation from elsewhere, a disconnected innovation team can be ineffective at bringing products to market.

Click here to read the full Article


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