Digital Innovation is the next growth area, not just for the pure play digital companies like Google or Facebook. Also traditional companies are driving innovation in their area. Some are already well ahead of the game; others are making good strides.
As part of the Ambassadors of Innovation event on Digital Transformation we surveyed 25 innovation leaders in the Netherlands. While over 83% see Digital Innovation as one of the top 3 or even the top strategic priority only 24% are very or somewhat satisfied with the return on investment up to now. (Figure 1).
Figure 1: Overall, satisfaction with the ROI on Digital Innovation up to now
This lack of satisfaction is not because of the lack of data. It is because it is hard to create perceived customer value for which they want to pay.
This is not surprising as only half of the respondents states that their company has a clear and well communicated strategy on Digital Innovation (figure 2). It all starts with knowing where you want to go to, making sure that all of the company understands that and works towards that same goal. One in every two does not yet have a clear and communicated Digital Innovation strategy. Same goes for capabilities, meaning people and resources that are capable of creating digital innovations. When specifically looking at required digital technologies the majority (63%) of respondents is in the ‘somewhat’ stage, with only 29% agreeing that they do have the required technologies available. Processes, culture and mindset trail further behind, as does governance. Last on the list is metrics and incentives. Companies have not yet put these in place to pull the organization towards the digital innovation goals they have set in their strategies.
So indeed it is not surprising that only one in four of companies are satisfied with their Return on Investment.
Figure 2: Implementation of Digital aspects in the company
How can you benefit from this information? Figure 2 in itself is a suitable checklist and planning tool. The following elements may be worthwhile considering.
- Develop and communicate your Digital Innovation strategy. This is not just a top-down, but also bottom up and sideways (across the silos), companywide.
- Adapt processes, organization and governance towards digital propositions. Start using different processes for developing propositions, e.g., Lean start-up, ventures, etc.
- Build or source Digital Innovation capabilities and technologies. Decide what you need to have available inside the company and what you should buy or partner for. Also use the fact that you bring in new capabilities to bring in fresh insights and mindset that address the next bullet.
- Address mindset and culture through aligning metrics and incentives. Set metrics and targets that promote not only a wider view on innovation but incorporate Digital Innovation specifically.
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