Digital Innovation: Redefining Digital Transformation
For many, digital transformation falls into the category of “terms often used but challenging to define.” It conjures up images of artificial intelligence, the cloud, and automation across the professional spectrum. Although these are manifestations of the larger wave of digital transformation, their implementation has fallen short for many businesses that believed they were the key to a new, digital paradigm. For CEOs and COOs looking to enhance their business practices by taking advantage of digital transformation, the means to get there can seem daunting. It could involve hiring technology professionals and consultants, disbanding legacy systems, and changing the workforce’s attitude toward new digital tools.
Because of this, a lot of the momentum behind digital transformation fell short of the radical changes people expected. This disappointment is often the result of failing to invest in substantial innovation while expecting minor digital changes to result in fundamental change. To address the frustration and lack of momentum around digital transformation, the word itself needs to be redefined. Digital innovation more closely encapsulates the buy-in that is necessary for companies looking to transform their operating procedures to reflect the increasingly digital world. In this article, we address some of digital transformation’s pitfalls as well as solutions for a more effective digital innovation campaign.
The major pitfall of digital transformation has been its use as a euphemism for modernization. That is, keeping the same basic business structure but migrating applications to the cloud or building a mobile app. Although these efforts can yield some benefits, they, by themselves, are not going to radically drive growth or redefine the business’s position in the market. This focus on modernization instead of digital innovation has business leaders looking back over years of work and asking where their investments went and why the results weren’t what they were expecting.
Another pitfall many companies have fallen into while chasing digital transformation is the carousel of brainstorming, planning, and debating without the ability or will to start with a blank sheet of paper. Understandably, deciding how to re-frame a business around digitization is challenging and not to be taken lightly. It requires an honest evaluation of previous failures and the removal of existing physical and mental barriers established by the tenured, historical way of doing business. To break out of these walls, companies must find internal or external sources of ideas and fresh thinking that can offer unlimited imagination. Starting from a blank slate allows a company to be truly innovative instead of simply building upon established practices and not substantially advancing.
To accomplish the degree of change “digital transformation” implies, businesses must invest in both gradual improvements and daring ideas that could change the core of the business. The term “digital transformation” no longer captures the degree to which businesses should be investing in the technologies of tomorrow if they want to stay on the bleeding edge of innovation. Digital innovation gets to the heart of how businesses should be evaluating their processes and looking for new investments and fresh ideas. Instead of asking, “How can I automate more of my routine business practices?” Or, “Should I start selling my products via multiple online retailers?,” companies from every domain should examine how their products and services will grow with evolving customer demands and competing business models. This includes asking questions such as, “How do I see my customers interacting with my product five to ten years down the line?” Or, “How can I expand my product offerings to fit myriad technologies and platforms” as well as, “Is there something about my product that is fundamentally un-dynamic that needs to be changed in order to keep up?” These are meaningful questions of innovation, not simply transformation. Getting to the answers will depend on the institutional will of each individual company and will most certainly appear differently in every context. Asking these types of questions, however, will result in the types changes that digital transformation failed to deliver.
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