In the corner suite, digital is now in vogue. During discussions with clients and through my daily readings, business leaders are lining up to spearhead innovation initiatives to become a more digital business. The need is critical to maintain competitiveness, and many programs are backed with a passionate pursuit. Others, however, appear to lack strategic substance and planning, and are destined to die on the vine as the status quo eventually takes hold.
Inspiring action and results requires more than a declaration at an employee townhall, during a media interview or on a quarterly analyst call. A true drive for digital innovation requires that leadership commits to shifting mindsets, rerouting priorities and inspiring teams to thrive in the possible with a clear communication of “Why.”
Digital innovation is not a destination unto itself, but rather a constant journey in which new or different business results are expected. Aside from adopting management-by-cliché, here are my top five potential pitfalls that effective executive teams must dodge to be successful.
1) The fire isn’t hot enough
If there’s no underlying sense of urgency supported by a motivating business case, inertia is inevitable. Whether accelerating the rate of continual improvements or seeking to digitally disrupt an industry, each initiative needs a blazing fire thereunder to get to the next milestone. Once attained, each milestone needs to be celebrated and not used as an excuse to pause and admire. We’ve seen many firms struggle with this. Digital innovation is a continuous evolution, not a one-off project that ends when the latest app is in place or the innovation lab has been built. There must be a constant drive to move forward.
This is compounded by the dichotomy of disruption – the harbinger of disruption in your market today is likely already there, you just can’t see it yet. It is challenging for a firm to react to a market force that, while not evident today, is inevitable.
2) Funding flounders
Often times, the funding necessary to see a project through to completion is difficult, if not impossible, to gauge in the planning phase. Teams must exert significant up-front effort in scenario planning to ensure all avenues are considered and the budget is in accordance. Forecasting and hedging for the unexpected is vital, as few things damage morale and stall great projects more than a money pool running dry.
In the recent MIT/Capgemini co-authored book “Leading Digital,” the authors present a useful exercise to help executive teams determine whether they have the right funding model for their transformation. The exercise asks that you rate your agreement with the following statements:
1. Our business cases and key performance indicators are linked to our roadmap.
2. We balance our portfolio of digital investments between long-term capability building, short-term return on investment, and experiments.
3. We have a diversified funding model.
High scores indicate your digital funding process is strong. Rate in the middle, and you should revisit the plan to ensure your portfolio, funding and business case are aligned. If you score low, I’d recommend you rework your investment and funding case.
3) Finding the comfortable way
Teams can freeze in fear and uncertainty as they ponder the feasibility of attaining challenge goals or adopting new solutions. To assuage these feelings, temptations rise to cobble together existing technologies in new ways. Disruptive technologies and approaches might require technical prowess that you likely don’t (currently) have. It’s critical to ensure time to assimilate new solutions and address technical issues head-on rather than cut corners to take the comfortable way around.
4) Fuzzy roles and responsibilities
Teams function best when everyone knows what other people are handling. Establishing specific roles, governance, touch points, and workflows, especially for handling irregularities, goes a long way to minimize frustrations and ensure a smooth running team. A group’s leadership is responsible for encouraging proactive communication, ensuring a smooth cascade and fostering collaboration across well-defined roles.
5) Lack of clear vision
Simon Sinek’s famed TEDx talk, “How Great Leaders Inspire Action,” focuses on one key point: start with (the reason) why. It’s easy to get caught up with other reasons for embracing a new solution. More obvious questions are what and how, as teams seek what they hope to accomplish and how they expect to do so. A clear vision, however, begins by answering the far more intricate question of why. If a leader can explain why he or she is embracing a new concept, persuading a team to believe in the cause becomes far easier. The more the “why” is rooted in a new or different business outcome the better. This can take the form of a defensive strategy, market maker or brand evolution, as a few example categories.
Digital innovation is anything but easy and requires a long-term perspective to get it right. For leaders seeking to be a catalyst for change, be sure to spend as much time preparing for the journey as anything else. There’s no need to brush up on clichés or metaphors. The up-front work isn’t glamorous, but it will enable the pace of change to hasten and the results to be extraordinary.