Innovation in practice is the critical factor for successful transformation. Many business executives know they want to transform their business, but they don’t know the steps to take. So, how can business executives develop business and innovation strategies that can scale in the age of the industry 4.0?
As the costs of technology decrease and markets mature, innovative companies that combine the power of understanding emerging business trends and 4IR technologies are driving industrial transformation on a large scale in the lifecycle of a product, process, or even an entire industry.
In the industry 4.0, collaboration is the name of game
Historically, companies were almost solely focused on developing their own in-house technology solutions within customer management, R&D, manufacturing and finance analytics. Even though some of the approaches within the areas are still relevant, companies need to rethink how the develop and design ecosystems for collaborations and technology solutions.
In a world of increasingly specialized high-tech companies, a single company typically doesn’t have the resources, insights and competencies to develop new solutions from start to finish. New ways of collaboration and technologies redefine the ways business is conducted and profits are realized. To achieve successful innovation, companies need to rely on other actors in their innovation ecosystem. Executives are expected to be more open-minded. The winners are able to develop ideas, processes or products in less time and with less money. It’s not just keeping up with trends and technologies that are complicated. It’s keeping up with the right trends and technologies in a strong ‘ecosystem for innovation’. Collaboration is notoriously complicated, because its raises many new challenges. But strong ecosystems have undoubtedly resulted in more diversified and innovative companies. They have also created potentially more resilient and stronger companies due to their numerous opportunities to combine insights and know-how, and to create value in new ways.
The most impactful innovations occur in unexpected areas of the ecosystem
Innovation can occur in any part of the ecosystem. I think the biggest hurdle is ensuring that the ‘ecosystem for innovation’ is inclusive of everyone in that ecosystem. In today’s high-tech world, the right know-how at the right time is critical to your successful business transformation and innovation. Strategic partnerships or cross-business-unit collaborations are a key enabler of innovation. An ecosystem for innovation can be a catalyst for the growth and innovation of a business. The successful exploitation of new insights is crucial to a company being able to innovate its processes, increase its efficiency, and bring new or improved products or services to market, implement a new degree of automation, transform business models and enhance customer experience.
The rapid pace of innovation requires companies to understand and leverage an ever-changing pool of business models and emerging technologies.
Innovation – it’s not rocket science. But innovative companies and scientists work together and win!
Successful innovation in the industry 4.0 requires a greater focus on fundamental sciences and the emerging technologies they support. There are several ways for business executives to create the right set of conditions and encourage a collaborative mindset. Building a ecosystem for innovation based on strategic partnerships means recognizing that the company doesn’t have the insights and skills to innovate and compete in the industry 4.0. Here I share some initial reflections from my work as a member of innovation boards with the ambition of prompting foresight for strategic innovation. Here are four areas of attention when companies want to foster an innovation ecosystem.
1. DISCOVER - Identify emerging trends, transformations and technologies
The innovation efforts won’t work if you don’t identify the new capabilities you need to discover the challenges and opportunities in the industry 4.0. Capabilities lie at the heart a company’s ability to innovate, so it’s hardly a surprise that discoveries in the complex world of the industry 4.0 require diversity and collaboration across capabilities.
For a company to build an ecosystem for innovation, it’s essential that the top management are obsessed with securing that the capabilities to discover the top trends and technologies with the biggest impact on the business are present in the company, and encouraging collaborations across the internal and external stakeholders.
In other words: discovering opportunities, securing the right capabilities and encouraging collaborations, are three crucial sets of actions for successful innovation.
Do the company understand the business’s current position and capabilities?
2. CAPTURE – Trading insights, ideas and know-how
Identify and create new sources of insights and value in new ways.
The value of trading scientific insights, ideas and know-how in an ecosystem is incredible. The new insights can lead companies to capture ideas and build solutions for fixing the biggest issues the company or industry face.
Implementing the ‘ecosystem thinking’ helps to unlock a rich, scaling spectrum of innovation outcomes.
What do leaders in the company need to do to help the organisation to capture and trade new insights?
What concrete activities will affect the success of the innovation efforts?
3. FRAMEWORK – Structure is the difference between failure and success
In order to succeed, a company need to elaborate and map the innovative objectives through a deep dive into the trends, technologies and transformation opportunities in the industry. Filtering trends and technologies is an essential part of the successful innovation. If a company don’t have a framework or prioritization of the “discoveries”, the company risk to be failing in their efforts.
Does the framework:
Give overall direction and overview? The framework should point out the overall path for the company’s innovation strategy.
Force the company to change the approach to collaboration and business development? Which of the insights, technologies and trends are most important to the success of tomorrow’s business?
4. REFINE – Unleashing the potential of the ecosystem for innovation
The innovation initiatives that need focus should be supported by the right incentives within the company. The organisation and the right external stakeholders need to work together in order to discover the opportunities for the company at the specific area and how to build new products, services or smarter processes. Executives should talk with stakeholders, including employees, customers, industry experts, start-ups and scientists, to challenge themselves about the company’s future.
In other words, ask yourself how an innovation ecosystem can lead your company to new business adventures and new value streams.
How are the company capitalizing on external innovation?
How do the company choose their organizational design to innovate better in collaboration with new business partners?
How do the business adapt to the speed of technology change?
How do you make those partnerships actually happen, to commercialize them for success?
If a company want to increase innovation, the company need to make sure they have the right people with the right skills. Many companies, especially SMEs, don’t have the innovation competencies today. An innovation board with internal and external members can be helpful for SMEs to think differently and approach business opportunities through a new lens.
If the company don’t have the innovation competencies today, it doesn’t mean that you can’t develop the internal resources for the future. Innovative companies across industries are trying to reorganize to move into new ways to do business.
The innovation board, as a business development body, should focus on the company’s innovation strategy and strategic goals. An effective innovation board has a clear understanding of its roles, goals and responsibilities. The innovation board has four areas of focus: scouting technologies, trends and transformations with an impact on the industry, increase innovation through new collaborations and ecosystem development, refining the initiatives and strategy. As the company move into a more collaborative culture, the organisation needs to simplify the ways people work together. Collaboration tools and platforms can support the innovation board’s needs for accelerate decision-making and streamline the innovation portfolio and time to market.
The innovation board must continually balance short- and long-term innovation objectives. The innovation board shall hold minimum four board meetings a year with a maximum gap of 90 days between two board meetings.
There is no one-size-fits-all innovation strategy, it will always be a process of failure and tests, and it will take time to design, develop and maintain an innovation ecosystem. But companies can’t afford not to be driven by curiosity and a collaborative mindset.
Innovation isn’t a static thing – it’s a journey. Enjoy your journey!