Are digital innovation practices transferable?

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By Rod van Onselen

I was recently asked by an ex-colleague whether the digital innovation practices my teams have used could be applied in other industries.

The question was aimed at the transferability of innovation practices into this person’s own business. But it got me thinking – can large corporates, public sector, and not-for-profit organisations successfully apply the sorts of innovation practices routinely used in leading digital pure-plays?

Pre-conditions for successful innovation:

The reality is that step-change innovation is innate in very few organisations, mainly because most organisations do not have the pre-conditions necessary to drive an innovation focus and culture.

In my experience, a combination of the following elements is usually present in organisations that are delivering genuine, step-change innovation.

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  • Leadership or founders who are committed to innovation being a central driver of organisational success and sustainability;
  • Rapid market growth which generates significant spoils for successful innovators; and/or
  • Intense competitive or regulatory pressures which necessitate innovation to survive and thrive.

In instances where all three pre-conditions exist, innovation will often be ingrained into the fabric of industry players. Conversely, where these factors do not exist (like in many of Australia’s monopoly industries), innovation will typically be lacking or at best merely incremental.

Digital businesses such as mine, are a great example of where all pre-conditions exist. The same is true of many digital pure-plays who rely on innovation to succeed in the face of low barriers to entry to attractive markets.

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So, when a drive to innovate exists, what separates successful innovators from the also-rans? And can these practices be transferred into more traditional companies and institutions?

The starting point is to acknowledge that there’s no single recipe for establishing innovation as a core part of an organisation’s DNA.

Having said that, what follows is a snapshot of what I’ve seen work, which I hope provides a compass that helps point those interested in establishing sustainable innovation practices on the right path.

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Practices of successful innovators:

The best innovators foster innovation through both top-down and bottom-up practices.

Top-down practices are simply the factors that leadership teams have most control over such as setting an organisation’s strategic priorities; investment funding; and rewards/incentives. These factors are critical, as they provide the fuel to mandate, motivate and support innovation.

Bottom-up practices are those that support innovation within teams across an organisation. Instilling a culture of bottom-up innovation is actually far more challenging to embed in an organisation. However, there are a number of relatively simple practices that work well when trying to nurture bottom-up innovation:

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  1. Hire for innovation. Hiring for creativity, entrepreneurialism, and a questioning mind will help plant seeds around the organisation from which innovative ideas will sprout. Strategic hiring of these types of candidates into positions of influence will go a long way towards fostering innovation.
  2. Encourage team members to ask questions. “Why”, “how can we”, and “what would it take” are tremendously powerful questions to incorporate into discussions and planning. They’re even more powerful when used to challenge accepted truths and assumptions about how things are done.
  3. Brainstorm. Regular brainstorming is a great way to identify innovation opportunities in organisations. There are plenty of simple brainstorming techniques that can be used in team sessions to elicit ideas. I believe that regular, well-facilitated brainstorming with follow-through on ideas generated is massively under-utilised in most organisations.
  4. Create space for “outside-in” thinking. Encouraging team members to take some time out to attend a conference, observe customers, or participate in a “hack day” will help open their eyes and minds to other possibilities. These time-outs can also be a great lead-into brainstorming sessions to get people into the right frame of mind.
  5. Experiment. Embedding experimental processes and tools to test new ideas and ways of doing things can be incredibly powerful. Most digital organisations worth their salt have established A/B and multi-variate testing practices supported by tools such as Optimisely that enable low cost testing of ideas with customers. Beyond this, there’s huge value to be had from using preto-typing (worth looking it up if not familiar) and prototyping practices to test ideas in their very early stages, whether or not an organisation has a heavy digital focus.

So, back to my original question – are these sorts of innovation practices often seen in leading digital players transferable?

I believe they absolutely are, as sustainable innovation is mainly rooted in leadership and processes that encourage and nurture innovation, which overtime can shift culture.

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Rod van Onselen is a senior executive at one of Australia’s largest and most successful e-commerce businesses. He’s one of Australia’s leading digital practioners, who regularly advises on digital strategy and delivery. His experience spans founding a category leading, venture capital backed digital business; strategy and implementation consulting; and leading B2C strategy and data analytics at one of Australia’s big banks. Rod is regularly requested to speak at industry conferences to share his thought leadership. Rod can be reached at LinkedIn