Digital transformation has become the predominant mandate for corporate leaders in the wake of the global pandemic. Efforts have accelerated to a breakneck pace in the last two months as timelines have been drastically compressed. This urgent push will almost certainly create new value. But as often happens when we go all-in on something, we risk going overboard with the bold assumption that “everything should be digitized” – and that can actually hurt innovation efforts.
I am an advocate for digital technologies that improve outcomes and drive performance. They have made us much better in many ways. However, there are some corporate functions that should beware of betting too heavily on digitization. Automation through technology has its advantages, but it also has the potential to dehumanize some aspects of the work of business and erode competitive advantages.
Corporate innovation is one area that might be most at risk of becoming over-digitized. Innovation leaders are typically fascinated with new technologies; as a result, they can underemphasize the “people” component of making innovation work. Any innovation leader will tell you that it is not as easy as just having the right process and tools to drive results. People must be bought in and stay bought in, and many important aspects of innovation – creativity, inspiration, ideas – come from the people working on it.
This might feel like an odd point for me to make, as someone who leads a digital technology company for innovation management. I have spent nearly a decade working with leaders in over a dozen industries and I have seen firsthand that the technology cannot effectively replace all of the inputs for making innovation work.
Not sure you agree with me? Let's use some examples of this dynamic.
Data-Informed vs. Data-Driven
Data matters in every decision that we make. But data is only an input to good decisions – it’s not the entire answer. Business leaders, especially those in senior management, will resonate with the reality that they are often forced to make decisions with conflicting data. People therefore must intuit implications, make disparate connections, manage diverse viewpoints, and understand nuance informed by data, but not driven by it. Technology should support and enhance this process, but not attempt to replace it.
Collaboration vs. Cooperation
Organizations do not always behave rationally. You know why? Because they have people in them. Opportunities for new business ideas might look fantastic on paper (the AI picked it!), but still struggle to obtain and retain support from the company. For an innovation program to work, the commitment within the organization needs to be more than cooperation with the innovation vision. It needs more than just “the computer said so”. This work requires relational collaboration – mutual support, shared resources, aligned strategies, and so on.
Focus vs. Freedom
Technology gives us access to more information than we ever thought possible. That’s a double-edged sword, because at times the sheer volume of possibilities can create confusion and delay. We become obsessed with all the things we could do instead of executing the things we should do, which results in a lot of talk and no walk. The most innovative companies have made deliberate commitments to focus on specific areas of investment, and excluded everything else.
Story vs. Statistics
Innovation is a narrative that depicts where the company is, where it could go, and how we might get there. Statistics and numerical charts are helpful context, but ultimately lack the punch to create real commitment. People at all levels of the organization need to see themselves as a character in the plot – an essential part of the journey. While digital technology has amazing potential to amplify a story, the arc still needs to be written by inspired leaders that will know what will resonate with their particular culture.
The Role of Digital Technology in Innovation
People are still –and will always be –the secret sauce for new breakthroughs. At Forest, our goal is not to fully digitize innovation; rather, our goal is to instrument innovation. We’re equipping leaders with the tools they need to achieve aspirational innovation outcomes.
Great digital products make people better, and that’s the point. From an innovation standpoint, that “best of both worlds” mentality can be seen in the ways we’re aligning leaders with data-informed evaluation methods, providing ways for people of all skill sets to collaborate on new ideas, illuminating areas of strategic focus, and inviting employees to play an important part of the story in a transparent way.