Innovation is centered on how knowledge is gained and understood; agility is how quickly and effectively that knowledge is applied.
The three words—transformation, agility and innovation—seem to be linked together in some sort of mutually dependent relationship. When one of these words is applied to a company, there is great likelihood that the company will also be described by the remaining two.
The following faux headlines illustrate my point:
“ . . . Acme has assumed market leadership through its digital transformation. It was accomplished through its remarkable agility and innovative management . . .”
“ . . . the innovations just keep coming at WidgetMaster. Their amazing market agility is the product of a successful and thorough digital transformation . . .”
What do agility and innovation have to do with digital transformation?
We hear or read about things like this on a daily basis. The question is, what exactly do agility and innovation have to do with digital transformation?
I spent some time perusing articles about these two qualities and how companies might benefit from them. I expected to find a lot of articles steeped in market-speak and linked to all manner of quadrant graphics. My search results did not let me down; there were plenty of both.
But the fact is, there were not too many pieces out there that deliver a strong case for dependency between these two most desirable qualities. Those that did accomplish this provide interesting reading.
Mike Baddeley makes a compelling case that both “agility and innovation are key priorities for any business” in a July 2018 piece he authored on ITProPortal.
A McKinsey piece titled “Why Agility Pays,” from its December 2015 quarterly, talks about how agile organizations seem to embrace innovation and learning by combining speed with stability.
Innovation Has Little in Common with Agility
While innovation and agility are certainly not mutually exclusive, they are still two very different things. It is important to understand this because there is, too often, an assumption that accomplishing one will also ensure the presence of the other.
Karine Sabatier provides an excellent summation of this in her February 2018 article, “Being Innovative and Being Agile Are Different.” She neatly sums up this assertion with two succinct definitions: “Innovating is creating change. Being agile is adapting to change.”
I find that observation to be quite profound.
Consider those two definitions, and then consider how many people you know who are wired to excel at both? Not too many folks spring to mind, right?
People who obsess over creating a new world are focused toward the future. Innovation is about creating a new future.
People who obsess over agility are focused on effectively reacting to the present or recent past. Their focus is very much on the here and now.
All of this is not meant to imply that one or the other is bad or good, nor are these qualities useless for companies embarking on a path toward digital transformation. In fact, they can be quite useful when applied properly.
Innovation in Digital Transformation
Innovating is not buying all the technology available and funding massive implementation projects, and it is not simply understanding strengths, weaknesses, the market and customer needs. It is all about quickly gaining that knowledge and effectively acting on it in a way that is unique, new and efficacious.
Innovation in digital transformation is the ability to repeatedly apply the perfect technology to the specific problem you are trying to solve. This is the same if you are fixing your HR group or your manufacturing or sales operation. There is no one size fits all in digital transformation.
Each problem is unique, and usually each solution will be unique as well. When the solution involves technology, it is all about choosing the right technology, not about how much or how expensive that technology might be
Innovation does not start with knowing what technology you need; it starts with understanding the process you are trying to improve. That understanding must include an accurate appraisal of the shortcomings, weaknesses and failures of the process along with understanding its strengths. Above all, it includes an understanding of the intended purpose of the process.
Throwing CRM at your marketing data is not a solution if the problem with your marketing operation is bad customer data. CRM will help companies utilize data effectively, but it will not make inaccurate, out-of-date or poorly maintained data suddenly become the proverbial analytical goldmine.
The same is true for other technological solutions, such as ERP or CPQ. The technology itself can accomplish good things only if the user has applied the solution properly.
Agility in Digital Transformation
Agility is not borne of faster close rates or reduced product development cycles. Agility is the ability to quickly translate knowledge gained into positive action.
Agility is knowing what direction your competition is moving in, where the market is going and what your customers will want next month and next year.
In the implementation of digital solutions, agility is evidenced in the ability to quickly observe, understand and react to changes in market, supply chain or other external influences.
Knowing in advance that political instability in the country you source some essential raw material from will escalate within a short time to make that critical material unavailable is an example of how agility is enabled.
The agile reaction is to have redundant sources, alternate designs or other mitigating measures ready to deploy as soon as they are needed.
In the selling world, understanding what goes into an effective sales cycle in terms of customer pains, product knowledge and domain expertise is the active ingredient in maintaining an agile sales force.
A Configure-Price-Quote Solution Enables Knowledge to be Shared
A CPQ solution may offer a digitally enhanced path to sharing that understanding by offering a way of delivering that knowledge to new sales reps or when rolling out new products.
Innovation is centered on how knowledge is gained and understood; agility is how quickly and effectively that knowledge is applied.
Agility and innovation stand on their own both individually and together as desirable qualities and objectives for achieving organizational maturity and growth. They smooth the path toward a digitally enhanced operation and a transformed enterprise.
