Digital Transformation and Innovation

Peter Jarrett
Jul 23, 2019 · 5 min read

Digital transformation and innovation are often talked about together, and yet I’ve been reflecting lately on the interplay of the two terms.

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Photo by Tyler Casey on Unsplash

Digital transformation invokes visions ranging from entire industries being disrupted and organisations rethinking their fundamental business model or place in the value chain, to companies lifting and shifting their analog processes to a digital format, to the more mundane of using it as a buzzword to sell the latest tool, widget or agile process.

Innovation, which is a much broader term, is the search for the new — it is less about efficiency and optimisation and more about the creative process of research, experimentation and discovery of unique offerings or approaches which offer a “blue ocean” — an uncontested market which allows for a new competitive advantage.

When we start to apply these two terms to existing businesses, the water gets murkier. A business transformation, digital or otherwise, usually entails a large scale program of change which is enterprise-wide and touches all parts of the business. In the past, this form of change has often gone through the phases of assessing current state, determining desired future state based on external and internal factors, developing and executing something like Lewin’s Change Management Model of unfreeze — change — refreeze to operations, to realign to the new strategy.

The challenge with this broad-based approach is that in today’s volatile, uncertain, complex and ambiguous (VUCA) world, these types of transformative change are often difficult to apply and sustain as the environment continues to shift, and more to the point, one never gets to “refreeze” systems to the new normal as you track to an ever-moving target.

Enter Innovation

Herein lies the rub — neither the broad business digital transformation approach nor the independent innovation cell is necessarily wrong. If anything, these days it is not an “either-or” but rather an “and”.

If you are to keep up with the pace of change to match speed with your customers and the evolving market, you will need to keep the experimentation up at the same time as progressing with your digital transformation. This enables you to continue to track toward that elusive future state and maintain alignment with your surrounding ecosystem.

And this is the crux of what to consider from a strategy and execution point of view: digital transformation is not a one-off event to change state — e.g. from analog to digital — it is about ongoing iterations or evolutionary change, with constant injections of new ideas and re-orientation based on the results of your innovative exploration, experimentation and useful discoveries.

Constant iteration needs to happen due to the pace of change in external environments. Your team as consumers are exposed daily to new ideas that you will want to harness and experiment with. Innovation is the fuel of the next evolution — how you are set up to capture ideas, test and introduce into your digital ecosystem and the pace that you can cycle through them and incorporate the useful ones will determine how fast you can evolve. The challenge is that with the increasing pace of change which some, such as Singularity University, consider exponential, is that you need to tighten and speed up these feedback loops to synchronise with your environment.

Failure to do so — as an organisation or a nation — means that you will fall behind faster, more attuned and responsive actors. For example, more needs to be done within Australia to maintain our innovative culture as a society and position within the Global Innovation Index relative to other nations if we are to hold a competitive position in the years to come.

I’ve written in the past around my views on developing the digital culture of a business, and how it requires the right mindset, toolset, behaviour and feedback loops to support this ongoing change.

I’m starting to think that the term digital transformation and innovation should really be called digital evolution, which emerges through continual experimentation and implementation of new discoveries.

Digital Evolution

I think this is also perhaps why the discussion on both digital transformation and innovation are sometimes so esoteric and nebulous: digital transformation is often unique to an organisation given its position in the value chain, and the disruption arising from creative innovation discoveries is often unknown and unknowable on the quest until stumbled upon. It is why I am somewhat leery of formulaic frameworks that will guide your digital transformation — if it were truly that simple, we wouldn’t need the courage and fortitude of our digital leaders to make meaningful progress toward an uncertain future.

Further reading:

How do you think that digital transformation and innovation relate? Do you like the concept of digital evolution? What challenges do you face in keeping up with your change journey? What’s your quest? I’d love to hear from you!

Written by Peter Jarrett, Head of Operations at Business Aspect on Medium on 20 July 2019. You can follow me on LinkedIn, Twitter or Quora.

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Peter Jarrett

Written by

Head of Operations @BusinessAspect. I help business leaders drive growth with IT Strategy, Operations, Digital Transformation, Emerging Technology & Innovation.

The Startup

Medium's largest active publication, followed by +771K people. Follow to join our community.

Peter Jarrett

Written by

Head of Operations @BusinessAspect. I help business leaders drive growth with IT Strategy, Operations, Digital Transformation, Emerging Technology & Innovation.

The Startup

Medium's largest active publication, followed by +771K people. Follow to join our community.

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