Digitising Innovation Management: Leveraging Social Technologies and AI to address hierarchy, bureaucracy and cognitive bias
New on digital disruption, digital economy, platform economy and digital transformation is ubiquitous in the media today, much more than ever before. There is plenty of hype and debate on how Blockchain technologies, algorithms, Artificial Intelligence (AI) and the Internet of Things (IoT) would transform industries and create new growth opportunities. In Southeast Asia, the digital wave is dominated by technology start-ups such as Lazada, Traveloka, Tokopedia, Grab and Go-jek, where the latter two have morphed from ride-hailing companies to ‘super apps’ that offer everything from food, transport, delivery, payment and insurance services in a single experience. Other than providing income opportunities and delivering value to millions of customers, they were able to come this far by fully embracing the digital and platform economy, coupled with their customers’ readiness and ecosystem infrastructure and support. They derive their competitive edge from customer data, algorithms, network of partners, brand and innovation. The fact that business media brand, Fast Company, crowned Grab as the second most innovative company in the world in 2019 is a testament to this. Founded in 2012, Grab has established their presence in 500 cities across 8 countries in Southeast Asia, including Malaysia, Singapore, Indonesia, Thailand, Vietnam, Cambodia, Philippines and Myanmar. While much of the spotlight appears to be on the arena of start-ups and purely digital companies, many large corporates and traditional industries are also harnessing the benefits of digital operating models.
There are many approaches and techniques to innovation, such as design thinking, lean start-up, business model canvas and stage gate. Regardless of the approach, every innovation effort should focus on the following four key outcomes:
Generating these outcomes in large organisations is different from doing it in start-ups. Other than the involvement range of functions and stakeholders with a company’s strategic direction and risk appetite, a recent survey highlighted the key obstacles for innovation are the lack of trust and empowerment, and lack of clear direction from management. These barriers stem from the human factors, relating to bureaucracy, silos and cognitive biases. Bureaucracy refers to the complex and multi-layered systems and processes within an organisation. Although these are in place to maintain uniformity and control within an organisation, it fuels power distance, leading to an authority gap and decision making delays. Business unit silos present themselves in conflicting agendas, limited leadership, lack of collaboration and an enhanced overconfidence gap. On top of that, cognitive biases are inevitable, where as individuals, we are unable to process all information objectively and resort to mental shortcuts when making decisions.
The convergence between digital transformation and innovation management thus presents an opportunity to revolutionise what is still largely managed in a traditional manner: through emails, instant messages, spreadsheets, presentations, post-its, and an endless schedule of meetings. Digitising the innovation endeavour through the use of platforms provides for safe storage in the cloud, increased efficiency, reduced operational costs, and eases data analysis. Additionally, a digital platform provides scalability, structure, and repeatability for the innovation process. This allows organisations to carefully plan, manage and monitor their innovation efforts in real time whilst tracking the process and aligning it with intended goals and objectives. More importantly, digital platforms can help overcome the many barriers to innovation stated earlier, whilst encouraging collaboration. An example of a successful internal collaboration can be found at the Kuala Lumpur office of Nestle, the multinational food and beverage company. In 2016, the company held its inaugural Innovation Awards, aimed at promoting idea generation amongst its employees. The results were momentous- 6,000 participating employees generated 50,000 fresh ideas, which in turn translated into a 10% increase in sales revenue in that same year. Digitising collaboration has made innovation continuous, relentless and fast.
As we move towards a digital business paradigm, machine and human decision-making increasingly coalesce. Blending technology-enabled insights with a thorough understanding of human judgement, reasoning, and choice will allow organisations to create and sustain a competitive edge in this increasingly complex world. The crucial step is not the technology itself, but the current digital behaviour of employees and management that need to embrace the digital and platform economy.
In conclusion, the digitisation of innovation management allows organisations to spend less time managing innovation and more time on things that really matter- like uncovering insights and opportunities, working on prototypes and pilots and most importantly, creating value for customers and the company.
More recently, our Innovation Strategist, Azim Pawanchik, spoke on this at ISPIM Bangkok March 2020. To learn more about what we do, visit alphacatalyst.com.
Introduction to the ISO 56000-series: Guiding standards for innovation management
The need for systematic innovation activities is increasing in all types of organisations. To guide these efforts, the first international standard for Innovation Management System (ISO 56002) has recently been published. A keynote presentation by Magnus Karlsson, the National expert & Chairman of SIS Swedish Institute for Standards and RISE Research Institutes of Sweden provides an overview of an innovation management system, the systems approach used, the principles and definitions behind it, how it can be implemented, and how it has been developed by ISO.
Based on McKinsey’s Global Innovation Survey 2010, 84% of global executives believe and say that innovation is extremely important, however, 94% are dissatisfied with their innovation performance. This addresses the urgent need to provide guidance for organisations, both private and public, by giving a common language and credible framework. With this in place, innovation capabilities in organisations can be boosted!
The ISO TC 279 started in 2013, coordinated by the French National Organisation for Standardisation (AFNOR) through an international collaborative effort- their first publications were in 2019, the ISO 56000-series:
For the ISO, innovation is defined as a new or changed entity, realising or redistributing value. Whilst an innovation management system is defined as a set of interrelated and interacting elements, aiming for the realisation of value. The ISO 56002 Innovation Management System is a guiding framework for top-management to lead and organise innovation efforts, it should be viewed as a check-list to enable systematic and systemic innovation activities; from developing and deploying innovation capabilities, evaluating performance to achieving intended outcomes. Other than using this as a guidance, organisations can also use the standards to evaluate their current ability to innovate. From the ISO, they focus on eight core innovation management principles:
With the ISO in place, organisations are able to harness the benefits from it. The organisation’s reputation and valuation are enhanced, making them more likely to stay relevant and competitive.
Global Body of Knowledge for Innovation Management Professionals
With that, innovation management is an emerging profession and a common job description and Body of Knowledge is taking shape. Innovation Management Professionals are responsible for or actively contributing to, leading and organising innovation efforts and increasing innovation capability in a company or an organisation. Creating this profession will not only increase the credibility, but it will also strengthen the profession, career advancement and employability & assurance.
For this profession (ideally from different divisions/departments to have different views), the main roles would be:
To be certified, an individual would need to i) have at least 3 years of relevant work; ii) performed at least three of the six responsibilities above; iii) at least 50% of their work is related to innovation management full-time. In preparation for the personal certification, programs based on the Body of Knowledge can be attended, delivered by an open market of certified training providers. For the personal certification program, the key principles are:
Get your organisation ready, by keeping up to date with what is currently happening! Visit these websites for more information:
Most Western countries perceive Asian markets as fascinating innovation hubs, where technologies are leapfrogged and where people are open to new digital innovations and transformations. But is it a reality for all Southeast Asian countries, and what is still necessary to get there? At the ISPIM Conference Bangkok 2020, a panel discussion was held with Theresa Mathawaphan (Deputy Executive Director of National Innovation Agency of Thailand), Dr. Suraya Sulaiman (Innovation Provocateur of Alpha Catalyst), Detlef Reis (Founding Director of Thinkergy) and James Engel (Chief Learning Architect of SEAC Thailand), chaired by Vincent Ribiere (Managing Director of Institute for Knowledge and Innovation Southeast Asia of Bangkok University). The panellists shared what they have personally experienced and saw as successful solutions to stimulate various forms of innovation in Southeast Asia. This is an excerpt from the conversation which took place.
Starting off the conversation, the speakers discussed the current state of innovation in the Southeast Asian region. Innovation within the Southeast Asia region varies dramatically in terms of maturity, and can be roughly divided into three categories: the advanced (Singapore), the intermediate (Malaysian-Thailand-Indonesia) and the emerging (Laos-Cambodia-Myanmar). Malaysia tended to produce more product or service-oriented innovations, while Singapore developed more tech innovation. Other than the variation between innovation focus; cultural diversity, regulations, availability of sandboxes/testbeds also played a part in distinguishing the level of innovation maturity.
Moving into examples of innovative companies emerging from the region, Grab and Go-jek was top most in mind. Grab, a technology company which started off offering ride-hailing transport services have now ventured into: online food delivery, insurance, courier service, prepaid and payment solutions, all on a single seamless platform. Suraya quoted Grab’s impeccable exponential growth- visible through their downloads, number of rides and revenue. Within 5 years, their app downloads increased from 600,000 to 100 million (across the Southeast Asia region). Their annual revenue grew from 0.5 billion to 2.3 billion within three years (as of 2019). She highlighted that the key success she’s observed was how they leverage on attributes associated with the exponential organisation (ExO) model such as leveraging assets, usage of algorithms and utilising staff-on-demand. Theresa brought up another similar Indonesian startup, Go-Jek. With a social mission to improve the welfare and livelihood of the Indonesian people, Go-Jek is an app for transportation, food delivery, logistics, payment and daily services. Due to their drive to fulfil their social mission, Go-Jek has been commended for their approach to localisation. Other panellists also highlighted other startups such as QQ, a Tencent’s eCommerce app which also integrates online social games, music, microblogging and group & voice chat software; and HotelManagement.Asia, a one-stop app for event management. Apart from being successful, these startups have two common themes between them: the identification and solving a specific issue or problem; and are platform providers by aggregating solutions and leveraging on assets.
Other than being different from one another, Southeast Asia also varies internationally. Detlef highlighted that the main difference between the European ecosystem and Asia’s is the culture. The culture has influenced the behaviour of employers and employees, and the interactions between them. Asian organisations tend to have higher levels of hierarchy, leading to a higher power distance. With Asians being collectivists rather than individualists, they are less verbal and outspoken with their thoughts and ideas. Hence, the main barrier towards innovation is the mindset. Taking into consideration the culture, they agreed that innovations worked best when it is initiated top-down, however, the top must also walk the talk rather than giving mere commands. Another barrier discussed was the retirement issue within the older generation workforce. As they approached their retirement age, the observation was that they tended to opt for less risky or tedious projects- possibly due to the high responsibility or energy investment needed. In addition, risk and failure acceptance was seen to be low overall, and is comparatively lower internationally. However, the panellists have all witnessed that there is a positive shift in the mindset- whereby employees are becoming more open to being involved with the organisation’s future and their innovative efforts- displaying a promising future. Due to the culture where Asian tend to not voice out their ideas and thoughts, interfaces such as digital tools and digital innovation management softwares can provide the avenue for expression and sharing of ideas. Through these platforms, organisations will be able to tap on the collective insights from their employees, as well as minimising the effect of hierarchy.
Due to the cultural difference, most innovation management system theories from the Western part of the world are less applicable to the Asian ecosystem. Coming from an innovation management consulting firm specialised in the Asian perspective, Dr Suraya discloses that the systems are well designed, however is not possible to use entirely, and would need to be adapted to suit the context and culture.
The discussion has highlighted the cultural difference, however, that may be Southeast Asia’s strongest point. With the positive mindset transition, the future for innovation is definitely promising and worth looking out for!