Perhaps the defining hallmark of the digital era is the way that sustained, rapid-fire innovation has become a prerequisite to survival. Developments in technology are allowing completely new business models to commercialise, gain critical mass, and render established businesses obsolete overnight.
This is hardly a secret. Companies are increasingly aware of the need to innovate fast and continuously to fend off the onslaught of digital disruption. Across the globe, companies are setting up accelerators, building innovation labs, running experimental proof of concepts (PoCs), and forging strategic partnerships in the hope that breakthrough innovations will allow them to outpace the competition in the race to survive. It is the job of the incumbent to find the innovation before the disruptor finds the scale.
Unfortunately, success stories from these initiatives are episodic. We see from speaking with many corporates this is not due to a failure to innovate, but rather due to a failure to effectively scale new innovations across the business. I have often seen companies create innovations with real potential, only to stagnate at the periphery of a company’s operating model instead of transitioning to its core. The innovation is not sufficiently embedded to deliver value at scale and its transformative value does not see fruition.
How do companies navigate the minefield of cross-enterprise scaling? Here are four points to consider when scaling your next disruption.
- Design for scale
Fundamentally you need to design for scale. A new proposition must genuinely solve a pain point in a way that no other product or service does and it must be intuitive in order to gain widespread adoption. Across our clients, we always find that the most effective way to guarantee value to users is through an accelerated, iterative design process known as rapid prototyping. In this approach, multidisciplinary teams are brought together to develop, refine and iterate a proposition based on ongoing user testing. A laser focus on addressing user pain points is emphasised, along with maintaining a ‘continual improvement’ mindset.
We have run many of these sprints, as we call them, with our clients. Most recently we deployed this process at a pan-African financial services group to produce a customer-centric pension and savings application. We started with a vision that was designed for scale with flexible saving options and end-to-end digital onboarding. Throughout the process, following the minimum viable product (MVP), we constantly added, tested and refined new features and functionality. Live testing was carried out with customers, and new iterations were released in a continual cycle of testing and learning. This test and learn approach accelerated the evolution of the product and ensured that the innovation had been vetted for its potential to achieve mass adoption.
- The right metrics and mindset
A user-centric proposition is crucial to encouraging adoption, but successful scaling requires time, resources and the right KPIs to measure success. This is dependent on a shift in the organisational mindset, from prioritising immediate profitability to emphasising long-term potential.
A user-centric proposition is crucial to encouraging adoption, but successful scaling requires time, resources and the right KPIs to measure success.
I once spoke to a CEO who defined innovation as a spectrum from optimisation (continuous improvement) through to disruptive (transformational). He warned that optimisation activities will always win against disruptive ones if the same metrics around volume and return on investment (RoI) are used. Therefore, there needs to be a shift in thinking around using a different set of metrics, such as rate of adoption, net promoter scores and depth of user engagement. If these KPIs indicate significant early promise, these innovations should be given the resources and funding required to move from incubation to scaling. But the funding should be done in stages, much the same way as a VC funds a startup in their portfolio – as the iteration proves value, ‘invest’ further.
Ultimately, a healthy balance must be struck between optimisation and transformational activities.
- Smart integration within the IT estate
While a shift in the organisational mindset and metrics can create space for an innovation to grow at scale, effective IT integration will provide the mechanism to deliver it. Unfortunately, IT integration is often the Achilles heel of scaled innovation. Many companies are currently sitting on a creaking patchwork of different legacy systems, cobbled together over the years which are unable to interface effectively with new datasets and technologies.
Modernising legacy systems is one option, but many companies will not have the luxury nor appetite to discard them, as they’re likely to require multi-million pound, multi-year transformation. They can however, devise workarounds to modernise certain elements of the IT landscape.
This approach worked particularly well for our African financial services client when integrating the savings product into the IT estate. Our approach was to provide the strategic architecture to host the application, and then integrate this within the client’s legacy systems, using secure API’s with governed access to legacy datasets. This allowed the client to scale a product with very few limitations whilst avoiding the expense and disruption of a ‘rip and replace’ overhaul.
“Innovation scaling projects are, by their very nature, speculative ventures into unchartered territory.”
Sometimes the inherent constraints of legacy systems can necessitate building out a new IT landscape to unlock the true commercial potential of an innovation. This was evidenced by the success of a new technology stack built by one of our clients to provide innovative, travel-related financial products to their customer base. The decision to build an entirely new cloud computing environment allowed the client to dynamically scale new products, and balance workload and capacity according to customer demand.
- Disciplined but dynamic implementation
IT integration will enable user-delivery at scale, but companies must implement the change with a disciplined yet dynamic approach.
Much like other transformational projects, scaling an innovation will require the usual activities of tracking and monitoring, risk and dependencies analysis, ongoing communication and a change campaign depending on complexity. It requires multi-disciplinary teams working as one, involvement of resources across the business, and a central scaling project management office (PMO) with proper governance and mandate to ensure delivery.
A key distinction between ‘regular’ projects, and innovation scaling projects, is the level of uncertainty faced by the latter. Consequently, a level of agility is required in its implementation. Innovation scaling projects are, by their very nature, speculative ventures into unchartered territory. Unknowns abound, unforeseen obstacles will no doubt arise. Therefore, the project leadership must be able to react dynamically, redeploying resources and redefining pathways to success. They will direct the teams to work at speed, with a commitment to progress over perfection, and a laser focus on the customer or user.
In our digitally disruptive era, first to scale has eclipsed first to market. To keep up, companies need to start scaling those innovations. They need to design for scale, use a different set of KPIs, integrate IT smartly and use a disciplined but flexible implementation approach.
This is not to say that companies should take their eyes off the ball when it comes to innovation, as continuous innovation is still a must, but more emphasis and effort should now be placed on transitioning those incubated PoCs into the core to reap the benefits of the innovation in the first place.