Managing Innovation in the Digital World

Managing Innovation in the Digital World presents an integrated approach to innovating successfully in our increasingly digital world. Digital refers to the processing, transfer and storage and using of information by electronic means and the broad opportunity for transformation this creates. It is the catalyst, raw material and glue which will enable the creation of better and more sustainable organizations and industries.

This book highlights how the unit of competition and performance is shifting from the organization to the ecosystem and discusses the evolution of the Open Innovation 2.0 paradigm whereby multiple stakeholders collaborate and combine to deliver new propositions based on shared vision and shared values. Packed with rich case studies from both private and public sector organizations such as Intel, Mastercard, Anam and Ireland's Health Service, the book not only shares new digital innovation theory but also elucidates this with practical tools and lessons. It discusses the critical importance of an open, generative culture which supports experimentation and risk and introduces an Innovation Capability Maturity Framework which allows organizations to assess their innovation capability and then systematically identify actions to improve it.

With its focus on value as the core metric by which all innovation in measured, this is an essential book for all professionals who, using digital technologies, seek to create better products and services, better industries and a better and more sustainable world.

1 Introduction 1

The Importance of Innovation 2 Innovation's Virtuous Circle 3

Three Types of Innovation 4 Radical Innovation 4

Incremental Innovation 5 Innovation by Reapplication 5

Innovation Need Not be Wholescale Invention 5 Innovation is Not Just About Products and Services 7

Investment in Innovation 7

Value Creation Opportunities 9

Open Innovation and the Drive for Best End Value 10 Innovation Shifts in Business Models 12

IT Innovation: A Two-Part Process 12 Creation 12

Adoption and Diffusion 13 Innovation as a Lateral Process 16

Barriers to Innovation 17

In This Book ... 17 S

Summary 19

1. Business Value Management 21

The Importance of a Common Language 22 The Cost of Miscommunication 23 Business Value Dials 25

Business Value and IT Efficiency 27 Building Innovation Business Cases 29

IT Innovation Business Cases 29

Portfolio Management 31

Post-Implementation Review 32

Summary 32

2. IT Innovation 33

The Special Case of IT Innovation 34

The Six Parallel Vectors of IT Innovation 35 Vision 36

From Vision to Prototype 38 Business Case 40

Business Process Change 42 Organizational Change 42 Customer or Societal Change 43

Summary 47

3. Systemic Innovation 49

Managing Systemic Innovation 50 Systemic Innovation 52

Capability Maturity Framework for Systemic Innovation 54 Ad Hoc 54

IT Innovation CMF Basic Level of Maturity 55

IT Innovation CMF Intermediate Level of Maturity 55 IT Innovation CMF Advanced Level of Maturity 58 IT Innovation CMF Optimizing Level of Maturity 60

Innovation Excellence and Operations Excellence 64 Systemic Innovation Imperatives 64

Summary 65

1. Innovation Capability 67

IT Innovation Project Stages 68 Ideate 69

Brainstorming 69

Lateral Thinking 69

TRIZ 71

Ethnographic Research 71

Prototype 73

Concept Cars 73

Usage Models 74

User-Centered Design 74

Refine 75

Outsource 76

Open Source 76 Software as a Service 76 Open Innovation 77

Diffuse 77

Web 2.0 Internet 77

Mashups 79

Crowd Sourcing 79

Copy-Exactly 80

Other Diffusion Techniques 80 Summary 81

2. Innovation Assessment 83

Intel's Innovation Self-Assessment Process 84 Assessment Teams 84

The Assessment Process 84

The Self-Assessment Framework 85

Section 1. Management Commitment 86

Section 2. Business Responsibility 88

Section 3. Innovation Competency 89

Section 4. Enterprise Values 90

Section 5. Innovation Support 92

Section 6. Impact of Innovation 92 Scoring the Self Assessment 93 Developing an Action Plan 96 Moving to the Next Maturity Level 98

Management Commitment 99

Business Responsibility 101

Innovation Competency 103

Enterprise Values 105

Innovation Support 106 Impact of IT Innovation 108

The Importance of Innovation Assessment 110 Summary 111

3. Innovation Pipeline Management 113

The IT Innovation Pipeline 114 Pipeline Stages 115 Pipeline Value Paths 116

Managing the IT Innovation Pipeline 117 Step 1: Design the Pipeline 118

Step 2: Capture Innovation Ideas 120

Step 3: Create and Populate a Registration System 121 Step 4: Choose a Vetting Procedure 122

Step 5: Manage the Innovation Project Portfolio 123 Step 6: Establish and Use Value Realization Metrics 125

Improving Yield for IT Innovations 126 Tactics for Improving Yield 127 Sample Results 127

Intel Innovation Index 128 Summary 129

4. Diffusion of IT Innovation 131

Diffusion Fundamentals: How Innovations are Adopted 132

Categories of Adopters 132 The Chasm 133

Chasm Two 134

The S-curve Perspective 135 Metcalfe's Law 137 Gladwell's Tipping Point 138 Friedman's Flat World 139

Diffusion Fundamentals: Lessons Learned 140 Diffusion of IT Innovation 141

Assets, Methods, Skillsets 142

Develop Infrastructure 142

Prepare Technical Support 144 Marketing Innovations 145

One Final Ingredient for Success 147 Summary 147

5. Launching Systemic IT Innovation 149

Gaining Management Commitment 150 Create and Communicate a Vision 150 Develop an Innovation Strategy 151 Measure Business Value 152

Developing Innovation Capabilities 153 Training 153

Reinforcing Innovation 154

Innovation Centers 155 Creation and Diffusion 156 Intel's Experience 158

Innovation Enablers and Inhibitors 158 Systemic Innovation 159

Culture and Innovation 160

Summary 160

Stay in touch 161

Appendix A Case Studies in IT Innovation 163

Wireless Westminster, Part 1 164

Vision 164

The Prototype 165

The Business Case 167 Wireless Westminster, Part 2 169

Business Process Changes 169

Organizational Changes 170 Societal and Customer Changes 170 Vision Revisited 170

Epilogue 171

Innovative eSupport at Intel, Part 1 172 A Vision is Born 173

Formalizing the Effort 173 Calling for the Question 174

Innovative eSupport at Intel, Part 2 175

Appendix B Innovation Assessment Tools 179

Intel's Self-Assessment Tool 180

Section 1. Management Commitment 180

Section 2. Business Responsibility 182

Section 3. Innovation Competency 184

Section 4. Enterprise Values 185

Section 5. Innovation Support 189

Section 6. Impact of Innovation 190 Appraising Innovation Performance 191

References 193

Index 199

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