The digital innovation evangelist Scott Bales expounds on disruption, and the key to creating long lasting innovative products
Disruption and innovation are more than just buzzwords in the tech world; they are the fuel that will power the engine of the modern economy.
In only a few years, the digital tsunami has laid waste to traditional businesses such as bookstores, entertainment retail companies, electronic stores, fashion retail, and any other sectors that were too slow to catch up. Even the great stalwarts of our economy such as banks are waking up to a reality of a world where conglomerates will have to work with startups or risk alienating a significant user base, missing out a huge revenue stream as a result.
e27 speaks to Scott Bales, Managing Director of boutique advisory firm Innovation Labs Asia, passionate evangelist of digital innovation and author of Innovation Wars, to break down the core elements of digital innovation and disruption in the 21st century and how companies can successfully integrate these models to grow their businesses.
Here are the edited excerpts:
1. As a self-described “digital warrior” and MD of Innovation Labs Asia, what are you doing to help spread the gospel of innovation?
Over the past decade I have been very fortunate to be given some of the most amazing opportunities. Everything from building a mobile payments venture in Cambodia, a digital bank in the US, a technology company in South Africa, and more recently some of the most amazing innovation platforms in the corporate world.
I’ve found myself in a niche between startups and the corporate world where I both actively investment and advise in promising startups, while working with corporate to help develop their abilities to transform into innovative organisations.
The magic really happens when one corporate client is seeking a new approach to a problem that one of the startups is solving. This gives me that chance to design a bridge between the two that’s mutually beneficial, and unlocks new growth potential for both. Over the past couple of years, increased client demand has seen me work in the insurance and healthcare space.
2. What are the key sectors successfully making the shift to be more innovative?
It is still early days, hence there hasn’t been any Earth-shattering outputs from the transition. But there are some promising steps forward in the space of healthcare, pharmaceutical and banking, where large traditional companies are running ‘parallel’ teams that run more like a startup than a 50-year-old company. These teams are developing new operating models, new approaches to technology and most importantly challenging the organisation to advance.
3. Which sectors are hardest to disrupt?
The two hardest are banking and insurance, which is also where the majority of my clients come from.
Their challenge is they’ve spent billions of dollars, and decades trying to ‘centralise’ and ‘optimise’ their industry, which has left them disconnected from the market.
The two toughest barriers for these two industries to overcome are the role of the Bank Manager and the role of the Insurance Agent. Twenty years ago both of these were highly trusted, empowered relationship builders. Today they are disempowered through centralisation and globalisation.
This means banks and insurance companies aren’t engaged in the most important factor in innovation, ‘empathy’.
The best innovators on the planet develop deep empathy for their market, and co-create new solutions and value propositions with their customer. Unless the bridge of empathy between decisions makers and customers can be rebuilt in banks and insurance companies, they face challenging times in the coming decade.
4. Is a collaborative or a competitive environment more conducive for disruption? And why?
The hottest place for innovation right now is the intersection of industries. So I would have to say that collaboration is critical.
Take the trends in healthcare and health & life insurance for instance. Here we have two industries that are commercially addicted to the diagnose, treat and pay model of their value chain. But health & life insurance companies are more profitable if you live a longer, healthier life. So why wait until you are sick to intervene? Now we are seeing some exciting startups and projects in preventative health management that help consumers avoid health risks.
Also Read: How to create working innovation initiatives
Early detection, prevention and risk reduction for the biggest killers like diabetes, cancer, heart disease, plus the chronic care illnesses of Dementia, Alzheimer’s, and Parkinson’s, means the consumer gains from a longer fuller life, while the insurance company can proactively manage the risk of the insurance pool. So expect more innovation through collaboration at the intersections of industry.
5. What are the key indicators of successful innovation?
It’s the four core tenants of innovative companies, and it’s covered in my latest book, Innovation Wars.
1. Context is about setting up the correct foundations; organisation structure, financial structure, incentive models, office space, all must be in place so that an innovative team can thrive. Far too many companies simply try to ‘bolt-on’ innovation, but find themselves disappointed with weak outputs, or loss of talent. Without the right ‘Context’ innovation can never thrive. It’s kind of like ensuring you chose the right location, climate, soil before starting a Vineyard.
2. Culture is where an organisation finds a way to embrace and encourage a culture of curiosity, learning through failure, asking why, experimentation and empathy. Only with these as actively culture core will people have the courage and ecosystem to support innovative and creating activities. In the farm analogy, Culture is making sure the soil is fertilised, irrigation in place, and the soil ploughed, before you plant the first seed.
3. Capability, we’ve all read about Design Thinking, Customer Development, Lean Startup, Agile, Innovation Accounting. These are your seeds, water, tools, etcetera that when used correctly become the frameworks, and tools that help ideas come to life.
4. Collaboration, a key for what I call value chain innovation. Where two complementary organisations realise that core competency 1 + core competency 2, equals much more that 1 +1. This is what I was referring to earlier when I mentioned innovation at the intersection of industries. Far too many companies get the mix and sequence these wrong. Resulting in disappointment, loss of talent, and road blocks.
If you want to figure out which innovation programmes aren’t working, all you need to do is look at the flow of talent. Talented innovators won’t stick around just for a salary.
6. You’ve been involved in dozens of new corporate accelerators and innovation labs in Singapore, but are they bearing fruits? How do you separate the wheat from the chaff?
This is a tough reality, and a core reason behind why I wrote Innovation Wars.
I would suggest that greater than 75 per cent of innovation programmes we have read about in the press are not only not producing fruit, but are also frustrating their organisations.
Innovation is always talked up, it’s a moon shot, or a unicorn factory. But when faced with the realities of a large organisation, without the right preparation and grooming, it’s destined to deliver disappointment, frustration, and internal competitive behavior.
For most orgnisations innovation is a longer term transformation journey, that’s unlikely to bear fruit early. It’s why I use the analogy of starting a vineyard when talking through the four Cs. Most vineyards don’t produce a descent product until year five. It’s naïve to think that an innovation programme will in its first twelve months.
‘Scott’s latest book, Innovation Wars, is available for pre-order right now through Singapore based Author Crowdfunding platform, Publishizer.
Want to hear more of what Scott Bales has to say about innovation? Don’t forget to secure your tickets to Echelon Asia Summit 2016 this June 15-16 at Singapore EXPO! e27 fans only: Enjoy an extra 20% off with promo code *SUMMIT20*!
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