Digital Transformation: Experimenting Your Way

Digital transformation and disruptive technologies are changing the way companies are thinking about innovation. As innovation has stepped out of the confines of the R&D department and everyone is expected to become innovative, creative and designers of their own expertise, there is definite need for tools how to approach this new situation.

Unsplash / Erol Ahmed

One great way to get going is to learn how to innovate through experimentation. Innovation requires hard work, literally but if made into a process, it gives us comfort as processes follow steps and rules, which makes it easier for majority of us to absorb and adopt the new innovation mindset. Make it your goal that everyone in your company learns the basics of innovation or experimentation process.

The following process by David L. Rogers is one good example and especially useful if you aim to innovate new products or services and business processes. Best of all, it is applicable to all levels of the organization, whether you are trying to foster innovation within your team, business unit or whole organization.

Step 1. Before an idea you must have a problem. The process begins by asking the question: “What is the problem you are trying to solve?” You should always try to take the viewpoint of your customer and defining your innovation in terms of the problem will force you to effectively do so. The objective of any innovation should be to provide more value to your customer – and by customer, I mean the wider term including any potential internal customers within your company.

“Start by asking the right question – What is the problem you are trying to solve?”

Step 2. In step two you need to set some limits to your innovation project. Keeping in mind that we are approaching the innovation process with an agile mindset and aiming for rapid, iterative feedback loops, the first constraint for your innovation project must be time. Three months should do it. You will also need to define some budgetary limits unless you have unlimited resources. Good way of handling innovation budget is to release the budget in sync with iteration loops, approving part of the new solution before giving more money to proceed with the idea. One critical thing to set is scope, or rather make visible what it is not that we are trying to achieve. It will help the design team in their thinking process.

Step 3. Design team composition matters – a lot. Good rule of thumb is that three people is minimum, five ideal and ten absolute maximum. Diversity is crucial, the team needs to bring different views and approaches into the process, representing for example IT, consumer behavior, service design, and marketing. Include people from different departments (oh yes, across the silos) and people with different competence levels. One thing that we forget all too often, is to change the dynamics of the innovation team often enough by changing the people on the team. One idea worth also trying is to have multiple small teams competing against each other during the ideation phase but with common objective, to find the best possible solution to the customer problem at hand.

Step 4. Before starting generating ideas like crazy, it is important you try to learn anything and everything you can about the problem. Study your customer and your customer’s customer, look beyond your own industry how others have responded to similar problems. By doing so you are also broadening your horizon for new ideas. It is really important, throughout the innovation process to highlight the problem – it is way too easy to fall in love with an idea that might lead you to lose focus of what it was you were actually trying to solve.

Step 5. You will also need more ideas than one. Preferably multiple viable ideas which can be then translated into prototypes or minimum viable products to gain feedback from customers. In the beginning of your innovation process you have most probably had to build a business case to secure funding from your company or investors. This is the phase where your business case and the assumptions you have made in it, will be tested.

With field tests, you need to validate your assumptions, both customer and business model assumptions. This step allows you to gain the insights how your customers will respond to your ideas, what are the things that are still missing, what would they be willing to pay for your idea but also how will you be able to deliver your solution, how to market and distribute your solution and what will it all cost?

Step 6. Validating your business case by field tests as early as possible will bring you faster to the point where you need to make a decision; to pursue with this endeavor or pivot. For non-startups this step is crucial, making the decision whether to continue with the idea or pull the plug if you have reached your time and budget limits. It is also worthwhile to keep in mind that it is impossible to understand the facts sitting at your office or reading a report. Inconvenient and probably the most valuable information will not surface that way.

“Nothing is as hard as killing a project or idea you have fallen in love with.”

Step 7. Regardless of the decision or the success of your innovation project, one thing from the experimentation process is still rarely used to its full benefit in companies – sharing your learnings and key findings from the process. It is really important that you take steps to document everything that you have learned but also to make sure that others can access that knowledge.

The things that didn’t work for your idea, might still provide valuable information for others. This is especially important when regarding failure. As experimentation is always intended as a learning experience, we need to be ready to capture and share also all of our “not so great successes” with others.

Innovation belongs to everyone. No matter what kind of production line or process you operate, think of it as alive. To be able to develop your production line, you need to develop your people. In my next blog post I will concentrate on the topic of failure and how we can learn to extract maximum value from it as well as cultivating “trying instead of overthinking” – method in our daily activities.