Innovation governance sounds like an oxymoron. Innovation is supposed to be unstructured and barrier-less flow of creative juices. So, what is this governance of innovation business?
Today, businesses, organisations and ecosystems are embracing innovation as being key to sustaining competitive advantage. But every investment in innovation makes business leaders search for methods behind the madness.
The problem is finding templates and structures for quick-wins by adopting strategies around innovation which could bring differentiated business value. The innovative urge is always rooted in the ambition of exponential gratification for the stakeholders of the innovator, beyond and ahead of routine solutions. However, this value proposition needs to be sustained through deployment at scale and speed to ensure that the excitement does not wear off and innovation doesn’t become mere “novelty”. This requires governance.
Superior Customer Experiences (CX) and User Interfaces (UI) rule every business decision, much more than the product per se. Therefore, business innovation must work in an ecosystem that is robust, follows a laid-down governance model to ensure business values of CX and UI and justifies the investment in innovation. For this, any standard model—suitably modified—can be adopted. For example, the five E framework of Envision, Engage, Evolve, Evaluate and Execution could be one. Organisations like IBM and Oracle follow highly-structured waterfall methods in which ideas are serially taken through the five Es. Others, like SBI, large and required to innovate quickly to stay competitive, use a more agile framework. They simultaneously or parallely work on different pieces like Vision, Structure, Resources, Development, Communication and Managing Risk of multiple projects. The aim of innovation governance is to help graduation of an idea to the stature of business innovation.
As customers are asking for fast-tracked products, services and experiences, speedier innovation is a must. To begin with, the CIO or the innovation champion has to shift focus away from cost and operations, and think outside the box to establish the present value of the long-term and short-term returns of an innovation. One governance element in innovation is the quick choice of one or a bundle from the available technologies. Confusion around seemingly equivalent and equipotential technologies like mobile, big data insights, point solutions and end-to-end solutions should not delay innovation projects. A blend is often the solution, and different blends yield similar results. In case of large organisations like SBI, multiple technologies working in multiple ecosystems with multiple collaborations have been found to be the best milieu for enduring future-readiness of innovation.
Innovation governance often is mired in distractions and hoopla. For example, customer-site visits, hackathons and vendor-days generate a lot of short-term excitement. However, even after many rounds of these, nothing is seen on the ground justifying the money spent—like the recent publicity around block-chain and robotics, announcements are made around POCs and “Workable Products” coming from hackathons and innovation off-sites, but that is all that there is. The other common activities are to setup labs, incubators and accelerators or acquiring of a fintech or start-up to commercialise innovation. Most of these languish due to lack of business engagement, validation and funding. In SBI, putting a process to map hackathon results into business value and mentorship, sponsorship of these processes by senior
C-level executives have helped the innovation journeys move forward.
One critical element of governance in any sphere is speed. Businesses are always looking for shortening time to market. Therefore, without speed, innovation will be bereft of business value. In design of innovation, speed elements like agile, iterative testing and simultaneous crowd sourcing must be integrated. One such example is Henry@Nestle, where an end-to-end platform is provided for speedy generation to sun setting of ideas.
Innovation may fail to get business-value traction if it does not take the customer’s life-cycle and journeys into consideration. The rule is that instead of quantity and number of innovations in a company, more focus on boundaries around innovation are required. For example, a home loan’s journey in a bank is entirely different from a home loan product in the traditional banking world. The delta between journey and product is probably the trigger for and the value of innovation.
To sum up, targeting and bringing focus on areas to innovate is the beginning of innovation governance. Ideation, incubation and commercialisation, agililty and collaboration are the body and soul of governing innovation to create value. Tools for measuring outcome must be embedded into the governance framework so that new innovation replaces the old, and failed innovation does not perpetuate itself through optical illusions and sound bites.
Mrutunjay Mahapatra, Deputy Managing Director and CIO, SBI