March 18, 2019
The ROI of Transformative Innovation
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Transformative innovation occurs when an organization pushes suppliers beyond current product offerings to evolve their capabilities in new and novel ways. Innovation is not about buying a product or service. Innovation is about defining the business outcomes necessary to become an industry leader. Once an organization defines the business outcomes, it can identify the specific capabilities, technologies and vendors to deliver those outcomes.
The rationale for this is simple, really. Anyone can research leading providers and existing products, and make a choice. Whatever solution this process yields likely will be short-lived, as the competition can adopt the same solution easily. Also, it is likely that an existing or "canned" solution will not meet business expectations.
Astute innovators understand this. Instead, they seek to determine what value internal and external stakeholders require because only by exceeding stakeholder expectations, can an organization become an industry leader. Then, they search for providers with the capabilities and willingness to address those needs. Thus, the critical inquiry centers on the supplier’s capabilities, rather than its products, and this, by the way, requires suppliers, themselves, to innovate. Finally, the staging of proofs of concept and/or pilot programs can confirm the capabilities of the “short list” of vendors.
Many organizations settle for cursory research of a few popular vendors, or, worse yet, they move directly to procurement from the perceived leading industry vendor without clear and convincing proof of capabilities or thoughtful consideration of business needs. The result is a business outcome the vendor controls, not what the stakeholders need necessarily.
The lesson in all of this for innovation leaders is to approach the sourcing and selection of emerging technology with the right mindset. Neither expect, nor be bound by, existing products and services. Look for providers with the ability and desire to develop solutions your organization needs. Take the time to “do this right.” Educate your internal user partners/clients about the ROI of transformative innovation.
Each industry is unique, and each organization is unique. There is no “one size fits all” in transformative innovation. An organization that directs providers to develop a solution based on criteria it defines not only leads transformation internally, but it drives transformation in vendor organizations with which it does business.
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