Proudly brought to you in association with S A Partners, a world-leading business transformation consultancy.
Welcome to episode 35 of the Enterprise Excellence Podcast. It is terrific to have Pascal Denis and Laurent Simon back for the second episode of this two-part series. Today we will be exploring the 2nd and third roadmap elements from their book Harnessing Digital Disruption. Let's get into the episode, Laurent and Pascal. Thank you for joining us again today.
A fun and bluesy start to this one! Pascal has another passion in life apart from business improvement, and it is music. Check out his international blues band here
Pascal quotes Albert King "Everybody wants to go to heaven, but nobody wants to die". It is so pertinent in this discussion about the digital innovation tree. Remember those juicy fruits at the top of the tree? We all want those juicy fruits, but we don't understand what it takes to get there.
Overview of the previous episode
Sustained transformation requires these three swimlanes to be run in parallel:
good soil - leadership development program, clarity of purpose and strategic logic
trunk - flex your innovation muscles and maintain it
fruits - protect core business and ignite new growth
It is essential to conduct these three swimlanes in parallel. If you don't, you won't have a sound basis for reaching the top. The foundation of digital literacy, leaders leading by example, enabling the right behaviours, enabling suitable investments to drive business is vital. How do you balance the contradictory objectives: protect core business while investing in building the future with a new business model? We dove into Swimlane 1 in episode 34, and if this is of interest to you, please listen to that here #34 Harnessing Digital Disruption with Pascal Dennis and Laurent Simon - part 1 of 2.
In this episode,we will deep dive into:
Swimlane #2 - Develop your Digital Innovation Capability, Your Innovation Muscle, Team of Capable Innovators
Swimlane #3 - Deploy Impactful Innovation Projects
The Four Battles to Fight and Win
We have provided many soundbites of this episode, and will make them available on our YouTube channel.
Swimlane #2 - Develop your Digital Innovation Capability
Pascal and Laurent believe that there should be 1 per 100 innovators in your organisation, and supporting them well is vital. This swimlane involves them installing a pragmatic, scalable innovation system at your company.
There are four elements to the innovation system that Pascal and Laurent's team installs.
The Pragmatic Innovators Framework
The Pragmatic Innovators Academy
The Pragmatic Innovators Network
2.1 The Pragmatic Innovators Framework
Pascal and Lauren will help you to establish a robust, scalable, teachable framework that gives shared language and logic.
Customer focus - desirability - design thinking - does the system WoW?
Rapid prototyping - feasibility - agile - does it work?
Scaling fast - viability - growth hacking - can we make money?
These three areas are enabled with lean experimentation - where the shift happens - making data-driven decisions. This framework becomes the curriculum in the academy.
2.2 The Pragmatic Innovators Academy
Pascal and Laurent will help you to teach your innovators through an academy. You will look at core skills, assess existing skills, identify gaps and learning solutions to close the gap and establish a certification system.
Specifically, the academy would teach innovators how to launch a new product. Imagine a hockey stick's shape. With any new launch, you want to ascend the hockey stick curve as quickly as possible. Unfortunately, 90% of innovation projects end just as they enter the turn.
Here is a selection of the ideas covered:
How to explore and ideate - your customer problem fit - do we understand our customers? Do we know their top 3 problems causing pain and that we can validate.
How to design and validate the problem-solution fit with prototypes design.
How to build and validate - build the minimum viable product.
How to launch: market the pilot, product-market fit - measure
How to scale - 10x growth - the marketing and sales experiments that will help find many sweet spots in global markets.
2.3 The Pragmatic Innovators Network
Pascal and Laurent will help you to organise your community of intrapreneurs and establish a regular communication rhythm. Ideally, seven communication channels are set up for the network. These could include boot camps, monthly teleconferences, 3 min video to share every significant milestone, and study or learning groups.
2.4 Focused Interventions
Finally, make it easy for your people to innovate - have a corporate innovation program - Pascal and Laurent name this the Innobox process. It is similar to the shark tank approach. Innovation cannot be measured well with conventional accounting, as all measures are zero. You will need innovation accounting. Innovation accounting applies to igniting new growth, which sits at the top of the tree. Regular accounting takes care of the core business.
Swimlane #3 - Deploy Impactful Innovation Projects
There are three levels in this system:
101 Build the right culture - enrich the soil
201 Build digital innovation capability - strengthen the trunk of the tree
301 and 302 Deliver successful innovation projects.
Level 101 - Build the right culture - enrich the soil of the tree
Provide digital executive forums, executive coaching, innovation challenges, Innobox program, shark tank, hackathon, MakerSpace, ShowCases, corporate accelerator setup. You are sewing the seeds of the essential digital offerings such as AI (pragmatic and ethical), Blockchain and Internet of Things.
Level 201 - Build digital innovation capability - strengthen the trunk of the tree
The pragmatic innovator's academy: applied training, coaching and certification program based on measurable value delivered.
The pragmatic innovator's network: a close-knit community focussed around a centre of excellence. Provide the network with regular exchanges of real-life cases, learnings and social support. Allow for seven communication channels: e.g. boot camps, monthly teleconferences, 3 min video presentation after each significant milestone, learning/study groups.
Internal collaboration: cross-functional teams of hackers, hipsters and hustlers, focused on the customer, working in innovation projects such as ShowCases and Learning Labs.
External collaboration: co-design products and services with customers, develop FinTech and InsurTech partnerships, cloud-based Data-Lab (AI), Hackathons (robust way to identify good talent) and other innovation competitions.
Pascal believes that their program is an end to end collaboration on steroids. Laurent responds with the ethical question of privacy and the necessity to make the AI algorithm easy to understand, rather than being BlackBox. These are both in the quotes section and here in soundbite form.
What do you get when you reach the top of the tree?
Level 301 and 302 - Deliver successful innovation projects.
Pascal and Laurent give case examples here.
Level 301 - Protecting core business with a better experience for customers
In retail banking, improving customer onboarding with AI, credit scoring, and a better experience with home loan approvals. They give further examples in business banking and insurance.
In manufacturing, one of their partners produces high-end equipment for radiology labs - protecting core business means focusing on improving the customer journey. The customer is the radiologist and the radiology technologist. They are creating flow for their customers rather than just supplying the equipment.
Level 302 - Igniting new growth, new business
For example, in banking, offering a new digital SME lending product based on mobile, and commercial pilots on cross border payments. And in insurance, new offerings around employee benefits, and a mobile App to identify coverage gaps.
Let's go back to the example relating to the manufacture of high-end medical equipment. Through Internet of Things and sensor technology, data from around the world is collected and assessed. New insights are gained, and improvements occur around the maintenance of equipment. A new business could be a global platform to connect people with problems with the problem-solvers to create value. See quote from Pascal about John Deere.
Collaboration (on steroids) is vital!
So, what stops organisations from achieving digital innovation?
The Four Battles to Fight and Win
Senior leaders are afraid of the technology, their lack of knowledge, and not being able to lead the journey. Their countermeasure is leadership training and mentorship, with executive forums, practical case studies, humour, and a light touch.
Middle and front line manager fear losing their jobs and being unable to upskill. They require practical tools, the Innovators framework, academy and network. They need mentorship and an easy way of innovating (the Innobox).
2. Removing Guesswork
"I have an idea and can prove whether it is a sound idea through a series of experiments". Removing guesswork is bringing your own Yoda along to verify your hypothesis. Experiments are encouraged in a controlled environment. If it doesn't work, there is no contamination to the rest of the working environment.
3. Scatter or Diffusion of Effort
Unclear aspiration, vision, winning logic, digital vulnerabilities mean we jump to conclusions without data. If your pipeline is overfilled, it will turn to cement. The countermeasure is the Transformation Lighthouse, with its visual display of vision, targets and actions and the regular rhythm of communication.
People can use visual programs in the Transformation Lighthouse, which will diffuse ignorance.
two-minute tip on harnessing digital disruption?
44:26min Laurent: For me, it would be focus on customer journey reform because that's the most effective, scalable and proven way to reform your company. So, if you gradually turn your projects into customer journey initiatives, then you're you're on the right track.
Pascal: And I would add, to sustain the transformation. Build the soil, the leadership, culture, vision, digital hypothesis and strategy. Build the muscles, you know, you're pragmatic innovators, all the things we've talked about today. And then, with respect to the fruit, define your innovation portfolio. Make sure everything fits together. They link to one another. They link to your overall aspiration, and then you've got a good chance at sustaining it.
Pascal, your turn this episode; what have you learned that you didn't know before? When you bring together the 3H's - hipsters, hackers and hustlers together and give them an innovation framework, process, good things will happen!
If people are keen to reach out to you and learn more, how can people get in touch with you?
Laurent's Profile: linkedin.com/in/laurentsimonhdd
Pascal's Profile: linkedin.com/in/pascaldennishdd
Website: digitalpathways.io (Company Website)
I appreciate all of your knowledge so far, Pascal and Laurent. I'm looking forward to all of your music coming out, Pascal. You two coming together has been the perfect match of the history and knowledge you have Pascal, and Laurent, the work you have done and your understanding of everything digital and finance. It's certainly created a fantastic book, and I am looking forward to all of your future work. Thank you both for helping us here and bringing your knowledge to the market.
There were two key takeaways for me from this episode:
Bring together Hipsters, Hackers and Hustlers.
The importance of the pragmatic innovator's network.
With key takeaway one, Pascal and Laurent emphasised the power of bringing the Hipsters, Hackers and Hustlers together in cross-functional teams to create focused interventions. These three personas get to group the critical elements required to think big, turn that big thought into a minimal viable product and then release to and learn from a targeted customer base. This simple step overcomes many of the challenges traditional innovations teams can have.
The second key takeaway for me, "Create a Network" of pragmatic innovators, is extremely powerful. Pascal and Laurent gave many systems and examples of how they help organisations create a network of innovation and communication. This achieves focus through multi-tier strategy deployment, senior leadership engagement and review (Shark Tank), cross-team and business learning through Hackathons and partner networks to enhance and speed up the ignition of new growth. Networks are so important for focus, communication and learning, as this episode demonstrates.
04:23min Laurent: Consider the transformation as conducting the swimlanes in parallel. Brad: So, Laurent, you're saying you've seen without really focusing on the three swim lanes and running them in parallel, the transformation doesn't stick. It doesn't sustain. Laurent: Absolutely. So if you don't start at the top, then you don't really have very good digital literacy. You don't have leaders leading by example, and enabling the right behaviours, the right investments, to drive and steer the transformation. If you don't invest enough in the internal capability building, you might have a great vision but not a strong army to execute and bring that strategy to life. And the fruits obviously is what everybody is interested in, because this is where the value generation happens. But again, then the question becomes, how do you build a balanced portfolio? Which articulates the two contradictory objectives? Which is, on the one hand, protect your core business, which is about laying the foundation and reforming the customer journeys while investing in building the future, which is creating a new digital offering and even testing out a new business model.
06:09min Pascal: Leadership, vision, culture is the soil, but now we need innovation muscle. We need capable innovators throughout the company, and you need to decide strategically. We normally say one per 100. So, if you've got 10,000 people, that's 100 innovators. Now, how do you support them? Well, you need a framework of a robust, teachable, scalable innovation method, which gives a shared language and a shared logic. Now, you've got to teach these people. So that means an academy. So what are the core skills? You need a way of assessing what the actual skills are, what the gaps are, and learning solutions to close them. You need a way of certifying and sustaining the certification. Then you need to communicate regularly. We always say you need seven channels of communication. And that could be things like boot camps. It could be monthly teleconferences. It could be a practice: we do a three-minute video, after every proof of concept, or MVP, or major milestone so that everybody knows it. We could have learning groups, that's something I like very much. For example, let's say we must apply AI, or blockchain to trade finance. So we'll have a study group, a learning group, and they will work together and communicate on a monthly basis. So seven channels of communication. And finally, you've got to make it easy for people to innovate. And that means a process, so we call it the Innobox program, which is very similar to the Shark Tank approach. But also, you've got to have an accounting method that measures and values things properly because innovation cannot be measured well with conventional accounting.
13.10min Of course, the most famous milestone is to validate product-market fit. And that happens during your soft launch and then at scale launch, and that's basically how you measure whether or not you've managed to avoid a Moore chasm. And that's giving you the scale phase, which is the 10x growth, and that is captured through a series of marketing and sales experiments that help you find many sweet spots in a market that is now global.
24:29min Then, you focus on fostering internal and external collaboration. So, the internal collaboration goes back to the power of cross-functional teams, bringing hipsters, hackers and hustlers together. But also enabling and ensuring that they always go back to the customer, whether it's the end-user or end customer, to validate whether or not they have done a good job.
26:28min The core metaphor that occurs to me with respect to building a culture, building digital literacy, and in the activities we're going to describe, is 'steroids'. This is like innovation on steroids. It's learning on steroids.
27:21min The ethical component is really really important because there are many elements and emerging issues around data privacy and also the necessity to make sure that the algorithm is easy to understand as opposed to BlackBox, which is how they are often referred to. So you need to basically be able to explain to the regulator and society how you collected the data, what you have done with them, and how you have come about your decision.
34:23min John Deere, the farming equipment manufacturer, has a splendid platform called My John Deere, which does just that. They connect farmers who have problems with irrigation, with fertilisation, with crop yield etc., with people who can solve those problems through the My John Deer platform.