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More Innovation Calls for Much More Digital Infrastructure

In the above chart, we depict how both more “small-scale innovation” (AKA incremental innovation ala Kaizen) and more “medium-scale innovation” (AKA process innovation ala Michael Hammer) call for much more digital infrastructure. (Note that for simplicity we did not include the third level of large-scale innovation, which of course calls for much stronger digital infrastructure).

To elaborate, organizations see their competitors (both current and new) adopting new digital business models; their leaders realize that they must innovate to keep pace. Think, for example, about a traditional brick and mortar chain like CVS threatened by the entry of new player (Amazon) to their market

In many cases, digital is the external force that is pushing companies to innovate, and at the same time, digital is the force that allows organizations to initiate, groom and scale their innovation. 

Digital is both friend and foe. Creating a strong digital infrastructure enables a company to innovate at a faster pace. In a way, digital innovation at its core is a meta-innovative process that enhances the digital infrastructure and thus allows other forms of innovation.

How might this work? Consider a company which is looking to innovate in the way it interacts with its customers. A manager proposes using a new Customer Relationship Management (CRM) software. 

At a company that has a weak digital infrastructure, such a move could take months. Yet in a company with a strong digital culture and ability, where employees see the opportunity, are ready for change, and have adopted digital technologies in the past, this change can happen in days. In fact, an initial CRM system can be implemented overnight with cloud-based tools, that is fed by an already organized excel based data.

Companies too often see the digital force as a threat rather than an opportunity. Yet to thrive, companies must embrace digital — a simple attempt to “innovate” without it will not suffice. 

Digital technology has become a critical part of an organization’s ability to create a competitive advantage. Therefore, the right way to relate to digital technology is as a strategic investment. Management must use digital technology to reinvent and re-imagine their organization.

The bottom line: To enhance your innovation cycle (initiate, groom, and scale), enhance your digital infrastructure.

September 2019 Update

Welcome to our 2019 September update, where we share our latest publications on Innovating innovating.

i8 Ventures is a boutique consultancy specializing in digital transformation. 

Yours Sincerely,
Prof. Yesha Sivan and the team

Innovating Innovating
Chemi Peres, Co- Founder of Pitango Venture Capital

In this video, Chemi Peres talks venture capital success, innovation’s role in competition, and the value of human capital in entrepreneurship.

(Read More & See Video…)

i8 Research
The Top 10 Risks of Digital Transformation

To succeed in your digital transformation journey, you need to know the common ten risks and how to mitigate them. From i8 Venture’s latest publication, “Doing Digital.”

(Read More)

Leadership
Orange Bike Mindfulness (OBM) Coming Soon to a Hotel Near You

Joseph Fischer, CEO of Vision Hospitality & Travel, discusses his experiences at an OBM workshop, and how mindfulness can be a useful tool for the hospitality and lodging industry.

(More Details…)

External Research
When Your Employees Refuse to be Eaten by Software

What do you do when you want to integrate a technology into your business, but your employees push back? Uber may provide the answer.

(Read More …)

Case Study
The Ferrari Pit Stop and the Value of Shared Goals

Watch: A Ferrari pit stop team needs only 2.5 seconds to change four tires. What’s their secret? Learn how “goal hierarchies” can make your team run like them.

(Read More …)

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When Your Employees Refuse to be Eaten by Software

“Software is eating the world” is the pictorial representation of digital transformation. But what happens when your employees refuse to be eaten? For example, an Uber driver refusing to abide by the rules of Uber’s algorithm. Or similarly, a doctor refusing to accept an AI recommendation from the MRI.

As an organization undergoes a digital transformation, one of the keys to enabling a successful role-out of new technologies is ensuring that employees are comfortable with the level of change. Recalcitrance from employees to digital transformation can set back your organization’s progress, and stymie an otherwise successful implementation. In that light, it is critical to view them as partners in the journey rather than as an obstacle.

In organizations where digital reigns king, such as companies which rely upon algorithmic technologies to manage their employees, this dynamic challenges organizations daily. One dramatic case study of this phenomenon is Uber, which provides a powerful example of employee dissatisfaction with new technologies.

As Uber continues to transform, employee resistance to change and algorithmic management has grown, according to a study quoted recently in the Harvard Business Review (HBR). Uber’s drivers are reliant upon the whim of an algorithm to assign them customers and determine their routes, fees, and more. This, according to the HBR, has left them feeling as though they are under constant surveillance, dehumanized, and understanding little about the algorithm which manages their daily lives. As a result, employees have been known to resist, whether by attempting to manipulate the algorithm, or by organizing in political forums without the knowledge of the company.

To manage this problem, the HBR offers four best practices to mitigate the discomfort brought about by algorithmic management, which can be extrapolated out to broader challenges in digital adoption:

  1. Share information. In theory, algorithmic management can increase transparency, since even learning algorithms that are used to manage workers reflect a set of rules and procedures that comply with the strategic goals of upper management. It may not be possible to share the algorithm itself with workers, but company leadership can and should share with them the data and goals that informed it.
  2. Invite feedback. To counterbalance the unidirectional commands that the algorithm hands down to drivers, companies should find ways to democratically include them in decision-making, for example by involving them into committees or councils that discuss and negotiate work related internal regulations. Getting workers actively involved in discussions about the design of algorithm-driven systems would do much to build more engaged and supportive workforces.
  3. Build in human contact. People need people. Organizations should develop formal, supportive communities where workers feel like members and can make social connections. Adding a human element to the way people are managed will help workers feel less like they are being treated as machines.
  4. Build trust. Implementing benefits that improve worker’s welfare, such as providing financial support in case of illness, or better sick pay or maternity leave, may be a first step to humanizing the company and mitigating the anger of employees who are managed by faceless algorithms.

To view the article by the Harvard Business Review on , click here

 

Watch: Chemi Peres on Innovating Innovating

Chemi Peres and Yaakov Eilon talk venture capital success, innovation’s role in competition, and the value of human capital in entrepreneurship. Featured on Innovating Innovating, a series on i8 venture’s e-learning platform, i8 Academy (Beta mode) :

Chemi Peres is a Managing General Partner and Co-Founder of Pitango. In 1992, he founded the Mofet Israel Technology Fund, an Israeli venture capital fund publicly traded on the Tel Aviv Stock Exchange. Prior to Mofet, Chemi held managerial positions at Decision Systems Israel (DSI). Chemi served as a pilot in the Israeli Air Force for 10 years. Chemi has served on the boards of several NASDAQ companies, such as AudioCodes, BackWeb, Magic Software Enterprises, Aladdin, VocalTec, Orckit Communications and Koor Industries, among others.

For more information about the father of Chemi Peres, Shimon Peres (past President of Israel), see his book No Room for Small Dreams: Courage, Imagination, and the Making of Modern Israel

The Top 10 Risks of Digital Transformation

It’s well known that a digital transformation can save a business —  but digital journeys are mountain climbs, not morning commutes. That means there are pitfalls along the way which could derail your climb, and false summits which will leave you lacking motivation. Although there are dozens of such risks, we’ve adapted this list of the top ten from “Doing digital” by i8 venture’s Raz Heiferman and Dr. Yesha Sivan.

 

  1. Digital transformation will change your business, but focusing on the right level of change is key.

The organization should look at digital technologies as enabling technologies – that is, as technologies that allow it to act efficiently and effectively, and in step with the digital age. However, the organization should not ecstatically pounce on every new technology or business idea. Some changes can generate results that are relatively short-term, while other changes are more profound. The latter demand more time and resources.

 

  1. Investing in new technology is crucial for growth, but just because the technology is new, doesn’t mean it’s right for you.

The organization should carefully consider which technologies are appropriate for its business goals and for the challenges it faces, rather than blindly chasing every new technology. On the other hand, boldness and openness are two traits the organization needs in order to wisely adopt new technologies that can potentially change the way the organization does business. Failures are sometimes unavoidable during the process of innovation. Hence, the key is to recover from failure as quickly as possible and move forward.

 

  1. Consider where your organization is on the digital transformation Journey.

It is important that the organization be aware of its state of digital maturity and the elements affecting the success of the journey, including the organizational culture, the preparedness of the management team and employees, the readiness to adopt and encourage innovation, the quality of business processes, and the readiness of the IT division. All these dimensions are no less important than the technological dimension in itself.

 

  1. Not everyone in your company will feel comfortable with the digital Transformation.

Technology changes at a faster pace than organizations. Yet, an organization’s workforce remains an important component in the change processes, and not all of the employees are eager to embrace change. The organization must not ignore this challenge. Instead, it should invest in change management as an integral part of the digital journey and mobilize employees for the transformation process as early as possible.

 

  1. It’s no good having data if you don’t know what it means.

Organizations engaged in the process of digital transformation place data at the center of their business models. Some of them are astonished to discover how inundated they are with data that does not duly serve the organization.The new tools enable an organization to draw insights and create business opportunities from its reservoir of data. From data to insights is the fuel driving the digital transformation, providing new ways for improving decision-making processes in real time, and even turning data into a new revenue source.

 

  1. Digital transformation won’t grow your profits overnight. Embrace change as part of a wider growth strategy with measurable goals.

Customer expectations are a major driving force behind investment in innovation. Nevertheless, it is important that the organization develop reasonable expectations regarding changes that are achievable in the short term; it should view these changes as part of a long journey of digital transformation, remembering that change is the only constant in the reality dictated by the current digital age.

 

  1. Digital transformation should make your business more adaptable,but it won’t make it immune to competition.-

Implementation of digital technologies enables organizations to reach a wide clientele, enter new places more easily, and respond more quickly and flexibly to customer needs. All this with a relatively low investment of resources. Ultimately, however, the organization’s managers must ensure that the potential of digital transformation is translated into an actual competitive advantage – that the digital technologies boost its business agility and enhance the way in which the organization conducts business and connects with its customers.

 

  1. It takes more than just technology to encourage collaboration across departments and divisions.

The organization must foster collaboration among its business units and leverage digital technologies to make the boundaries between departments and divisions more flexible, even if they are located in different regions or countries. Sometimes, investments made by particular units can be successful, but the success is only local. The new technologies should improve and facilitate the development of new business processes across units, cultivate a culture of collaboration, and encourage and empower knowledge workers. 

 

  1. Your customers don’t think about your digital transformation, but they do expect it to happen.

Customers are rapidly and prominently adopting digital technologies in their lives. The organization should assume that customers expect it to respond accordingly, and even take the lead in introducing advanced digital technologies. Moreover, from the organizational perspective, it is important to always be cognizant of the fact that the digital transformation affects every part of the organization. Your competitors also understand this, and startups pose a threat to every organization, large or small.

 

  1. You can talk the talk, but make sure you walk the walk.

Lip service is not enough to ensure that the digital transformation will penetrate and take root in the organization. Organizations must internalize the importance of the phenomenon and be prepared to invest the necessary resources in technology and innovation to become truly digital.

Case Study: The Ferrari Pit Stop and The Value of Shared Goals

Consider the Ferrari video above, and notice what can be achieved in 2.5 seconds: Stabilization of the vehicle, tire changes, part replacements, and finally release of the vehicle. The self-critic in you might ask, if it’s possible to do so much in that time, why has my project been stagnant for months?

There’s plenty of blame to go around in an organization when results aren’t achieved. Managers may assume their subordinates are incompetent or lazy. Subordinates may blame poor working conditions, the tools given to them, or their managers lack of clarity. 

Yet, even if everyone was working at full capacity, there is a common obstacle shared by both managers and subordinates: goal ambiguity. It is typically not sufficient to leave goals as one line slogans — if they are even addressed at all.

In the fast, messy, and global world of today, projects are increasingly complex and require a goal-subgoal hierarchy (generated through deep planning) from day one of implementation. The goals generated should strive to be quantitative, fully prioritized, and in line with the organization’s mission. 

Typically, projects begin with great fanfare, but often the nitty-gritty is not confronted in planning and a goal hierarchy is not established. This leaves team members floating, confused, and sometimes embarrassed to clarify once the project is in motion.

Most importantly, once a target is set, team members will know how to aim. Tasks can be divvied up and organizational charts can be established. Thus team members, knowing exactly what their goal is, can be precise in the actions they take – from the tasks with the greatest responsibility down to crafting an email message to a client. Each person’s task becomes well defined. 

Consider again the Ferrari video above.

What enables the team to work so well? Surely they have the skills and training. But there are plenty of organizations that cannot thrive despite having recruited top talent. 

So, what is the key?

The goals are clear and hierarchical: Chiefly, make races run smoothly so that fans can be entertained and staff can earn an income. How can we do that (subgoals)? Change all four tires. Then, do it as fast as possible. Then, make a front wing change. If there’s nothing to fix, clean the front wing etc…

With these goals in mind, the team is able to work in full synchronization with near-zero ambiguity, and utilize a hierarchy of priority should uncertainty arise. Everyone knows exactly what they are doing, what everyone else is doing, and why.

If you want to increase the power of implementation when setting out on a new project, generate a list of goals – not a list of tasks. Tasks will come later. If planning is ineffective, implementation will be ineffective. 

For an in depth analysis of the Ferrari Pit Stop and each team member’s task, check out this video:

Exploitation versus Exploration: Know the difference and master both types of innovation

Charles O’Reilly and Michael Tushman’s Lead and Disrupt: How to Solve the Innovator’s Dilemma, published in 2016, maps two types of innovation:

  1. Exploitation: Innovation that emerges from existing assets of the organization and improves them through innovation. This kind of innovation is relatively moderate, focused mainly on enhancement and efficiency — most managers of organizations feel comfortable with it. It deals with questions familiar to them: improving existing products, improving the product for a proximate market, etc. They know the customers and their expectations and thus find it relatively easy to address the challenge of exploiting.
  2. Exploration: This type of innovation requires the organization to leave its comfort zone and examine new markets, products, and business models unfamiliar to them. From the managers’ perspective, this type of innovation obliges them to venture into unfamiliar territory.

Despite the challenges involved in the innovation of the exploratory type, O’Reilly and Tushman argue that organizations should formulate a portfolio of innovative projects that include both types. “Regardless of a company’s size, success, or tenure, we argue that their leadership needs to be asking: How can we both exploit existing assets and capabilities by getting more efficient and provide for sufficient exploration so that we are not rendered irrelevant by changes in markets and technologies?”

 

 

 

Five platforms supporting innovation (including a full draft chapter)

In this post, we present the five types of digital platforms that support innovation. Let’s first define the term platform as a cluster of digital technologies (with some shared affinity) that can drive innovation in the organization.

Each platform expresses a distinct aspect of how digital technology can be used to support innovation. The diversity of the five different platforms highlights the richness and depth of digital platforms, and their potential to serve as an infrastructure for innovation.

Grouping the various digital technologies into five platforms is designed to help digital leaders to first understand and then harness the potential of these technologies to drive innovation. Managers need to familiarize themselves with these five platforms and understand their relevance to their organization’s strategy and the creation of its competitive advantage.

  1. Platform 1: Supporting Innovation (Big, Med., Small) – the first and most common platform talks about the direct role of digital enabling big, medium, and small changes to business processes or products.
  2. Platform 2: Generating Innovation – talks about the use of digital to support the process of making innovation (on the individual, organizational, and mainly on the network level). (e.g., Slack as an internal tool).
  3. Platform 3: Analytics for Innovation – talks about the use of data to find and experiment with newer innovations. (e.g., A/B testing, analytics for micro-segmentation, etc.).
  4. Platform 4: Sub-Systems for Innovation – talks about harnessing the innovation value of common platforms like LinkedIn, Google, and Facebook, & modern technologies like the cloud, mobile, and data. (e.g., think of how Waze is using mobile connectivity, IP, mapping, and GPS to bring the unique value of user-based mapping.)
  1. Platform 5: Building Innovation Platforms – Last, but not least, what we call the 21st-century innovation – a unique type of innovation that in itself generates even more innovation (e.g., think Apple apps or Google Youtubers ecosystems.)

To receive the full draft chapter (free PDF) from the book “Doing Digital” (Hebrew) by Raz Heiferman and Prof. Yesha Sivan, please fill in the form below.

Click here for the full e-book published online in E-vrit (by Ynet).

 

28 July 2019, Ramat-Gan, Israel: Orange Bike Mind (OBM) workshop with PAI (the Israeli community for organizational change and development)

i8.venture and PAI (The Israeli community for Organizational change and development) are collaborating to offer a unique Orange Bike Mind Workshop on 28 July 2019.

It is rather unique in that its

(1) price is 900NIS (for non-PAI-members)

(2) facilitation will be in Hebrew (slides in English)

It will take place 28-July 2019 at 13h00 at Ramat Gan.

To confirm your spot.

 

 

OBM Itinerary jULY 28th 0002

Link to our website.

 

 

 

 

June 2019 Update

Welcome to our 2019 June update, where we share our latest publications on Innovating innovating.

i8 Ventures is a boutique consultancy specializing in digital transformation. 

Yours Sincerely,
Prof. Yesha Sivan and the team

Innovation
Innovating innovating = running a race car while re-designing the engine and replacing it, at the same time (video)

In this video, Prof. Yesha Sivan explains what “Innovating innovating” is about. Innovation is more than just creativity or ideas; it is the realizations of these ideas into solutions that create value.

(Read More & See Video…)

i8 Research
Agilifying Your Digital Business: Published by the Cutter Consortium

“Agile” has become a strategic issue. Our article recommends 6 steps to consider when transforming into an agile organization.

(Read More+Free Download)

Leadership
Orange Bike Mind (OBM) Workshop - 28 July 2019. Collaborating with PAI (the Israeli community for organizational change and development)

Our 4 hour leadership workshop is designed to “install” mindfulness – a quality practiced by leading firms like Google & McKinsey. This “wise intervention” workshop will teach you the 3 qualities of 21st century leaders: Focus, Openness & Control.

(More Details…)

External Research
Prevent Turf Wars By Selecting One Digital Leader

Who should lead the digital effort?

  • A new senior executive position: CDO (Chief Digital Officer)?
  • Assign VP Digital to an executive, on top of the regular duties? Board Member?
  • Should the CEO take charge of the Digital Efforts?

(Read More …)

Case Study
Gogoro - a One Billion Dollar Unicorn From Taiwan That Wants To Be The Tesla of Scooters

Taiwan’s 1st Billion Dollar Start-up is revolutionizing the scooter industry the way Tesla revolutionized the car industry. Gogoro recently rolled out their Gogoro 2 Smartscooter, and it’s really smart.

(Read More …)

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