Understanding Digital Innovation and Its Potential to Accelerate Business Growth
“Digital innovation strategy is the process of developing organizational and technology-based capabilities that allow a company to continuously improve its customer experience and lower its unit costs, and over time sustain a competitive advantage. Digital innovation in business is the rewiring of an organization, with the goal of creating value by continuously deploying tech at scale.”
Building and implementing a strategy in the digital age sometimes leaves many businesses with more questions than answers. The most recent McKinsey Global Survey on digital innovation technology in business indicates that they are not making much headway in their attempts to digitize their business development strategy, despite its profound effects on international trade — disturbances that have upended entire industries and a markedly faster pace at which transactions are completed. One indication that businesses are stagnating in their attempts to digitally transform their operations is the nearly equal level of digitalization reported by respondents to this year’s and last year’s surveys.
Identifying Your Digital Innovation Strategy
The speed and agility with which the best economic performers develop, implement, and modify their digital innovation strategy — that is, the velocity and adaptability of their operational models for digital strategy — sets them apart from the rest. It is not surprising that the speed at which strategy ties to financial outperformance aligns with our prior research on strategy planning. Business development strategy must place bigger bets and reallocate resources and personnel more swiftly as the pace of changes connected to digitalization picks up speed. These tactical adjustments to the development, implementation, and ongoing adjustment of digital innovation in business to adopt a “fail fast” mindset and improve their ability to recognize new possibilities and reduce their losses from outmoded ones, which allows for higher profitability and revenue growth.
The Benefits of Investing in Digital Innovation
A digital strategy and innovation company that performs better in terms of revenue and EBIT also stands out from the competition in that they have embraced the changes in the economy brought about by their digital innovation strategy. According to the findings, they have achieved this in three distinct ways: by utilizing emerging digital ecosystems, concentrating product development efforts on entirely new digital services, and developing novel digital innovation technology in business.
We are aware that the emergence of new markets, data sharing, and network effects advantages have been made feasible by digital innovation in business on a scale that was unthinkable only a few years ago. The convergence of these variables has resulted in the creation of digital ecosystems by these platforms, which are causing a blurring of industry borders and altering the methods by which businesses assess the viability of their business development strategy, the requirements of their clientele, and the identities of their rivals and partners.
Our most recent findings further support the past research that has shown that acquiring the right digital talent is essential to success in digital innovation technology in business. Another big issue is talent: while the demand for skilled digital talent is still greater than the supply, qualified talent is hard to come by. However, the most successful economies are putting more effort into finding a solution to this issue. They also use digital talent considerably more nimbly than their colleagues do, reallocating these workers across the company about twice as often. Better alignment between resources and strategies is made possible by this agility, which also makes it possible to deploy resources more quickly to the highest-value digital initiatives or to clear up a backlog of digital work.
Looking Ahead - Key Points
Increase the dynamic of your strategy process. A digital strategy must, by definition, adjust to both internal and external changes brought by the digital age. Considering how quickly things are changing, a plan like this needs to be reviewed, refined, and updated far more regularly than in the past in order to stay up with the digital age and take advantage of first-mover advantages. A digital strategy and innovation company must use its digital strategies as a roadmap for continuous change.
Invest early and heavily in skills and capabilities. One of the most difficult problems to address as businesses change to meet the demands of digitization is talent. The findings demonstrate that businesses must accept this reality and then choose the best ways to address it, including more intelligent and flexible resource allocation or the use of M&A to speed up the development of new digital capabilities.
Rethink the way you define success. To thrive in the digital age, businesses must act quickly. However, a lot of companies continue to gauge performance using the same measures from before, which were intended for a more leisurely pace of operation and a stricter approach to developing strategies. A digital strategy and innovation company needs to abandon outdated measurements, like market share, which are no longer reliable measures of financial success.
Motivity Labs is a leader in digital innovation. Our tried and tested methods of delivery truly encapsulate our ethos of “Innovation as a Service”. Contact our very capable team to learn more about how we can transform your business.
