Difference Between Transformation and Innovation

Krista: Thanks David for joining us today. Today we’re talking about the difference between transformation and innovation. So when you approach enterprise customers, how do you explain the difference between digital transformation, and innovation?

David: A lot of our customers when we approach them, they’re talking about them together, they’re co-mingled, the ideas are combined. And really we try to pull them apart as you suggest. And so, when we talk about transformation, we’re focusing on the big transformational changes, the big systems, the big processes, the big organization redesign. The goal of the transformation is create a step change of performance in your organization.
So what are you trying to do? You need to change your whole HR system. You need to change your whole sales and marketing pipeline. From the basis of that, you’re trying to change the way your whole business runs. You’re trying to get rid of paper, make everything digital maybe.
On the innovation side though, when we talk to people about innovation, innovation’s really about experimentation. And experimentation depends on being able to changes things quickly, test a hypothesis, change it again. So what you’re really talking about is making the business more agile, and making it more nimble. A lot of times, that’s a completely different sort of set of practices. The goal of that may be, we’ll end up with transformational change, but really the goal of the individual changes, and the hypothesis is to learn faster. What should we be doing? What are our competitors doing better than us?
The trick of it all though, in several cases and for a lot of the organizations is, that in order to have innovation, to have experimentation, many times they have to transform first. Their organization, their processes, their IT systems simply aren’t set up to allow them to make quick changes, and to change directions. They’re nimble to begin with.

Krista: So when you talk to customers and you’re sitting in meetings talking about transformation or innovation, do people have a place where they start? Is there a guidebook as to, is this transformation, is it innovation? What do I need to do first or how do I need to do it?

David: We always tell customers to start with their strategy. What is their organization trying to move towards? And if their strategy is to get rid of paper and to go digital, then they need a transformational strategy, and they need to be looking at changing the big blocks, the big systems. They need to understand that doing that’s going to change their organizational design. It’s going to change lots of things. It’s a big change, and it’s probably going to take a big investment and several years.
If they’re looking to make tactical changes to become more nimble to do that smaller experimentation, then we should be looking for places in the organization where the IT systems, the people want to change, the people want to support that kind of nimbleness, and they want to make a difference. We should be using that as an incubator to drive innovation, and start there, and build on the success to drive it across the whole organization.

Krista: Well thanks for joining us and talking about the difference between innovation and digital transformation, and we look forward to having you again soon.

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