By Dr. Nicole Pfeffermann, December 4, 2017
Re-thinking business in the digital age can be a playful and challenging task. Digital is creating opportunities to reach new markets, co-innovate with business partners and grow ventures. It requires shifting perspective from closeness to openness and sustained interactions with individuals to successfully develop and launch new products, services and businesses. But why fail more than 80% of companies in digital (business) transformation and do not deliver the anticipated, promised returns and growth results?
Success of open innovation and transformation projects depends on a new understanding of managing innovation dynamics from an integrated perspective on Communication, Innovation, and Strategy (CIS cycle). Otherwise resentment, silo-thinking, and change resistance stand in the way which leads to negative effects of organizational culture on human behavior, for instance, hiding and avoiding conflicts, and ultimately affects the core business.
This article dives deeper into the key themes, such as engagement, culture and interaction, and seeks to answer this question. It provides a thought-provoking view on innovation management and offers four generic strategies for successfully managing innovation and change and, in particular, for successfully managing dynamics of digital transformation, business innovation, and entrepreneurship. In fact, a simple formula for success is presented.
In general, it takes time to change from one reality to another. Individuals need to experience the unknown —transition phase—and consciously alter perceptions and actions in order to envision and (co-)create the new reality. The process of leaving the current reality (comfort zone) as well as constant learning and interaction with others in dialogs normally creates tensions and undesired emotions, such as resentment, fear, and disappointment.
For example, an employee can be uplifted and inspired or might complain about an interaction because he or she feels hurried, overcommitted, and pressured. Resentment is usually caused by wrong assumptions, prejudices, and false accusations. It can deeply affect relationships and engagement in open innovation and digital transformation.
Feeling resentful and overlooking toxic behavior leads to unresolved conflicts and increased information hiding, closeness, and destabilization. Any good idea or growth initiative is being replaced by old, negative behavioral patterns. For example, presenting new ideas to senior management and board of directors might cause bad decisions and non-commitment:
What is the difference between engagement and connection?
As shown in Fig. 1, great human leaders understand the importance of bridging the gap between innovation management and communication management and, hence, linking innovation activity and innovation dialog to grow ideas and build connected relationships.
The art of relating – human connection
Engagement is essential in collaborative innovation (e.g. Weiblen & Chesbrough, 2015) but usually something is missing when individuals are engaged in open (corporate) innovation. Connection is far more than engagement. Human connection and human leadership in business practice require interaction and, therefore, involve:
The feminine power of digital transformation
Digital transformation is not just a small step (= evolution). It is a revolution in terms of how we as human beings understand the world we live in—our navigation system or so-called world map—which ultimately affects how we work, collaborate, act and interact with individuals, for instance, living in virtual networks, joining co-working spaces around the world, and sharing our reality with our Instagram fan community. Consequently, we all need both our activity level (masculine) and dialog level (feminine) which allows us to successfully transform into new realities, manage open innovation, and experience new learning environments. Relationship management and communication design are thereby critical factors in the digital innovation age. In fact, culture surely plays a pivotal role but equally important is the information-interaction design to bridge the gap between innovation and communication management.
As human beings we have a well-organized system of ideas which helps us to understand what is going on in the world around us and inside (self-talk). It is a specific perceptual lens—a navigation system or so-called world map—that works for us in terms of how we communicate and feel comfortable with events and situations in our (professional) life.
What happens when our navigation system is challenged? To understand (new) ideas and especially how we react in unfamiliar situations, unexpected new idea worlds or when we experience disruptive events, we use our knowledge schemes, our templates to organize information and understand interactions with others. These knowledge schemes (information-interaction designs) can be activated and modified every time we seek information, reflect, act, and interact with others based on our ability to communicate with others and ourselves. Hence, our so-called information-interaction design is the critical impact factor to help us understand how we can bring forward a new idea, be understood in back-and-forth exchanges with responsive partners, and (co-)create new worlds or transform systems.
After studying over more than 10 years in this field of interest, I have identified 15 specific information-interaction designs from an integrated perspective on Communication, Innovation and Strategy (CIS), which draws on the innovation communication capability from a strategic management perspective, as shown in Fig. 2. The overview of all information-interaction designs is provided in the appendix.
Brief review: As a new communication field and dynamic capability, innovation communication facilitates managing open innovation, strengthening corporate culture and reputation, successfully launching new products and services as well as building new capabilities and difficult-to-imitate resources. Consequently, firms today need to develop a strong portfolio of communication as an integral part of any digital information-innovation process on a functional and/or company-wide level. Read more about this topic in the third edition of the international edited book ‘Strategy and Communication for Innovation’, Springer, 2017.
Each of the identified 15 information-interaction designs has its main characteristics and tools, for instance, the level of information and interaction differentiate every design. From a strategic management view, information-interaction designs are specific communication styles which allow an individual or organization to develop a smart communication model and create value through communication. For instance, a community communication model, co-creation communication model and visionary communication model are not interchangeable when communicating the New and successfully managing innovation and digital transformation.
Fig. 3 shows that strategy communication is key for innovation. Understanding how the information-interaction designs and the CIS cycle is related can be supportive in developing smart communication models and linking a strategy approach to a communication approach. The communication model design describes the rationale of how individuals or organizations create value through communication, reach different markets, and successfully link a strategy approach to a communication approach to achieve goals. It is a visual, one-page lean startup and strategic management tool for developing, challenging and presenting new or documenting existing communication models (linked to a business model).
Tip! At a meta-cognitive level the CIS cycle helps to better understand the basic principles of how we communicate, innovate, and strategize resulting in a continuous cycle of bringing forward new ideas and making progress in the world. With respect to digital transformation it is crucial to understand those basic principles because every organization has its own specific information-interaction design which affects digital (business) transformation and continuous innovation and change. So, be aware of the modification of information-interaction designs!
As far as the basic structure of the 15 related information-interaction designs is concerned, as illustrated in Fig. 4, three basic interrelations are: (1) VERTICAL; (2) HORIZONTAL; and (3) DYNAMIC. For instance, from the vertical stance each column builds up from the base (field 1) to a more sophisticated, complex information-interaction design (field 5), Actualization is the more sophisticated, complex communication model from the communication view: (1) true connection and improved relationships without up-and-down roller-coaster rides; (2) emotional response and opening up to new experience; (3) growth mindset to nurture talent, uniqueness, simplicity, effortlessness and playfulness; (4) identification with humanity, community, & culture; and (5) value of the truth and facts in a scientific-thinking manner. This communication style can be described as mindful, simple, informative.
Managing innovation dynamics involves linking information-interaction designs over a period of time. As shown in Fig. 5, four generic dynamic communication approaches for innovation can be identified to successfully communicate the New, perform open innovation, establish a positive innovation culture, tap into a firm's growth potential and create new market opportunities:
Example: Entrepreneurship [Strategy-Innovation]
One of the generic strategies is ‘dialog communication’, which includes the influencer (strategy), visionary (strategy) and art (innovation) information-interaction design:
Scenario A. Creative Entrepreneur (e.g. fashion designer)
– involved, unorthodox, dialog-oriented –
Emotionally involved in the (co-)creation process with a fan community on social media and dialogs with fans using unorthodox communication platforms: e.g. street art, poetry slam.
Scenario B. Intrapreneur (e.g. employee at a co-innovation lab)
– co-communicative, imaginative, dialog-oriented –
Co-communication with business lab partners to shape collectively a new environment and envision the future in mobility in terms of disseminating thought-provoking ideas and stimulating (new) customer dialogs at lab events: e.g. design thinking workshops.
For both scenarios the next step could be the development of a communication model with clearly defined strategic and operational instruments to address three markets: Resources markets, communications markets, and sales markets. Please read the article ‘The Digital Path to Business-Economic Growth?!‘ to learn more about the instrument ‘Communication Model Design’ and download the template.
Why fail more than 80% of companies in digital (business) transformation and do not deliver the anticipated, promised returns and growth results?
Answer: Successfully managing innovation and change implies bridging the gap between innovation management and communication management, the activity-engagement level (masculine) and dialog-connection level (feminine). Instead of focusing only on engagement in open innovation and overcoming change resistance and resentment in business innovation, for instance, dealing with (1) prevention and promotion people and (2) change and innovation communication, it is crucial to build a linkage between engagement and human connection (culture)—mastery of the art of relating—and information and interaction (information-interaction design)—mastery of the art of communicating and the communicating mind for human leaders. Please read the article ‘It's Time to Re-think Ways To Create System Growth’ for additional information about the communicating mind for human leaders.
The formula for success in digital (business) transformation
Based on the dynamic capability of innovation communication and integrated perspective on innovation, it is the INSIDE-OUT approach which allows to build a solid foundation to seize and transform, create and co-create, and constantly align and re-align resources with a firm’s strategy for successful digital transformation, renewal, and growth. As shown in Fig. 6, the simple formula for success is: Innovation + Communication.
The information-interaction design is thereby key to succeed in the open innovation economy and era of profound digital transformation. It helps human leaders to activate and modify the firm’s navigation system as a strong foundation to grow, prosper, and survive in the long-run.
Please be aware that a relationship consists of two entities who agree to stay in touch. One-sided, supply-oriented ways of creating the future of systems and markets only exist because all parties allow those types of relationships (No blaming!).
APPENDIX: 15 Information-Interaction Designs
Simple understanding of turning ideas into standout successes
Growth 2.0: New value chain and advanced co-creation platform
Key strategies to successfully manage innovation and change