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Survival of a business in this digital age largely depends on its ability to timely embrace Digital Transformation. Digital Transformation entails using Digital Technologies to streamline business processes, culture, and customer experiences.
In order to compete today—and in future—and to enable Digital Transformation, organizations should work towards fostering a culture of continuous learning, since Digital Transformation depends on learning and innovation. The organizations that holistically embrace this culture are called “Next-Generation Learning Organizations.”
The next generation of Learning Organizations capitalize on the following key variables; Humans, Machines, Timescales, and Scope. These organizations incorporate technology in enabling dynamic learning. Creating Next-Generation Learning Organizations demands reorganizing the entire enterprise to accomplish the following key functions to win in future:
- Learning on Multiple Timescales
- Man and Machine Integration
- Expanding the Ecosystem
- Continuous Learning
Learning on Multiple Timescales
Next-Generation Learning Organizations make the best use of their time. They appreciate the objectives that can be realized in the short term and those that take long term to accomplish. Learning quickly and in the short term is what many organizations are already doing, e.g., by using Artificial Intelligence, algorithms, or dynamic pricing. Other learning variables that effect an organization gradually are also critical, e.g., changing social attitudes.
Man and Machine Integration
Rather than having people to design and control processes, Next-generation Learning Organizations employ intelligent machines that learn and adjust accordingly. The role of people in such organizations keeps evolving to supplement intelligent machines.
Expanding the Ecosystem
The Next-generation Learning Organizations incorporate economic activities beyond their boundaries. These organizations act like platform businesses that facilitate exchanges between consumers and producers by harnessing and creating large networks of users and resources available on demand. These ecosystems are a valuable source for enhanced learning opportunities, rapid experimentation, access to larger data pools, and a wide network of suppliers.
Continuous Learning
Next-generation Learning Organizations make learning part and parcel of every function and process in their enterprise. They adapt their vision and strategies based on the changing external environments, competition, and market; and extend learning to everything they do.
With the constantly-evolving technology landscape, organizations will require different capabilities and structures to sustain in future. A majority of the organizations today are able to operate only in steady business settings. Transforming these organizations into the Next-Generation Learning Organizations—that are able to effectively traverse the volatile economic environment, competitive landscapes, and unpredictable future—necessitates them to implement these 5 pillars of learning:
- Digital Transformation
- Human Cognition Improvement
- Man and Machine Relationship
- Expanded Ecosystems
- Management Innovation
1. Digital Transformation
Traditional organizations—that are dependent on structures and human involvement in decision making—use technology to simply execute a predesigned process repeatedly or to gain incremental improvements in their existing processes. The Next-generation Learning Organizations (NLOs), in contrast, are governed by their aspiration to continuously seek knowledge by leveraging technology. NLOs implement automation and autonomous decision-making across their businesses to learn at faster timescales. They design autonomous systems by integrating multiple technologies and learning loops.
2. Human Cognition Improvement
NLOs understand AI’s edge at quickly analyzing correlations in complex data sets and are aware of the inadequacies that AI and machines have in terms of reasoning abilities. They focus on the unique strengths of human cognition and assign people roles that add value—e.g., understanding causal relationships, drawing causal inference, counterfactual thinking, and creativity. Design is the center of attention of these organizations and they utilize human imagination and creativity to generate new ideas and produce novel products.
3. Man and Machine Relationship
Next-generation Learning Organizations (NLOs) make the best use of humans and machines combined. They utilize machines to recognize patterns in complex data and deploy people to decipher causal relationships and spark innovative thinking. NLOs make humans and machines cooperate in innovative ways, and constantly revisit the deployment of resources, people, and technology on tasks based on their viability.
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A large majority of organizations rarely focus on gathering and utilizing customer-centric knowledge. So much so that they even introduce a product without having vital insights on the customer and their unmet needs, and they are often clueless about them. Consequently, many product development initiatives fall flat as managers struggle to filter and evaluate ideas.
Most organizations, today, are developing initiatives around Customer Experience Strategy and Customer Journey Mapping. Customer-centric Organizations are deeply focused towards value creation for their customers. They understand the unique customer insights needed to make customer-centric decisions, are able to gather those customer insights, and are aware of the way to utilize the insights in creating value for their customers. By using customer insights, Customer-centric Organizations drive their product innovation success rate significantly higher than the industry average.
In order to develop this capability, organizations need to first utilize a customer-centric research process to gather the customer insights required to drive value creation. This is accomplished when:
- They know the desired unique customer insights needed to make customer-centric decision.
- They are able to gather the required customer insights.
- They realize the proper time and way to utilize the insights in making value creation focused business decisions.
Building a Customer-centric Culture of Innovation warrants a methodical approach. A potent approach to building such a culture of innovation encompasses 3 key phases:
- Qualitative Insights: Apply Customer-Centric Fundamentals - The first phase commences by organizing an intensive day-long workshop for each cross-functional product team. The teams engage in a unique customer journey where they employ a “jobs-to-be-done” lens to analyze their market, and identify valuable, qualitative customer insights needed to drive customer-centric decision making.
- Quantitative Insights: Quantify Opportunities that Exist - This phase entails conducting quantitative research to rank the most critical customer insights needed to develop customer-centric data model. The insights available through this data set help the company in making customer-centric business decisions for years to come.
- Implementation: Leverage New Customer Insights for Growth - In this phase, managers and employees across the organization are trained on utilizing the insights to devise market and product strategies, and to encourage customer-centric growth.
Qualitative Insights: Apply Customer-Centric Fundamentals
The first phase commences by organizing an intensive workshop for each cross-functional product team. It is typically a day-long session where the teams engage in a unique customer journey. They employ a “jobs-to-be-done” lens to analyze their market and identify valuable, qualitative customer insights needed to drive customer-centric decision making. The qualitative customer insights developed during the first phase serve as an indispensable, long-term guide in the journey to a customer-centric mindset.
During phase I, each product team is trained on customer-centric philosophy in a workshop settings. The workshop participants participate in qualitative research discussions designed to obtain critical customer information and fresh insights. Upon completion of the initial phase, the product team is able to develop a shared innovation vocabulary and gather customer insights to make customer-centric marketing and product development decisions.
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Over the last decade, companies have made greater strides in retooling their innovation 
engines. Leaner and faster, products are developed from concept and delivered to customers in record time. But even a Ferrari does not know where to drive.
There are plenty of opportunities to enhance execution. Yet, inspiration and insights are increasingly getting to be a challenge for innovation executives. Innovation executives know that a new approach is needed. To boost performance to the next level, executives need to simultaneously loosen and tighten approaches to innovation management. We must start looking outward and opening ourselves to customers, collaborators, and our own creative side. At the same time, we need to tighten it through continuous improvement by attempting to embed an innovation culture to the organization.
Intelligent Innovation is considered a comprehensive approach that can support the next phase of Innovation Performance Improvement. The practice of Intelligent Innovation must complement the strengths of the current control regime to achieve innovative excellence.
Why Intelligent Innovation
Innovation Performance Improvement has been driven by initiatives that are highly analytical, inward-looking, and focused largely on retooling the innovation engine. There are 3 Stages of Performance Improvement. First is Management Control where innovation was treated like any other process and controlled with traditional management techniques. The second is Cost Control where innovation is redesigned to minimize cost. And the third is Profit Control where innovation was managed as projects with each project needing to be profitable in its own right.
Each successive stage built on the previous one. These stages are called “control regimes.” While these have built a critical foundation for future progress, they cannot deliver the desired results on their own.
To boost performance to the next level, Intelligent Innovation must be put in place. Intelligent Innovation completes the 4 Stages of Innovation Performance Improvement.
Intelligent Innovation and its 4 Dimensions
Intelligent Innovation cuts across 4 critical dimensions. It complements the strengths of the current control regime with excellence in 4 dimensions.
1st Dimension: Customer Insight
Customer Insight is considered the most important performance improvement level. It improves customer understanding with regards the evolving needs and critical priorities of customers. It can also increase customer participation in the innovation process.
Understanding what the customers want is important to drive ideation and execution.
According to Henry Ford, “If I’d only listened to customers, I’d have developed faster horses.”
By listening to customers, the more we learn what our customers need or want. And by knowing what our customers want, our organization will be in a better position to uncover tacit priorities that will fuel the most attractive development and innovative options.
2nd Dimension: Global Network
Global Network allows intelligent innovators to leverage dispersed knowledge across the globe. Each site or external partner is integrated into a seamlessly managed innovation network.
By having a Global Innovation Network, our organization will have the impetus to grow faster than its market.
3rd Dimension: Future Foresight
A well-tuned future trends capability can be a powerful strategic and competitive weapon in today’s global environment. It can identify tomorrow’s market opportunities and risks to drive innovation. Detailed and imaginative, this envisions the future competitive environment which better prepares our organization how to approach it.
4th Dimension: Innovation Organization
A critical element of success is the way organizations foster an innovation culture. An Innovation Organization carries within its DNA the intelligent innovation principles – senior management commitment to innovation, knowledge sharing, cross-functional teaming, freedom to pursue ideas, and innovation-friendly incentives. These are all embedded in the organization.
Intelligent innovators must work hard to unlock the innovation potential within the organization and use the tools available to direct organizations to take advantage of market opportunities. With a clear destination in mind, an innovative organization can accelerate its potential to gaining the winning edge when it comes to innovation, customer excellence, and profit.
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