On The Horizon Weekly – Healthy Innovation

Innovation Acceleration | Improvement Environments | Libra Updates | Amazon’s Reach

New York NY 2019-07-09 – Both new essays On The Horizon published last week are about creating organizations that can innovate and implement change. Elsewhere, there is news and new thinking about two of our regular platform ecosystems subjects – Facebook and Amazon.

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The Latest from On The Horizon

Platform Ecosystems as Innovation Acceleration  Stowe Boyd reviews a report from Accenture that makes use of a large-scale survey of global C-level execs on how they’re scaling digital innovation initiatives. Accenture identified best practices by looking at those companies that achieved an above-expected “return on digital investement” (RODI). Their secret? Effectively scaling their pilot projects.

That’s not easy, as Stowe recounts:

The four biggest challenges to scaling:

  1. Defining digital value, from the top down -- When top leaders fail to align on what they want to deliver to customers, things don't come together.

  2. Aligning with middle management -- When leaders can't convey the vision to middle managers, things don't come together.

  3. Syncing talent pools with IT assets -- many in the industries surveyed are hampered by aging or obsolete technologies which the rising digitalistas find poor for digital transformation. Meanwhile, existing middle and senior managers are not up to speed on new technologies.

  4. Positioning in-house innovations to win in the digital ecosystem Manufacturers need to get up to speed on the ecosystem economy, and how to participate in that new world order. At the same time, employees worry that outsider will displace them.

The secrets to success, according to Accenture’s analysis:

How do Champion succeed when others fail?

  1. Define the value that will guide innovation efforts — Champions define goals clearly, narrow opportunities, and direct innovation efforts to meet the goals.

  2. Focus on internal organizational change and external digital value — Champions blend organizational change and digital transformation, a so-called ambidextrous organization. ‘Ambidexterity enables an organization that continuously uses rapidly maturing digital technologies to grow its core and taps emerging technologies to develop and scale new endeavors.’

  3. Build in-house innovation factories with targeted influence — When a proof of concept has been developed within an autonomous group, Champions blend members of the autonomous group and the larger organization to foster organic adoption and learning. They also link the new group to the company’s profit and loss, so they can learn the return on digital investment.

  4. Find out what enables innovation in each business function — Champions are much better at matching ‘enablers’ — applications, platforms, and analysis tools — that are well-suited to business functions.

The authors offer Haier as an exemplar of successful innovation at scale.

Stowe concludes:

Champions generally started preparing the ground for their transition into ambidextrous organizations a decade or more in the past. But the Accenture researchers believe that what Champions do can be adopted by other not-so-advanced companies.

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Environments to Encourage Healthy Improvement: What We can Learn from Haier On The Horizon Hong Kong-based contributors  Jo Wong and Daniel Szuc of Apogee interviewed Dr. Julia Wang from the Peter F. Drucker Academy in that city about how Drucker’s philosophy might be reflected by Haier Group’s theory and execution.

Understanding how a successful platform organization works will help companies thrive in fast-changing markets. Such an organization resembles an ecosystem, so we will use the metaphor of a “healthy living system” to help describe it. In this article, we will illustrate why good examples of successful transformations are hard to find and why the Haier model may be a challenge to duplicate.

Keys to the Haier model for change include:

  • A holistic focus on issues, and an adaptive, resilient system

  • Establishing the proper conditions for learning and for change

  • Time and reinforcement for adopting new mindsets

  • Adopting a continuous learning and adapting system

It often takes time to set up an organization that can learn and implement change:

Dr Wang noted, “Mr Zhang has been preparing people for over 10 years by changing their mindset slowly. When people's mindset is ready, when they see change and they see it as an opportunity and not as a threat.”

Continuing:

“The most powerful element Haier has over their counterparts is their agility to change and I have not seen this in other organizations including the high tech industry,” according to Dr Wang.

Learning environments that allow people the time they need to be able to see different perspectives and understand systemic complexity by:

  • listening to other people’s perspectives

  • probing to see what we may not immediately see

  • zooming out to gain greater perspective

  • zooming in on the details within the bigger picture

  • confronting the issues to help solve problems

  • connecting the dots to gain focus

  • knowing what we need to work on and why

  • prioritizing what work to focus on now

  • focusing on that work and its meaning.

Perhaps we need to inspect the term “change” and consider replacements like “continuous learning” with more consideration for the holistic perspective in reference to people’s mind, heart and body.

Perhaps we should consider change not as a “one off” but as an ever-evolving environment that is constantly attracting a diverse and hybrid set of people to promote the regular critique of the current state and better identify future states on the horizon.


Elsewhere

When Facebook launched its Libra cryptocurrency ecosystem a few weeks ago, I linked to a great number of published thinking on it. I’m not the only one who is skeptical, but Facebook appears to be serious about enabling both a remittance system for the unbanked and building out the payment and digital wallet capabilities of Messenger and WhatsApp, a la WeChat, which is a major force in China.

In Facebook, Libra, and the Long Game tech analyst Ben Thompson gives a more pro-Facebook analysis than many. He notes that Facebook will not completely dominate the ecosystem, and contrasts it approach with creating a “Facebook Coin” that would be more like Bitcoin.

Meanwhile, in Maxine Waters threatens Facebook’s cryptocurrency plans Politico describes how U.S. legislators are already trying to get Facebook to hold off on development.

And the Financial Times points out that a potential deal-breaker, the lack of support from banks, is looking bad for the ecosystem: Banks in no rush to join Facebook’s crypto project.

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Another one of the biggest platform ecosystem players, Amazon generated a variety of coverage recently.

Kohl’s Is Betting on Amazon Returns to Drive Sales the New York Times talks to the department store, an ecosystem participant On The Horizon described in The Market Value of Joining an Ecosystem.

Buzzfeed gives it the old college try, but concedes it probably hasn’t covered all of Amazon’s tentacles: These Are All the Businesses You Never Knew Were Owned by Amazon. But it’s a long list that’s particularly revealing on Amazon’s own brands. You know, the ones that sometimes compete with its ecosystem partners.

But it’s not all about domination. Amazon's Alexa for Business reportedly earned less than $300,000 in its first year has Business Insider sourcing the Information on the relative lack of monetary success of its voice-based virtual assistant infrastructure.

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Avis Revamps IT to Stay Relevant in Changing Industry the Wall Street Journal talks with the big car rental service about how it is shifting its internal IT platform to accommodate a more open ecosystem. It needed to re-set business processes and objectives before the tech/data fixes. Now Avis is using more of Amazon Web Services, and working with Waymo and Lyft on autonomous vehicles.

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IoT guru Stacey Higginbotham interviews Emerson and others and concludes We’re far off from everything being delivered as a service.

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In How To Build An Ecosystem Strategy Greg Satell rehashes some of the old tech industry examples, but he also points out that it’s increasingly important for participants to participate in some emerging “convening spaces” housed by key industry organizations.


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