Innovation Management in Tech Enterprises

I was honored to be featured in the Fall 2023 issue of MIT Sloan Management Review, where I was invited to write on the subject of #innovation #governance. The article features case studies & insights from Amazon, BASF, Citi, and The New York Times. In my work advising enterprises on their #digitaltransformation journeys, I have discovered one of the biggest barriers to organizational change is the unthinking carry-over of “BAU” (business-as-usual) governance. Rules, procedures, and processes that were developed over the years to manage the core business (well-known, long-established, and low uncertainty) are thoughtlessly applied to teams that have been tasked with testing and discovering new paths to growth and innovation. The result is familiar: large organizations putting up roadblocks in front of their own best people as they try to push the enterprise forward and adapt to digital change. In my article for MIT SMR, I explain why governance matters and explore five critical ingredients that I have seen in every company that succeeds in its digital transformation: 👯 Designing innovation TEAMS with the right composition, skills, decision rights, and accountability. 👀 Overseeing those teams through BOARDS that advise a portfolio of similar new ventures. 🚦 GREEN-LIGHTING new ventures with minimal resources and minimal deliberation. 💰 FUNDING those new ventures in a highly iterative process that is unlike traditional budgeting. ⛔ EXITING most ventures with a process of smart shutdowns that free up resources, capture learning, and redeploy talent for better opportunities. This article is adapted from my new book, “The Digital Transformation Roadmap: Rebuild Your Organization for Continuous Change.” https://amzn.to/41U85dl ▶▶ READ the MIT ARTICLE at: https://lnkd.in/eMs6_-Pn (a free account may be required)

Innovation isn't just about funding or flashy initiatives—it's about culture. Want your company to innovate like a startup? Here's your ultimate checklist to drive meaningful change: ✅ Embrace Risk & Reward: Create an environment where bold ideas are celebrated, and failure is seen as a step toward success. Google’s 20% rule brought us Gmail—what could yours achieve? ✅ Foster External Partnerships: Collaborate with startups and VCs to spark fresh ideas. Programs like Johnson & Johnson’s JLABS are proof that partnerships drive breakthroughs. ✅ Streamline Processes: Overcome bureaucracy and empower small, agile teams to move fast. Think Amazon's Two-Pizza Rule. ✅ Rethink Training: Replace traditional programs with real-world, entrepreneurial approaches like GE's FastWorks. ✅ Lead the Change: Innovation starts at the top. Don’t let initiatives become “innovation theater.” Show your team it’s safe to experiment, learn, and succeed.

Crawling, walking, and running...Asking a team not used to large-scale (or macro) innovation can quickly lead to disaster. Instead, I suggest infusing into your culture the concept of micro innovations (crawling) which lead to larger (walking) and finally strategic (running) gains. But, what are micro innovations? These are tiny innovations that have a massive impact on a product or workflow. It's like a low- or no-cost value creating jackpot. An obvious micro innovation example can be seen in WhatsApp. Just by tweaking how a message could be sent and integrating voice messages the company was able to elevate its product to one that far exceeded its customer's expectations. The same can be said for autocorrect and email filtering— two features that were initially considered minor-add ons. But integrated autocorrect has saved countless hours in re-typing (and some would argue eventually grew into what we now call AI). While micro innovations may seem like randomly hitting the innovation jackpot, there's actually a ways to create an environment in which they are more likely to happen. One common denominator in micro innovations is cross-departmental collaboration. A feature requested by accounting in the enterprise CRM software marketing uses may be exactly what every user of that CRM never knew they needed. Not just in tech, but in all industries, the best micro innovations usually aren't seen as innovations at all but rather simply addressing pain points. Crucially, the vast majority of micro innovations come from workers and team members themselves. An exception to this would be when Steve Jobs carried a prototype iPhone in his pocket and saw how scratched up the screen got from the keys that were also in his pocket. Now, every smart phone has scratch-resistant glass. But it's far more common for tweaks and adjustments to stem from the experience of doing the on-the-ground work. Remember there are two kinds of micro innovations. Internal micro innovations happen with an organization. Think process automation, new tool adoption, process or communication improvements. External micro innovations are customer facing, things like the WhatsApp and autocorrect examples. Too often, internal micro innovations are seen as useful only within an organizational context, but this may not be the case. If an employee's life is easier because of a tweak in a software platform or device, it's at least worth asking if there's an analogous external version of that improvement that can be integrated into a product or customer service funnel. Micro innovations tend to be organic, but that doesn't mean leaders are powerless in creating an environment in which they can grow. How is your organization addressing micro vs macro innovations and are you seeing worthwhile outcomes?

💡 𝗜𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻 𝗰𝗮𝗻’𝘁 𝗯𝗲 𝗹𝗲𝗳𝘁 𝘁𝗼 𝗰𝗵𝗮𝗻𝗰𝗲 — 𝗼𝗿 𝗰𝗼𝗻𝗳𝗶𝗻𝗲𝗱 𝘁𝗼 𝗮𝗻𝗻𝘂𝗮𝗹 𝗽𝗹𝗮𝗻𝗻𝗶𝗻𝗴 or to R&D Labs. Digital Innovation Needs Two Engines: 𝗧𝗼𝗽-𝗱𝗼𝘄𝗻 𝗱𝗶𝗿𝗲𝗰𝘁𝗶𝗼𝗻. 𝗕𝗼𝘁𝘁𝗼𝗺-𝘂𝗽 𝗲𝘅𝗽𝗲𝗿𝗶𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻. In today’s AI-first world, innovation isn’t optional — and it’s not just a strategy. It’s a system of small, rapid, high-impact experiments that happen across all levels of the enterprise. ✅ Use 𝗱𝗶𝗴𝗶𝘁𝗮𝗹 𝘁𝗼𝗼𝗹𝘀, 𝗮𝘂𝘁𝗼𝗺𝗮𝘁𝗶𝗼𝗻, 𝗮𝗻𝗱 𝗮𝗴𝗲𝗻𝘁𝘀 ✅ Leverage 𝗔𝗜 𝗮𝗻𝗱 𝗱𝗮𝘁𝗮 𝗮𝗹𝗿𝗲𝗮𝗱𝘆 𝗶𝗻 𝘆𝗼𝘂𝗿 𝗲𝗰𝗼𝘀𝘆𝘀𝘁𝗲𝗺 ✅ Empower 𝘁𝗲𝗮𝗺𝘀 𝘁𝗼 𝗯𝘂𝗶𝗹𝗱, 𝘁𝗲𝘀𝘁, 𝗮𝗻𝗱 𝗹𝗲𝗮𝗿𝗻 — 𝗳𝗮𝘀𝘁 But more importantly — make 𝗶𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻 𝗲𝘃𝗲𝗿𝘆𝗼𝗻𝗲’𝘀 𝗷𝗼𝗯, not just IT or “innovation teams.” 🔁 𝗪𝗵𝗮𝘁 𝗱𝗼𝗲𝘀 𝘁𝗵𝗶𝘀 𝗹𝗼𝗼𝗸 𝗹𝗶𝗸𝗲 𝗶𝗻 𝗮𝗰𝘁𝗶𝗼𝗻?  • Employees piloting AI copilots to improve productivity  • Teams experimenting with automation to remove daily friction  • Leaders launching agent pilots to streamline decision-making  • Customer-facing teams exploring micro-personalizations with AI  • Cross-functional squads building safe-to-fail experiments with clear success criteria 𝗔𝘀 𝗹𝗲𝗮𝗱𝗲𝗿𝘀, 𝗼𝘂𝗿 𝗿𝗼𝗹𝗲 𝗶𝘀𝗻’𝘁 𝘁𝗼 𝗿𝘂𝗻 𝗲𝘃𝗲𝗿𝘆 𝗲𝘅𝗽𝗲𝗿𝗶𝗺𝗲𝗻𝘁 — 𝗜𝘁’𝘀 𝘁𝗼 𝗱𝗲𝘀𝗶𝗴𝗻 𝘁𝗵𝗲 𝗲𝗻𝘃𝗶𝗿𝗼𝗻𝗺𝗲𝗻𝘁 𝘄𝗵𝗲𝗿𝗲 𝗶𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻 𝗵𝗮𝗽𝗽𝗲𝗻𝘀 𝗲𝘃𝗲𝗿𝘆𝘄𝗵𝗲𝗿𝗲. Innovation isn't about flashy ideas or big launches. It’s about 𝗰𝗼𝗻𝘀𝗶𝘀𝘁𝗲𝗻𝘁 𝗲𝘅𝗽𝗲𝗿𝗶𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻 𝘁𝗵𝗮𝘁 𝗰𝗼𝗺𝗽𝗼𝘂𝗻𝗱𝘀 𝗶𝗻𝘁𝗼 𝘁𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻. If your org isn’t innovating at every layer — you’re falling behind at the top. 💬 What’s the last digital experiment your team shipped? #DigitalInnovation #AIagents #TransformationLeadership #AIFirst #EnterpriseAI #DigitalLeadership #FutureOfWork #CIOInsights #FutureCIOClub #RajPolanki