Creating a culture of innovation is not easy. Consider the findings of a study conducted by Harvard Business Review Analytic Services in association with the Genpact Research Institute. Nearly half of respondents (48 percent) cited an inability to experiment quickly as a major obstacle to accelerating the pace and impact of digital transformation. Concern about this inability polled far higher than difficulties with change management (41 percent), legacy systems (39 percent) and risk aversion (38 percent).
A bimodal transformation approach is one potential strategy to instill innovation, provide a less-risky way to experiment, and encourage change. Tactically speaking, bimodal transformation allocates technology and process teams and resources into two groups – one tasked with a more traditional approach with incremental efficiency improvements, the other pledged to pursue rapid-paced, digitally disruptive innovation.
For companies considering a bimodal transformation project, it is important to keep in mind these five common pitfalls that can impede success:
1. The bimodal plan pushes ahead without first fully considering the objective(s) and having top leadership support. Many companies mistakenly focus on understanding how a bimodal approach is supposed to work without considering why it is mission critical to their company’s success. There must be top-down understanding of the goal, with sponsorship from the CEO and board, and buy-in from the rest of the executive leadership, since the project will eventually affect their business. There must also be clear objectives, with targets to measure results. For instance, if the goal is to drive a culture of incremental improvements, or to run a few programs to develop some innovative solutions, then bimodal may not be the right approach. On the other hand, if the objective is to drive an enterprise-wide agenda, to innovate at scale, and to fundamentally change how an organization designs, builds, and goes to market with its offerings, then bimodal is the way to go. In absence of clarity around the key objective, companies may fall into the trap of embarking on this disruptive exercise with no clear outcomes. Consequently, teams on either track may be quicker to accept failure because they can blame the bimodal approach as the problem, as opposed to being held accountable for specific goals.
2. Responsibility for transformation is viewed solely within the context of technology. A truly bimodal effort spurs innovation at scale across an enterprise, starting with an end-to-end view of business processes and not just in the technology deployed. The transformation potential will be largely – if not entirely – wasted if all functions do not recognize they play a vital role in “operationalizing” the end goals of the bimodal team. Business teams must participate at every level – to conceptualize, design, develop, iterate, go to market, etc. They will accept outcomes only if they are equal stakeholders. It also important to establish governance with business stakeholders so that the project’s charter is adhered to and progress tracked.
3. There is not full understanding of the required IT investments and new design principles needed. A bimodal approach requires different thinking about investments, resources, and methods used for every part of the project. The necessary technology commitments are not always limited to just the digital tools being developed. There may be a need to invest in a more open IT and operating ecosystem to give the fast-track group freedom to download, install, and experiment with the latest technologies. Also, physical facilities need digital hotspots that allow unfettered interaction with talent from other organizations. Process change also requires new methods: Principles such as design thinking, high-velocity engineering, and willingness to “fail forward” must be embraced. It is important to identify and prioritize the groups that work directly with the fast-track group and also up-skill them on pertinent design principles.
4. The change management program does not drive a true culture shift. Change management is important with any transformation; however, a bimodal approach ups the ante and requires a complete mind set change since it drives a fundamentally different way of working during the project, as well impacting the business going forward. To foster acceptance across rest of the organization and avoid misunderstanding among sections of the workforce that might misconstrue the project as an exercise that grants exclusive privileges to the fast-track group, it is important to drive sustained education around the rationale of bimodality. Process change often must be carried through every part of the organization – from the R&D and engineering teams that may directly benefit from new speed and agility when developing new products, to other operations that help with delivery, and lastly, to support functions such as finance, human resources, communications, strategy, marketing, etc. Moreover, it is critical to address the culture shift needed for the end game. Companies cannot run two divergent tracks forever. For change management to work, and bimodal transformation to be successful, the project team must plan ahead on how to take innovation initiatives that are mature and incorporate them into mainstream enterprise processes.
5. Talent management is viewed myopically. Companies need to resist the temptation to confine the search for talent for a bimodal project to the personnel available in-house. There also should be a program to regularly cross-pollinate both tracks with talent each from the other, thus ensuring more effective innovation outcomes. Likewise, the innovation mindset should be on product and not IT; on agile sprints to a minimum viable product and not a waterfall progression; on advanced digital technology and not ERP/CRM/legacy technology; and on operating in a digital ecosystem of start-ups, partners, venture capitalists, etc. In such an environment, talent might leverage other intellectual property rather than building everything on your own. A bimodal project may likely need talent infusion from the outside, and hence a readiness to make those necessary investments.
A bimodal approach to transformation has tremendous potential to help drive rapid innovation while limiting risk to the core businesses associated with a massive change-management effort. Yet, given the two-track methodology, it is more critical than ever that companies stay focused on a well-defined project plan and keep sight of any potential impediments to success.