Category Archives: Innovation

The Human Role in Connecting AI-Generated Ideas

Innovation Through Synthesis

The Human Role in Connecting AI-Generated Ideas

GUEST POST from Chateau G Pato
LAST UPDATED: January 18, 2026 at 1:01PM

We are currently witnessing a massive explosion in “generative output.” With the rise of Large Language Models and sophisticated AI design tools, the cost of generating a new idea has effectively dropped to zero. We can now prompt a machine to give us a thousand product concepts, marketing taglines, or business models in a matter of seconds. But here is the catch: An abundance of ideas is not the same as an abundance of innovation.

True innovation has always been a human-centered endeavor. It requires more than just the raw material of thought; it requires synthesis. Synthesis is the act of combining disparate elements to form a coherent whole that is greater than the sum of its parts. In this new era, the human role in the innovation lifecycle is shifting from the creator of components to the synthesizer of systems. We are the architects who must decide which of the AI’s bricks actually belong in the cathedral.

“AI can give us the dots, but only the human heart and mind can see the constellation. Our value in the future won’t be measured by the ideas we generate, but by the meaningful connections we forge between them.” — Braden Kelley

The “Lived Experience” Gap

AI is a master of probability, not a master of meaning. It can suggest a connection between a fitness app and a sustainability initiative because they share linguistic proximity in its training data. However, it cannot understand the visceral frustration of a user who feels guilty about their carbon footprint while trying to stay healthy. It cannot feel the tension of a boardroom or the subtle cultural nuances of a specific community.

Humans bring contextual intelligence to the table. When we look at a list of AI-generated suggestions, we filter them through our lived experience. We perform a “reality check” that machines cannot yet replicate. This synthesis is where value is created—it is where we take the “what” provided by the AI and infuse it with the “why” and the “how” that makes it resonate with other humans.

Case Study 1: The Adaptive Urban Planning Initiative

The Opportunity

A European mid-sized city sought to redesign its public transit nodes to better serve a post-pandemic workforce. They used generative AI to simulate millions of traffic patterns, pedestrian flows, and economic zoning configurations. The AI produced three hundred potential layouts that maximized efficiency and minimized commute times.

The Synthesis

The urban planning team, rather than picking the most “efficient” AI model, held a human-centered synthesis workshop. They realized the AI had completely ignored the social fabric of the neighborhoods. One AI-suggested layout destroyed a small, informal park where elderly residents gathered. Another removed a historical landmark to make room for a bus lane. The humans synthesized the AI’s data on flow efficiency with their own knowledge of community belonging. They “stitched” parts of five different AI models together to create a plan that was 85% as efficient as the top AI model but 100% more culturally sustainable.

The Move from “Producer” to “Editor-in-Chief”

For innovators, this shift can be uncomfortable. For decades, we were the ones staring at the blank page. Now, the page is never blank; it is often too full. This requires a new set of skills that I often speak about in my keynotes: Discernment, Empathy, and Strategic Intent.

As the Innovation Speaker Braden Kelley, I often remind audiences that if everyone has access to the same AI tools, then the “raw ideas” become a commodity. The competitive advantage moves to those who can curate and combine. We must become Editors-in-Chief of Innovation. We must look at the “noise” generated by the machines and find the “signal” that aligns with our organizational values and human needs.

Case Study 2: Reimagining Consumer Packaging

The Challenge

A global CPG (Consumer Packaged Goods) company wanted to create a plastic-free bottle for a high-end shampoo line. The AI generated thousands of structural designs using mycelium, seaweed derivatives, and pressed paper. Many were beautiful but physically impossible to manufacture or too expensive for the target demographic.

The Synthesis

The design team didn’t discard the “impossible” ideas. Instead, they used analogous thinking—a key component of human synthesis. They looked at an AI-generated mycelium structure and connected it to a traditional Japanese wood-binding technique they had seen in an art gallery. By synthesizing the machine’s material suggestion with an ancient human craft, they developed a hybrid packaging solution that was both biodegradable and structurally sound. The AI provided the ingredient (mycelium), but the human provided the recipe (the binding technique).

Protecting the Human Element

To avoid “Innovation Debt,” organizations must ensure that their push for AI adoption doesn’t bypass the synthesis phase. If we simply “copy-paste” AI outputs into the real world, we risk creating a sterile, disconnected, and ultimately unsuccessful future. We must fund the time required for humans to think, debate, and connect. Synthesis is not a fast process, but it is the process that ensures meaningful change.

As we move forward, don’t ask what AI can do for your innovation process. Ask how your team can better synthesize the abundance that AI provides. That is where the future of leadership lies.

Human-Centered Synthesis FAQ

What is ‘Innovation Through Synthesis’ in the age of AI?

Innovation through synthesis is the human-driven process of connecting disparate data points, cultural contexts, and AI-generated suggestions into a cohesive, valuable solution. While AI provides the components, humans provide the “glue” of empathy and strategic intent.

Why can’t AI handle the synthesis phase alone?

AI lacks “lived experience” and lived context. It can find patterns but cannot truly understand “why” a specific connection matters to a human user emotionally or ethically. Synthesis requires discernment, which is a fundamentally human cognitive trait.

How should organizations change their innovation workflow to accommodate this?

Organizations should pivot from using AI as an “answer machine” to using it as an “ingredient supplier.” The workflow must prioritize human-led workshops that focus on connecting AI outputs to real-world problems and organizational values.

BONUS: The Synthesis Framework

Here is a structured Synthesis Framework designed to help your teams move from a pile of AI outputs to a high-value, human-centered innovation.

In my work as a human-centered change and innovation thought leader, I’ve found that teams often get paralyzed by the sheer volume of AI suggestions. Use this four-step methodology to transform “raw ingredients” into “meaningful solutions.”

AI Innovation Synthesis Framework

Step 1: Breaking the AI Monolith (Deconstruction)

Don’t look at an AI-generated idea as a “take it or leave it” proposal. Instead, deconstruct it into its base elements: The underlying technology, the business model, the user interface, and the value proposition.

Action: Ask your team, “What is the one ingredient in this suggestion that actually has merit, even if the rest of the idea is flawed?”

Step 2: Applying the Lived Experience (Cultural Filtering)

This is where human empathy takes center stage. Run the deconstructed elements through the filter of your specific user base. AI can’t feel the “unspoken” needs or the cultural taboos of your audience.

Action: Engage the focus on Human-Centered Change™ mindset that we encourage here to ask: “Does this connection solve a real human friction, or is it just technically possible?”

Step 3: Connecting Across Domains (Analogous Layering)

AI is limited by the data it has seen. Humans have the unique ability to layer insights from unrelated fields—like applying a hospital’s patient-flow logic to a retail checkout experience.

Action: Force a connection between an AI “dot” and a completely unrelated hobby, industry, or historical event known to the team. This is where true synthesis happens.

Step 4: The Architect’s Final Design (Strategic Stitching)

Finally, stitch the validated ingredients together into a new, coherent vision. Ensure the final output aligns with your organizational purpose and long-term strategy, effectively avoiding Innovation Debt.

Action: Create a “Synthesis Map” that visually shows how multiple AI inputs were combined with human insights to create the final solution.

Remember: When you search for an innovation speaker to guide your team through this transition, look for those who prioritize the human role in the loop. The machines provide the noise; we provide the music.

Extra Extra: Because innovation is all about change, Braden Kelley’s human-centered change methodology and tools are the best way to plan and execute the changes necessary to support your innovation and transformation efforts — all while literally getting everyone all on the same page for change. Find out more about the methodology and tools, including the book Charting Change by following the link. Be sure and download the TEN FREE TOOLS while you’re here.

Image credits: Google Gemini

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Innovation Debt – The Hidden Cost of Postponing Necessary Change

Leave a reply

LAST UPDATED January 18, 2026 at 11:33AM

Innovation Debt - The Hidden Cost of Postponing Necessary Change

GUEST POST from Art Inteligencia

In the world of software development, we often speak of “technical debt” — the shortcuts and quick fixes taken in the short term that inevitably lead to greater costs and complications down the line. But there’s a broader, more insidious form of debt plaguing organizations today: Innovation Debt. This is the accumulating cost and lost opportunity that arises when an organization repeatedly postpones necessary changes, upgrades, and investments in new ideas, technologies, and processes. It’s the silent killer of future relevance, slowly eroding competitive advantage and stifling growth.

As a human-centered change and innovation thought leader, I see Innovation Debt not just as a financial burden, but as a cultural one. It represents a failure to prioritize continuous learning, adaptability, and the human element in an ever-evolving market. It’s the consequence of a mindset that views innovation as an optional expense rather than a core strategic imperative.

“Innovation Debt is the interest you pay on yesterday’s excuses. Every time you say ‘not now’ to a valuable new idea, you’re signing a promissory note against your future relevance. Eventually, the interest compounds into obsolescence.” — Braden Kelley

How Innovation Debt Accumulates

Innovation Debt isn’t usually the result of a single, catastrophic decision. Instead, it accrues gradually through a series of seemingly minor choices:

Deferred Technology Upgrades: Sticking with legacy systems because “they still work” instead of investing in modern, agile platforms.
Underinvesting in R&D: Cutting innovation budgets during tough times, sacrificing future growth for short-term profits.
Resisting Process Modernization: Clinging to outdated workflows and bureaucratic structures that hinder efficiency and adaptability.
Neglecting Skill Development: Failing to upskill employees in new technologies or methodologies, leading to a knowledge gap.
Ignoring Customer Feedback: Dismissing early signals of changing customer needs or market trends.
Stifling Experimentation: A culture that punishes failure discourages risk-taking, leading to a lack of new ideas being tested.

Each of these decisions, individually, might seem pragmatic. Collectively, they create a mountain of debt that becomes increasingly difficult and expensive to repay.

The Cost of Ignoring Innovation Debt

The consequences of Innovation Debt are far-reaching and impact every facet of an organization:

Reduced Competitiveness: Rivals with less debt can innovate faster, capture market share, and respond to customer needs more effectively.
Increased Operational Costs: Legacy systems are expensive to maintain, inefficient processes waste time and resources, and reactive changes are always more costly than proactive ones.
Declining Employee Morale: Talented individuals become frustrated by outdated tools, slow decision-making, and a lack of opportunity to make an impact, leading to attrition.
Loss of Customer Loyalty: Customers seek out companies that offer modern experiences, relevant solutions, and a commitment to continuous improvement.
Erosion of Brand Value: A company seen as stagnant or behind the curve loses its innovative edge and appeal.

Case Study 1: The Retail Giant and Digital Transformation

The Situation

For decades, a dominant retail chain prided itself on its vast brick-and-mortar presence and traditional supply chain. As e-commerce began to emerge, leadership acknowledged the shift but consistently underinvested in its online capabilities. Decisions were made to “wait and see,” to make incremental website improvements rather than a full digital transformation.

The Innovation Debt Accrues

This deliberate delay led to massive Innovation Debt. Their online platform became clunky, customer data was siloed, and their supply chain remained optimized for physical stores, not rapid home delivery. Competitors, who had invested early and iteratively, built robust e-commerce ecosystems, personalized shopping experiences, and efficient last-mile delivery networks.

The Painful Repayment

When the market eventually forced their hand, the cost of repayment was staggering. They had to pour billions into refreshing their entire digital infrastructure, acquire new logistics capabilities, and overhaul their internal culture. This wasn’t just about money; it was about lost market share, a frustrated customer base, and the arduous task of catching up from a decade behind. Their debt payment was steep, painful, and almost too late.

Case Study 2: The Established Technology Company and Cloud Migration

The Situation

A venerable software company, known for its on-premise solutions, saw the rise of cloud computing. Their engineering teams advocated for a strategic shift, but leadership, comfortable with recurring license revenues and fearing the complexity of migration, chose to delay a full-scale cloud transformation, opting instead for hybrid solutions and minimal SaaS offerings.

The Innovation Debt Accrues

The Innovation Debt rapidly compounded. Their competitors, born in the cloud or having migrated early, enjoyed faster deployment cycles, greater scalability, reduced infrastructure costs, and attracted top talent keen on modern tech stacks. The legacy company’s products became harder to integrate, less flexible, and increasingly less attractive to new enterprise clients. Their internal teams struggled with outdated development tools and deployment methods, leading to burnout and high turnover.

The Painful Repayment

Eventually, the company had to embark on a massive, multi-year cloud migration. The project was incredibly expensive, disruptive, and risked alienating existing customers. They lost key talent to competitors offering more forward-thinking environments. The cost of their Innovation Debt wasn’t just financial; it was a blow to their reputation as an industry leader and a severe drain on organizational energy and morale. They learned that delaying a fundamental architectural shift ultimately led to a forced, emergency overhaul.

Combating Innovation Debt: A Proactive Stance

Addressing Innovation Debt requires a proactive, human-centered strategy:

Prioritize Continuous Investment: View innovation as a non-negotiable operating expense, not a discretionary budget item.
Foster an Experimentation Culture: Encourage rapid prototyping and testing. Embrace a “failure budget” to learn quickly and cheaply.
Listen to the Edge: Empower employees closest to customers and emerging technologies to identify early signals of change.
Strategic Foresight: Regularly scan the horizon for disruptive trends and build scenarios for the future.
Agile Decision-Making: Streamline processes to allow for quicker pivots and adaptations to new information.

The choice is clear: either we proactively manage and invest in innovation, paying a small, continuous “interest” in the form of strategic R&D and continuous improvement, or we accumulate massive Innovation Debt that threatens our very existence. In today’s dynamic world, playing catch-up is a losing game. It’s time to pay your innovation dues before they bankrupt your future.

Frequently Asked Questions on Innovation Debt

Q: What is Innovation Debt?

A: Innovation Debt refers to the accumulating costs and lost opportunities that arise when an organization repeatedly postpones necessary changes, upgrades, or investments in new ideas, technologies, and processes. It’s the deferred payment for failing to innovate proactively.

Q: How does Innovation Debt manifest in organizations?

A: It manifests as outdated technology, inefficient processes, declining market relevance, decreasing employee morale, missed competitive advantages, and a reactive culture that struggles to adapt. Ultimately, it leads to higher operational costs and a loss of market share.

Q: What is the best way to address and prevent Innovation Debt?

A: Addressing Innovation Debt requires a proactive, human-centered approach. This includes fostering a culture of continuous learning and experimentation, making regular investments in R&D and employee skill development, building agile decision-making processes, and prioritizing strategic innovation initiatives even during times of stability. It’s about building a robust innovation system rather than just reacting to crises.

Bottom line: Futurology and future studies are not fortune telling. Skilled futurologists and futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.

Image credit: Pixabay

Sign up here to join 17,000+ leaders getting Human-Centered Change & Innovation Weekly delivered to their inbox every week.

The Failure Budget – A Practical Guide to Funding Iterative Learning

Leave a reply

LAST UPDATED January 17, 2026 at 9:33AM
The Failure Budget - A Practical Guide to Funding Iterative Learning

GUEST POST from Art Inteligencia

Every leader I speak with champions innovation. They talk about agile methodologies, design thinking, and fostering a culture of experimentation. Yet, when it comes to the actual budgeting process, the rhetoric often clashes with reality. Projects with uncertain outcomes—the very crucible of true innovation—are often starved of resources, deemed too risky, or simply not funded at all. This creates a fundamental disconnect: we praise the idea of learning from failure, but we rarely budget for it.

It’s time for a radical shift. As a human-centered change and innovation thought leader, I advocate for the implementation of a “Failure Budget.” This isn’t about celebrating incompetence; it’s about strategically allocating resources for iterative learning, accepting that some experiments will not yield immediate commercial success, and recognizing that the insights gained are an invaluable return on investment. It’s about funding exploration, not just exploitation.

“In innovation, the only true failure is the failure to learn. A ‘failure budget’ isn’t just about money; it’s about buying psychological safety for your teams, giving them permission to explore the uncomfortable truths that lead to breakthrough insights.” — Braden Kelley

Why the “Failure Budget” is a Strategic Imperative

Our traditional budgeting models are built for predictability and efficiency. They reward certainty and penalize deviations from planned outcomes. This framework is anathema to innovation, which thrives on uncertainty, iteration, and emergent discovery. Without a dedicated “Failure Budget,” several detrimental effects emerge:

Risk Aversion: Teams avoid truly novel ideas in favor of incremental, “safe” improvements that are guaranteed to deliver predictable (and often mediocre) results.
Stifled Experimentation: The fear of wasting resources or being reprimanded for an unsuccessful project discourages the rapid prototyping and testing essential for learning.
Hidden Failures: Projects that are clearly not working are prolonged, disguised, or subtly shifted to avoid the official label of “failure,” leading to greater waste in the long run.
Missed Opportunities: The most disruptive innovations often emerge from unexpected paths, which are only discovered through iterative exploration and, yes, initial missteps.

A “Failure Budget” reframes these potential “losses” as necessary investments in learning. It changes the conversation from “did this succeed?” to “what did we learn, and how will it inform our next move?”

Case Study 1: Google’s “20% Time” and Moonshots

The Approach

While not explicitly called a “failure budget,” Google’s famous “20% time” (allowing employees to dedicate 20% of their work week to passion projects) and its subsequent “Moonshot Factory” (X, formerly Google X) operate on a similar philosophical principle. These initiatives implicitly budget for a high rate of non-commercial outcomes. The vast majority of 20% projects don’t become core products, and many “moonshots” are intentionally designed to fail early and cheaply if their underlying assumptions are flawed.

The Return on Learning

The explicit permission to explore, even if it leads to dead ends, has famously given birth to products like Gmail and AdSense. X, with its focus on solving “huge problems,” celebrates “smart failures” as learning milestones. For example, their project to create vertical farming robots, Project Mineral, was ultimately spun out as an independent company after years of R&D and significant investment. Even if it hadn’t, the learning about agricultural AI and robotics would have undoubtedly informed other Google ventures. The investment in these exploratory endeavors—many of which “fail” in their initial iterations—is seen as essential to their long-term innovation pipeline.

Implementing Your “Failure Budget”: Practical Steps

How do you practically implement this in your organization? It’s more than just a line item; it’s a shift in mindset and process:

Dedicated Allocation: Ring-fence a specific percentage of your innovation or R&D budget (e.g., 5-10%) specifically for exploratory projects with clear learning objectives, not just success metrics.
Clear Criteria for “Failure”: Define what constitutes a “good failure.” It’s not about being reckless, but about failing fast, learning something new, and doing so within the allocated budget.
Post-Mortem as Learning Ceremony: Transform project post-mortems for “failed” initiatives into celebrated learning events. Focus on insights, not blame. What assumptions were wrong? What did we discover about our users or the market?
Small Bets First: Encourage teams to launch “minimum viable experiments” (MVEs) rather than large-scale projects. This keeps the cost of failure low while maximizing learning.
Leadership Buy-in & Modeling: Senior leadership must visibly support and even participate in this culture. They must publicly acknowledge and learn from their own “failures” to create psychological safety.

Case Study 2: Spotify’s “Experimentation Culture”

The Approach

Spotify operates with a deep understanding of iterative learning, even without an explicitly named “failure budget.” Their entire product development cycle is built around A/B testing and small, rapid experiments. Teams are empowered to run their own tests, and they have an internal culture where it’s understood that many tests will not lead to a positive outcome (i.e., the new feature won’t outperform the old one). This is not seen as a failure of the team but a learning about user behavior.

The Return on Learning

For example, a team might test dozens of variations of a playlist algorithm or user interface element. Many of these tests will “fail” to improve key metrics. However, each “failure” provides valuable data on what users respond to, what causes friction, and what truly enhances their experience. This continuous stream of learning, funded by the operational budget of development and testing, allows Spotify to constantly refine its product. It avoids large, costly failures by embracing many small, inexpensive ones, ultimately leading to a superior and more adaptive user experience.

Conclusion: Investing in the Unknown

In the relentless pursuit of human-centered innovation, we must acknowledge that the path to breakthrough is rarely linear. It’s often paved with missteps, pivots, and unexpected detours. By institutionalizing a “Failure Budget,” we empower our teams, accelerate our learning cycles, and create the financial and cultural scaffolding necessary to truly innovate. It’s not just about tolerating failure; it’s about strategically funding the exploration of the unknown, transforming every outcome into a valuable step toward our next big idea.

Frequently Asked Questions on the “Failure Budget”

Q: What is a “Failure Budget” in the context of innovation?

A: A “Failure Budget” is a deliberately allocated, ring-fenced amount of resources (time, money, personnel) specifically designated for experimental projects or initiatives where the primary goal is learning, even if the outcome is not commercially successful. It’s a proactive investment in iterative learning.

Q: Why is it crucial to explicitly budget for “failure”?

A: Explicitly budgeting for failure removes the stigma associated with unsuccessful experiments, encourages risk-taking, and fosters a culture of continuous learning. Without it, employees will naturally avoid any project with a high chance of failure, stifling true innovation in favor of incremental improvements.

Q: How does a “Failure Budget” align with human-centered innovation?

A: Human-centered innovation is inherently iterative and user-driven, meaning initial hypotheses are often proven wrong through user feedback. A “Failure Budget” acknowledges this reality by providing the financial and psychological space for teams to experiment, learn from user interactions, and pivot as needed, ultimately leading to more resonant and valuable solutions for humans.

Image credit: 1 of 1,050+ FREE quote slides for meetings & presentations at http://misterinnovation.com

Sign up here to join 17,000+ leaders getting Human-Centered Change & Innovation Weekly delivered to their inbox every week.

Innovation at Scale: How to Make Change Stick

Leave a reply

Innovation at Scale: How to Make Change Stick

GUEST POST from Art Inteligencia

Innovation is the key to staying ahead in a competitive market, but making transformative change can be a challenge. Whether it’s a new product or process that needs to be implemented, or a shift in the way an organization does business, the impact of innovation must be felt throughout the organization in order to be successful. This is especially true when the change needs to be implemented at scale.

Organizations can focus on a few key strategies to ensure that adoption of innovation at scale is successful. First, ensure that the organization is well-prepared for the innovation. This includes having the right technology, infrastructure, and training in place to support the change. By investing in the proper resources upfront, the organization is more likely to be successful in implementing the change.

Second, create a culture of innovation. Encourage employees to think outside the box and take risks. This doesn’t mean that all ideas should be given a green light, but it’s important to ensure that employees feel comfortable bringing their ideas forward and that those ideas are given a fair chance to be explored.

Third, ensure that there is clear and effective communication about the innovation. Make sure that everyone in the organization is aware of what the innovation is and how it will affect them. Provide training and resources to support the change, and make sure to solicit feedback from employees to make sure the change is understood and accepted.

Finally, create systems and processes that make it easier to implement the change. This can include automating certain tasks, streamlining existing processes, and providing tools and resources to make the change easier to adopt.

Braden Kelley, author of Charting Change, offers five key findings to help organizations make change stick at scale:

1. Understand the Nature of Change – The first step to making change stick is to understand the nature of change itself. Kelley emphasizes the importance of recognizing that change is a process, not a single event. By recognizing the complexity of change, organizations can better plan for the process and make sure that new initiatives are implemented successfully.

2. Establish a Change Culture – Establishing a culture of change is essential for making change stick. Kelley recommends that organizations create an environment where change is seen as an opportunity rather than a threat, and where employees are encouraged to take risks and experiment.

3. Make Change Visible – To ensure that change takes hold, Kelley advises organizations to make the process of change visible. This could include creating a visual representation of the desired end-state, or using storytelling to communicate the importance of the change.

4. Embrace Adaptive Change – According to Kelley, organizations should be open to making changes along the way and learning from mistakes. By embracing adaptive change, organizations can adjust and adapt as they learn more about their customers, their industry, and the environment.

5. Celebrate Successes – Finally, Kelley suggests that organizations celebrate their successes. Celebrating successes helps to reinforce the desired behavior and can help to motivate employees to continue to innovate.

By following these five key findings and leveraging the tools in the Change Planning Toolkit from the Human-Centered Change methodology, organizations can make sure that their new initiatives are implemented successfully and that change sticks. By understanding the nature of change, establishing a change culture, making change visible, embracing adaptive change, and celebrating successes, organizations can make sure that their innovations are implemented at scale and that change sticks.

Bottom Line: Innovation at scale is a challenge, but it is possible. By taking the right steps to ensure the organization is well-prepared for the change, creating a culture of innovation, and providing clear and effective communication and systems, organizations can make sure that their initiatives for change stick.

Image credit: Pexels

Sign up here to join 17,000+ leaders getting Human-Centered Change & Innovation Weekly delivered to their inbox every week.

How to Integrate Design Thinking into Your Organization

Leave a reply

How to Integrate Design Thinking into Your Organization

GUEST POST from Art Inteligencia

Design thinking is a powerful and innovative approach to problem solving that has become essential in many industries. It is a process of creative problem solving that starts with understanding the user’s needs and then working with them to come up with creative solutions. Design thinking has been adopted by many organizations and can be used to develop innovative and user-friendly products, services, and experiences. The following article will explore how to integrate design thinking into your organization and the five benefits that it can bring.

Integrating design thinking into your organization is a great way to foster a culture of creativity and innovation. Here are some tips on how to do it:

1. Begin by introducing design thinking to your team

Start by introducing the concepts of design thinking and user-centered design to your team. Explain the basics of the approach and how it can be applied to different projects. Show them examples of successful applications and allow them to ask questions. This will give them a better understanding of the process and help them to see the value of incorporating design thinking into their work.

2. Create a space for experimentation and collaboration

Design thinking relies on collaboration and experimentation to come up with innovative solutions. Create a collaborative environment in your organization that encourages employees to explore different ideas and approaches. Make sure everyone has access to the necessary tools, such as design software or prototyping materials. Provide ample time for your team to explore and experiment with new ideas.

3. Foster a culture of innovation

Encourage your team to think outside the box and come up with creative solutions. Reward employees for coming up with innovative ideas and encourage them to take risks. Provide resources and support to help them find new ways to solve problems.

4. Revisit and revise

Design thinking is an iterative process. Revisit your designs and products on a regular basis and make changes as needed. Listen to feedback from users and incorporate their insights into your design process. This will help you create better products and services that meet user needs.

Five Benefits of Integrating Design Thinking into Your Organization

Integrating design thinking into your organization can help you create better products and services and improve your overall operations. By introducing the concept to your team, creating a space for experimentation and collaboration, fostering a culture of innovation, and revisiting and revising your designs regularly, you can start to reap the benefits of design thinking in your organization.

1. Improves Problem Solving: Design thinking is an effective way to solve complex problems and come up with innovative solutions. By looking at problems from a user’s perspective, you can identify the underlying issues and develop solutions that are tailored to the specific needs of the user. This approach helps organizations to create better products, services, and experiences that meet the needs of their customers and stakeholders.

2. Increases Collaboration: Design thinking encourages collaboration among employees, customers, and other stakeholders. Working together allows for a greater exchange of ideas and a better understanding of the user’s needs. This can lead to more creative and effective solutions.

3. Fosters Creative Thinking: Design thinking encourages creative thinking and out-of-the-box solutions. By looking at problems from different angles, it is easier to come up with creative solutions that are tailored to the user’s needs.

4. Enhances User Experience: Design thinking helps to ensure that products, services, and experiences are designed with the user in mind. By understanding the user’s needs and creating solutions that are tailored to the user, it is possible to create a more engaging and satisfying user experience.

5. Improves Efficiency: Design thinking can help to streamline processes and make them more efficient. By understanding the user’s needs and creating solutions that are tailored to the user, it is possible to make processes more efficient and reduce waste.

Integrating design thinking into your organization can bring many benefits, but it is important to ensure that it is implemented correctly. It is also important to ensure that employees are trained in the process and that it is used consistently throughout the organization. By doing this, you can ensure that you are able to reap the rewards of design thinking and create better products, services, and experiences for your users.

Image credit: Pexels

Sign up here to join 17,000+ leaders getting Human-Centered Change & Innovation Weekly delivered to their inbox every week.

Innovation, Change and Transformation in London – Part One

Leave a reply

Innovation, Change and Transformation in London - Part One

I’m off to London tomorrow for my London Business School class reunion. And, while I’m looking forward to reuniting with my LBS classmates, I’m also looking forward to connecting in person with some of the smartest innovation, change and transformation professionals, academics and entrepreneurs on the planet.

But I need your help…

I’m trying to organize a meetup of London innovation, change, and transformation professionals on Friday afternoon, 3 May 2019 in central London, but I’m still looking for someone to provide a space to facilitate this cross-pollination of ideas.

If you would like to host me and a dozen or so amazing innovation, change and transformation professionals, academics and entrepreneurs to empower some great conversations and information sharing, please contact me.

I will be returning to London in June/July, but more about that later. Stay tuned!

UPDATE: I was able to secure a room at the Oracle office in Central London near Moorgate for Friday afternoon from 1pm-4pm. Please contact me if you’re interested in attending as I’m finalizing the attendee list and I have a maximum capacity for 25 people. I’ll send final details by email once the attendee list is finalized.

UPDATE: We had a great turnout at this innovation, change and transformation meetup at the Oracle office in Central London. It was a great opportunity to meet some great Innovation Excellence contributors in person, to make a lot of great connections between people and to share information and inspiration. For those of you unable to make it, sorry, but you really missed out! Maybe next time…

Accelerate your change and transformation success

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

How to Measure and Reward Intrapreneurial Effort

Leave a reply

The Metrics of Potential

How to Measure and Reward Intrapreneurial Effort

GUEST POST from Chateau G Pato
LAST UPDATED: January 13, 2026 at 12:07PM

The greatest tragedy in modern business isn’t the lack of ideas; it is the organizational immunity to new ways of thinking. We tell our employees to “act like owners,” to innovate, and to take risks. We beg for intrapreneurship. Yet, the moment they step outside the prescribed lines of operational efficiency, we suffocate them with metrics designed for a different era.

We are trying to measure exploration using tools designed for exploitation. When you judge an early-stage innovation initiative by the same Key Performance Indicators (KPIs) used for your core business — like immediate ROI or quarterly earnings impact — you aren’t managing innovation; you are killing it.

If we want human-centered change and genuine intrapreneurial behavior, we must radically rethink our reward structures. We need to pivot from measuring purely financial outcomes to measuring potential, effort, and learning.

“Innovation is not an efficiency exercise; it is an exploration exercise. If you judge explorers solely by how straight their path was or if they brought back gold on the first day, they will never leave the paved road again.” — Braden Kelley

The Failure of Operational KPIs

Traditional organizations are optimization machines. They are designed to do what they did yesterday, but slightly faster and cheaper today. The metrics that drive this — variance reduction, Six Sigma efficiency, immediate profitability — are actively hostile to the messy reality of intrapreneurship.

An intrapreneur is someone working within a large organization who possesses the entrepreneurial spirit. They navigate bureaucracy to turn an idea into a profitable reality. Their work is characterized by uncertainty, hypotheses, and inevitable pivots. When we apply operational KPIs to their work, we send a clear signal: “Innovate, but don’t you dare fail.” This creates a culture of incrementalism, where only the safest, least disruptive ideas are pursued.

From Results to Readiness

Most performance systems are optimized to reward delivery, not discovery. They excel at tracking milestones, budgets, and utilization. But intrapreneurial effort is about increasing organizational readiness for futures that cannot yet be predicted.

Readiness is a capability, not a result. It shows up in how quickly teams can learn, adapt, and mobilize when opportunity or disruption appears.

Shifting to “Return on Learning” (ROL)

To unlock intrapreneurial potential, we must move away from lagging indicators (did it make money?) toward leading indicators (are we learning fast enough to eventually make money?).

In the early stages of innovation, the primary output isn’t profit; it is validated learning. We need to value the reduction of uncertainty. A failed experiment that definitively proves a market doesn’t exist is a massive success — it stops the organization from wasting millions on a doomed product launch. Yet, standard performance reviews would penalize the intrapreneur who led that “failed” project.

We must introduce concepts like “Return on Learning” (ROL). ROL asks: How many hypotheses did we test? How quickly did we validate or invalidate our assumptions? Have we gained insights that provide a competitive advantage elsewhere in the company?

The Five Signals of Intrapreneurial Potential

After years of working with organizations across industries, five repeatable signals consistently indicate whether intrapreneurial effort is occurring productively:

Learning Through Action: Experiments designed to answer meaningful questions, not to justify predetermined solutions.
Assumption Discipline: Clear articulation and testing of what must be true for an idea to succeed.
Customer Evidence: Decisions grounded in observed behavior rather than internal opinion.
Networked Collaboration: Movement across organizational boundaries to access diverse insight.
Adaptive Persistence: Willingness to change direction without disengaging.

These signals allow leaders to see progress even when revenue remains a distant milestone.

Rewarding Effort and the “Smart Failure”

This is the hardest cultural shift for legacy organizations: rewarding the behavior, not just the outcome. Intrapreneurship requires psychological safety. Employees must know that if they take a calculated risk based on sound data, execute a rigorous experiment, and the idea still fails due to market forces, their career won’t be collateral damage.

We must separate innovation performance from operational performance reviews. An intrapreneur’s bonus shouldn’t just be tied to the P&L of their new venture; it should be tied to the quality of their experimentation.

Case Study 1: 3M and the Valuation of “Slack” Time

3M is perhaps the grandfather of institutionalized intrapreneurship. Their famous “15% Culture” allows technical employees to spend up to 15% of their paid time pursuing projects of their own choosing, without needing management approval initially.

The Metric of Potential: 3M doesn’t measure the ROI of that 15% time immediately. They are effectively measuring — and rewarding — curiosity and engagement. The metric is simply: Are you using this time to explore? This policy acknowledges that innovation needs “slack” in the system. By structurally permitting time away from core tasks, 3M validates the effort of exploration before a commercial outcome is even visible. The Post-it Note is the legendary result of this policy, a product born from a “failed” adhesive experiment that found a new application because an employee had the time and cover to tinker.

Democratizing the Tools of Innovation

Another way to measure and reward potential is by lowering the barrier to entry. Instead of making employees fight through five layers of management approval to get $5,000 for a prototype, what if we trusted them? The metric here is engagement: how many employees are raising their hands to try something?

Case Study 2: Adobe Kickbox and Trust-Based Metrics

Adobe recognized that their approval processes were strangling internal innovation. They introduced “Kickbox,” a red box containing resources for any employee with an idea. It included instructions on how to validate ideas and, crucially, a pre-paid credit card with $1,000 to spend on testing, no questions asked, no expense reports required.

The Metric of Potential: Adobe didn’t measure Kickbox success by how many billion-dollar products emerged in year one. They measured the velocity of experimentation and the democratization of innovation. How many boxes were requested? How many ideas moved to the next stage of funding (the “Blue Box”)? By trusting employees with seed funding, they rewarded the act of stepping up. The reward wasn’t a bonus; it was autonomy and trust. This approach uncovered thousands of ideas that middle management would previously have filtered out.

Conclusion: From Accounting to Anthropology

Measuring intrapreneurial effort requires leaders to stop thinking like accountants and start thinking like anthropologists. We need to observe behaviors, understand motivations, and create environments where human potential can flourish.

If your organization wants the rewards of innovation, it must stop punishing the behaviors that lead to it. Start measuring the number of experiments run per month. Start celebrating the team that killed a bad idea fast. Start rewarding the insights gained from failure. When you change the metrics, you change the mindset. And when you change the mindset, you unlock the future.

Frequently Asked Questions on Innovation Metrics

Q: Why do traditional KPIs fail when applied to innovation and intrapreneurship?

A: Traditional KPIs focus on efficiency, predictability, and short-term ROI. Innovation is inherently inefficient, unpredictable, and long-term. Applying operational metrics to exploratory work punishes necessary failure and stifles risk-taking behavior.

Q: What is the difference between ‘Return on Investment’ (ROI) and ‘Return on Learning’ (ROL)?

A: ROI measures financial gain against money spent. ROL measures the insights, validated hypotheses, and organizational capabilities gained from an experiment, regardless of financial outcome. ROL is crucial for early-stage innovation.

Q: How can an organization reward an intrapreneur whose project failed?

A: Rewarding “smart failure” is vital. If the intrapreneur rigorously tested a hypothesis, killed a bad idea fast, and shared valuable market insights, they should be rewarded for saving the company money and increasing its knowledge base through recognition, new opportunities, or even bonuses related to learning goals.

Image credits: Unsplash

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Design Sprints for Culture

Leave a reply

Rapidly Prototyping Your Work Environment

Design Sprints for Culture

GUEST POST from Chateau G Pato
LAST UPDATED: January 12, 2026 at 11:53AM

We often talk about Design Sprints in the context of products, features, or services. Teams huddle for five days, brainstorm, prototype, and test an idea with real users. It’s a powerful methodology for de-risking innovation and accelerating learning. But what if we applied this same rapid prototyping mindset to something even more fundamental to organizational success: our culture?

As a human-centered change architect, I believe that our work environment, our internal processes, and the very fabric of how we collaborate are all “products” that can and should be continuously designed, prototyped, and refined. Just as customer experience needs constant auditing, employee experience requires intentional, iterative design. The ‘Design Sprint for Culture’ is precisely this – a concentrated effort to identify a cultural challenge, brainstorm potential solutions, build a prototype of a new behavior or process, and test its efficacy in a short, focused burst.

Think about the common cultural pain points: siloed departments, ineffective meetings, lack of psychological safety, or disengaged hybrid teams. These aren’t abstract problems; they manifest as concrete frustrations in daily work. A Design Sprint for Culture allows us to treat these challenges not as intractable issues, but as design problems. It moves us from endless debates about “what’s wrong” to actionable experiments in “what could be better.”

Why Prototype Culture?

The traditional approach to cultural change is often slow, top-down, and prone to resistance. Large-scale initiatives, year-long training programs, or mandated values statements rarely achieve the desired impact because they lack immediate feedback loops and rarely involve those most affected by the change. Culture, after all, is the sum of shared habits and behaviors. To change culture, we must change habits, and to change habits, we must prototype new behaviors.

A cultural sprint offers:

Rapid Learning: Instead of waiting months to see if a new policy works, you can test a small behavioral shift in a week.
Employee Empowerment: By involving employees directly in the design and prototyping of cultural solutions, you foster ownership and reduce resistance.
De-risking Change: You don’t have to bet the farm on a massive cultural overhaul. Small, tested interventions are less disruptive and more likely to succeed.
Tangible Outcomes: The output isn’t a strategy document, but a tangible artifact – a new meeting agenda, a communication protocol, a team ritual – that can be immediately experienced.

“Innovation isn’t just about inventing new products; it’s about inventing better ways for humans to work together to create value. Our internal culture is the ultimate product of our collective efforts, and it deserves the same rigorous design thinking as our external offerings.” –- Braden Kelley

The Cultural Sprint Framework (Adapted)

While the exact steps can be tailored, a Cultural Design Sprint generally follows a similar five-day structure to a traditional sprint:

Understand & Define (Day 1): Identify a specific cultural challenge. Frame it as a problem statement. Map out current behaviors and their impact.
Diverge & Ideate (Day 2): Brainstorm a wide range of solutions. Think outside the box: what new behaviors, rituals, or processes could address the defined problem?
Decide & Storyboard (Day 3): Select the most promising ideas. Storyboard how the new cultural behavior/process would work step-by-step.
Prototype (Day 4): Create a tangible, low-fidelity prototype of the new cultural element. This could be a new meeting structure, a communication template, a defined decision-making process, or a micro-learning module.
Test & Reflect (Day 5): Implement the prototype with a small, representative group (e.g., one team, a few individuals). Gather immediate feedback. What worked? What didn’t? What did we learn?

Case Studies in Cultural Prototyping

Case Study 1: Re-energizing Hybrid Meetings

A global software company was struggling with disengaged hybrid meetings. Remote participants felt ignored, and in-office attendees found themselves distracted. Endless debates about technology solutions went nowhere. A small cross-functional team, including remote and in-office employees, convened for a 3-day Cultural Design Sprint.

They defined the problem as: “How might we make hybrid meetings equally engaging and productive for all participants?” They prototyped a new “Hybrid Meeting Protocol” which included:

Dedicated “Remote Ambassador” role for each meeting, responsible for monitoring chat and ensuring remote voices were heard.
A “5-Minute Focus” warm-up activity to align everyone before diving into content.
Mandatory use of a digital whiteboard for all brainstorming, regardless of location.

This protocol was tested with three pilot teams for a week. The immediate feedback was overwhelmingly positive. Remote employees reported feeling significantly more included, and overall meeting effectiveness improved by 25% (as measured by a quick post-meeting survey). The prototype was then refined and rolled out incrementally across the organization, rather than as a top-down mandate.

Case Study 2: Cultivating Psychological Safety in a Design Team

A fast-paced agency’s design team was experiencing a drop in innovative ideas. Post-mortems revealed that junior designers felt intimidated to share early concepts due to fear of criticism from senior members. A one-week Cultural Design Sprint focused on improving psychological safety.

Their challenge: “How might we create a feedback environment where designers at all levels feel safe to share unfinished work?” The team prototyped a “WIP (Work In Progress) Review” ritual:

A designated “Safe Space” meeting for early concepts, with strict rules: “No solutions, just questions” and “Focus on the idea, not the person.”
A visual “Vulnerability Scale” where designers could indicate how raw their work was, setting expectations.
Anonymous feedback submission for certain stages.

The prototype was tested for two weeks. The design team observed a 40% increase in early-stage concept sharing. Junior designers reported feeling more comfortable and valued. The success led to integrating elements of the WIP Review into other team interactions, fostering a more open and collaborative critique culture.

Conclusion: The Future is Designed, Not Dictated

The challenges facing modern organizations are complex, and traditional approaches to cultural change are often too slow and too rigid. By embracing the principles of Design Sprints for Culture, we empower our people to become co-creators of their work environment. We move from abstract conversations about values to concrete experiments in behavior. We build cultures that are resilient, adaptable, and genuinely human-centered – because they are designed by humans, for humans. It’s time to stop talking about culture and start prototyping it.

Frequently Asked Questions (FAQ)

Q: What is a Design Sprint for Culture?

A: It’s a focused, short-term (typically 3-5 day) workshop where a team identifies a specific cultural challenge, brainstorms solutions, prototypes a new behavior or process, and tests it with a small group of employees.

Q: How is it different from traditional cultural change initiatives?

A: Unlike traditional, top-down, and slow initiatives, a cultural sprint is rapid, iterative, and bottoms-up. It prioritizes hands-on prototyping and immediate feedback from employees, de-risking change and fostering ownership.

Q: What kind of cultural challenges can a sprint address?

A: It can address a wide range of issues, such as improving meeting effectiveness, fostering psychological safety, enhancing cross-functional collaboration, defining hybrid work norms, or re-energizing team rituals. The key is to define a specific, actionable problem.

Image credits: Unsplash

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

The Innovation Value of Cross-Pollination

Leave a reply

Internal Mobility as Retention Strategy

The Innovation Value of Cross-Pollination

GUEST POST from Chateau G Pato
LAST UPDATED: January 10, 2026 at 11:16AM

In the current landscape of the global economy, the most valuable currency isn’t capital — it’s human potential. We are witnessing a fundamental shift in the employer-employee social contract. For decades, the “career ladder” was the dominant metaphor for progress. You started at the bottom, climbed vertically within a single functional silo, and retired at the top. But in an era defined by rapid technological disruption and shifting human expectations, that ladder has become a liability. It is rigid, fragile, and increasingly disconnected from how innovation actually happens.

To survive and thrive today, organizations must replace the ladder with the Career Lattice. This human-centered approach to organizational design prioritizes internal mobility not just as an HR checkbox for retention, but as a primary engine for innovation. When we facilitate the movement of talent across traditional boundaries, we trigger a process I call “Organizational Cross-Pollination.”

The Retention Crisis is a Growth Crisis

Why do people leave? Exit interviews often cite compensation, but deeper inquiry reveals a more pervasive cause: stagnation. High-performing individuals are biologically and psychologically wired for growth. When an employee feels they have mastered their domain and sees no path to diversify their skills without leaving the company, they begin to look elsewhere. Retention is not about holding someone in place; it is about providing enough internal space for them to move.

Internal mobility acts as a pressure-release valve for talent. By allowing a software engineer to spend six months with the customer success team, or a marketing strategist to pivot into product development, the organization provides the “newness” and challenge that high-potential employees crave. This human-centric flexibility creates a culture where the organization is seen as a platform for a lifetime of different careers, rather than a single, static destination.

“Innovation is the byproduct of human curiosity meeting organizational opportunity. When we restrict mobility to protect functional silos, we stifle the very curiosity that sustains our competitive advantage. A truly innovative culture is one where the ‘Not Invented Here’ syndrome is cured by people who have actually been ‘There’.” — Braden Kelley

Unlocking the Innovation Value of Cross-Pollination

Beyond retention, the strategic value of internal mobility lies in the breaking of silos. Silos are where innovation goes to die. They create “echo chambers” where teams solve the same problems using the same tired methodologies. Cross-pollination — the movement of people, ideas, and “tacit knowledge” from one department to another — introduces the constructive friction necessary for breakthrough thinking.

An employee moving from Department A to Department B brings with them a unique set of lenses. They see inefficiencies that long-tenured members of the team have become blind to. They recognize patterns that exist across the organization and can connect dots that were previously invisible. This is the Innovation Premium of internal mobility.

Case Study 1: The Global Tech Giant’s Talent Marketplace

A major enterprise software provider faced a significant “brain drain” as mid-level managers sought roles at smaller, more agile startups. The leadership realized that while they had thousands of open roles, their internal hiring process was more bureaucratic than their external one. They implemented an AI-driven Internal Talent Marketplace.

This system allowed employees to see not just full-time roles, but “micro-projects” across the company. A data scientist in the Finance department could spend 10% of their time helping the Sustainability team model carbon footprints. The Result: The company saw a 25% increase in retention for participating employees. More importantly, the Sustainability team launched a new product feature based on a financial modeling technique the data scientist brought from their home department — a feature that became a primary market differentiator within one year.

Case Study 2: The Industrial Manufacturer’s Digital Bridge

A century-old manufacturing firm was struggling to integrate IoT (Internet of Things) sensors into its heavy machinery. Their software developers were brilliant at code but didn’t understand the physical stresses of a factory floor. Conversely, their mechanical engineers knew the machines but feared the digital shift.

The firm launched a “Cross-Pollination Fellowship,” moving mechanical engineers into the software UI/UX teams for 12 months. The Result: The software became significantly more intuitive for actual operators because the designers now possessed deep “domain empathy.” This internal move saved the company an estimated 18 months in development time and resulted in three new patents that combined physical mechanical insights with predictive software algorithms.

The Barrier: Overcoming Talent Hoarding

The biggest obstacle to internal mobility is not technology or lack of interest; it is talent hoarding. Middle managers are often incentivized solely on the output of their specific team. When a star performer wants to move to a different department, the manager views it as a loss rather than an organizational win. To fix this, we must change the incentive structure.

Leaders must be measured on their “Talent Export Rate.” We should celebrate managers who develop employees so effectively that they are recruited by other parts of the business. This requires a human-centered change in mindset: seeing the organization as a single ecosystem where the flow of talent is the lifeblood of the whole, not the property of the part.

A Call to Action for Innovation Leaders

If you are an innovation leader, your job is not just to manage ideas; it is to manage the environment where ideas are born. Internal mobility is the most underutilized tool in your kit. By championing a culture where people can move freely, you are building a resilient, adaptive, and deeply human organization. The next great idea for your company is already inside your building — it just might be sitting in the wrong department.

Frequently Asked Questions

How does internal mobility directly improve the ROI of an innovation program?

Internal mobility improves ROI by reducing “time-to-competency” and “acquisition costs.” When an internal employee moves to a new role, they already understand the organizational culture and network. Furthermore, the cross-pollination of their previous knowledge into a new area often leads to faster problem-solving and unique intellectual property that external hires would take months to develop.

What are “micro-projects” and how do they support retention?

Micro-projects are short-term, part-time assignments that allow employees to contribute to a different department without leaving their current role. They support retention by satisfying the employee’s need for variety and skill-building, effectively “scratching the itch” for change without the risk of a full-scale resignation or transfer.

How can a company start an internal mobility program with limited resources?

Start by mapping the skills your organization needs for its top three innovation goals. Then, identify employees in unrelated departments who possess those skills as hobbies or previous experience. Create a simple “Internal Shadowing” program where these employees spend 4 hours a week with the target team. This low-cost pilot demonstrates value and builds the cultural appetite for more formal mobility later.

Image credits: Unsplash

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Are You Prepared to Run a Digital Business for the Digital Age?

Leave a reply

Are You Prepared to Run a Digital Business for the Digital Age?

In our digital age, all companies must change how they think, how they interact with customers, partners, and suppliers, and how their business works on the inside. Customer, partner, and supplier expectations have changed, and a gap is opening between what they expect from their interaction with companies and what those companies are currently able to deliver. Companies must immediately work to close this expectation gap, or their entire business is at risk.

If digital natives attack, they will do it with a collection of digital strategies that utilize the power of the digital mindset to more efficiently and effectively utilize the available people, tools, and technology, and to design better, more seamlessly interconnected, and automated processes that can operate with only occasional human intervention.

To defend your company’s very existence, you must start thinking like a technology company or go out of business. Part of that thinking is to fundamentally re-imagine how you structure and operate your business. You must look at your business and your industry in the same way that a digital native startup will if they seek to attack you and steal your market. To make this easier, ask yourself these five foundational questions:

If I were to build this business today, given everything that I know about the industry and its customers and the advances in people, process, technology and tools, how would I design it?

From the customers’ perspective, where does the value come from?

What structure and systems would deliver the maximum value with the minimum waste?

What are the barriers to adoption and the obstacles to delight for my product(s) and/or service(s) and how will my design help potential customers overcome them?

Where is the friction in my business that the latest usage methods of people, process, technology, and tools can help eliminate?

There are, of course, other questions you may want to ask, but these five should get you most of the way to where you need to go in your initial strategic planning sessions. What questions do you think are key for enterprises to ask themselves if they are to survive and thrive in the digital age?

Digital Strategy vs. Digital Transformation

How much appetite for digital change do you have?

Understanding how your management and your enterprise is likely to answer this question will help you identify whether your business should pursue a digital strategy or a digital transformation. The two terms are often misused, in part by being used interchangeably when they are in fact two very different things.

A digital strategy is a strategy focused on utilizing digital technologies to better serve one group of people (customers, employees, partners, suppliers, etc.) or to serve the needs of one business group (HR, finance, marketing, operations, etc.). The scope of a digital strategy can be quite narrow, such as using digital channels to market to consumers in a B2C company; or broader, such as re-imagining how marketing could be made more efficient using digital tools like CRM, marketing automation, social media monitoring, etc. and hopefully become more effective at the same time.

Meanwhile, digital transformation is an intensive process that begins by effectively building an entirely new organization from scratch, utilizing:

The latest best practices and emerging next practices in process (continuous improvement, business architecture, lean startup, business process management, or BPM, crowd computing, and continuous innovation using a tool like The Eight I’s of Infinite Innovation™)

The latest tools (robotics, sensors, etc.)

All the latest digital technologies (artificial intelligence, predictive analytics, BPM, etc.)

The optimal use of the other three to liberate the people who work for you to spend less time on bureaucratic work and more time creating the changes necessary to overcome barriers to adoption and obstacles to delight through better leadership methods, reward/recognition systems, physical spaces, collaboration, and knowledge management systems, etc.

It ends with a plan of how to transform from the old way of running the business to the new way.

The planning of the digital transformation is all done collaboratively on paper, whiteboards, and asynchronous electronic communication (definitely not email) powered by a collection of tools like the Change Planning Toolkit™.

The goal is to think like a digital native, to think like a startup, to approach the idea of designing a company by utilizing all the advances in people, process, technology, and tools to kill off the existing incarnation of your company. Because if you don’t re-invent your company now and set yourself up with a new set of capabilities that enable you to continuously reinvent yourself as a company, then a venture capitalist is going to see an opportunity, find the right team of digital natives, and give them the funding necessary to enter your market and reinvent your entire industry for you.

What do you want to re-invent?

Our team at Oracle was created to use design thinking, innovation and transformation tools and methods to help Oracle customers tackle their greatest business challenges, to re-imagine themselves for the digital age, and to discover and pursue their greatest innovation, transformation and growth opportunities.

We call this human-centric problem-solving and together we create plans to make our customers’ solution vision real in just weeks. And along the way, this new Oracle approach helps increase collaboration across business functions and accelerate future decision-making.

Find out more about how to protect your business from digital disruption, building upon these five foundational questions with additional questions and frameworks contained in my latest success guide Riding the Data Wave to Digital Disruption.

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.