There’s a lot of buzz these days surrounding the terms innovation and transformation, especially in the digital realm. But while some use the terms interchangeably, they are actually quite different—and not just in a matter of degree.
An innovation refers to rethinking or reimagining something that already exists. The shift from iPad to iPad Mini—an innovation. The shift from MacBook to MacBook Air—an innovation just the same. In both cases, Apple took a pre-existing technology and made it smaller, smarter, and easier to handle. In fact, no matter how many numbers are added to the iPhone, each ideation will only be an innovation of the one before it—regardless of how many apps or megapixels are added to it.
Indeed, contrary to popular belief, Apple did not create the smartphone—it just created a better smartphone than the one that already existed. Same goes for Henry Ford, who is often given credit for inventing the automobile. The best innovators create the best and most memorable versions of items—but not the items themselves.
A transformation, on the other hand, is a clear change from one state to another, over time. Innovations can cause a transformation, and vice versa. But transformational technologies—and transformations in general—are bigger, evolutionary experiences. They change everything about how we look at a particular market or activity.
Google and Amazon are both transformational leaders. Google started as a search engine. Amazon started as an online book retailer. Since then, both have created new markets all their own. From Google Drive and Google Cardboard to Amazon Web Services and Amazon Go, these are companies that are not afraid to branch out and rethink everything from their business model to their business segment. Have they transformed society? Not quite yet. But the technologies they’re developing certainly could.
Why does it matter? In the digital age, companies need to be both innovative and transformative to survive and grow. The invention of the electric light bulb transformed our entire country, from how long we can work to how we spend our home lives. The light bulb itself was a catalyst. Thomas Edison’s innovation, which allowed the light bulb to be commercially viable, caused the transformation. Both innovation and transformation worked together to create the change.
Knowing how important innovation and transformation are, Google actually gives employees 20 percent of the work day to focus on passion projects completely unrelated to the company’s bottom line. Unfortunately, not all companies are like Google. One study shoes that one-third of small businesses around the world say they’re too busy to explore new ideas at all. My guess: Those companies probably won’t be around too long. Staying where you are is not an option in today’s marketplace. There will always be someone out there thinking of a new, faster way to do what you do (i.e. innovating), or thinking of an entirely new way of doing it (i.e. transforming). Both could put you out of business.
So what’s a company to do? We’re currently facing an unwieldy beast of a digital transformation that is growing in every direction faster than many anticipated. The fact that we’re facing it means it isn’t yet complete. It’s in process. It’s changing the world, and it’s changing us—but those changes aren’t over yet. To survive, we must adapt. We need to adopt a new way of working and seeing the world. In other words, we must:
Stay awake. Be on the lookout for what’s trending. Know what our competitors are working on, and why. Make market research—including customer research—a priority.
Collaborate. Two heads are better than one. We must encourage collaboration throughout our enterprise. Brainstorm everything from new ways to use social media to market our projects—to new ways and purposes to use our projects overall. We must cross-network with other industries to see how their technologies could be used to innovate our own.
Embrace change. Change doesn’t have to be a scary thing. In fact, a culture of change can be fun and fulfilling. Reward employees who come up with new ways to do old things—and better ways to get new things done. So long as the wheels are turning, they’ll get you somewhere new and exciting.
Make peace. The digital transformation isn’t going anywhere. The only way to survive it is to play its game. That means learning to change, grow, innovate—and even transform—our companies in ways we never imagined.
Innovation and transformation are two sides of the same digital coin. The smartest leaders will take their bets on both, knowing they each hold an important role in securing their company’s future.
Additional Resources on This Topic:
Beyond Digital Transformation to Hyper Disruption
Data in New Report Signals Culture is Critical to Digital Transformation
Digital Transformation Road Map for Late Adopters
The Role of Failure in Rapid Innovation