VANTAGE POINT

Digitising innovation management.

By Suraya Sulaiman and Azim Pawanchik

N ews on digital disruption, digital economy, platform economy,

and digital transformation is ubiquitous in the media today, much more
than ever before. There is plenty of hype and debate on how Blockchain
technologies, algorithms, Artificial Intelligence (AI), and the Internet of
things (IOT) would transform industries and create new growth opportunities.
In Southeast Asia, the digital wave is dominated by technology start-ups
such as Lazada, Traveloka, Tokopedia, Grab, and Gojek, where the latter
two have morphed from ride-hailing companies to ‘super apps’ that offer
everything from food, transport, delivery, payment, and insurance services in
a single experience.1 These start-ups have provided income opportunities
for many individuals and businesses and have delivered value to millions of
customers. They were able to come this far by fully embracing the digital and
platform economy, coupled with their customers’ readiness and ecosystem
infrastructure and support. They derive their competitive edge from customer
data, algorithms, network of partners, brand, and–at the core–innovation.
The fact that business media brand Fast Company crowned Grab as the second
most innovative company in the world in 2019 is testament to this.2
While much of the spotlight appears to be on the arena of start-ups
and purely digital companies, many large corporates and traditional industries
are also harnessing the benefits of digital operating models, where digital
transformation appears to be eclipsing innovation as a corporate agenda.
Many companies have created digital teams, hired Chief Digital Officers,
developed digital labs, and initiated hackathons to explore new technologies,
businesses, or operating models. The latest Altimeter report also showed that
digital transformation is becoming more pervasive, evolving beyond IT and
becoming an enterprise-wide movement.3
This journey, however, does not appear to be the same for all industries.
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are digital conservatives, due to a strong mix of low digital governance
capabilities, regulatory concerns, and a risk-averse culture.4 At the other end
of the spectrum lie the retail and high technology industries that are digitally
mature and have revolutionised customer experiences and relationships
as they leverage on data, analytics, and mobile accessibility.
12 Vol.6 / Asian Management Insights

‘Going digital’ and adopting the same operating model and approach as Generating these outcomes in large organisations is different from doing it in
start-ups may seem extremely attractive for many organisations as the success of Digital transformation start-ups. This is because a range of functions and stakeholders need to be involved Management styles
many tech start-ups are glorified. However, corporates embarking on this journey efforts should not at different stages of the innovation process to ensure alignment with the company’s and deference to
should proceed with caution as the goals, operating models, mindsets, investment be viewed as an strategic direction and risk appetite. Secondly, for almost all large organisations, hierarchy remain deeply
levels, and expectations on returns can be drastically different. Grab and Gojek, for endeavour on their innovation is not a full-time focus but one of many competing priorities for rooted in the cultural
instance, had raised a total of US$3 billion and US$1.5 billion respectively, whilst own; they should be employees. A recent survey highlighted key obstacles for innovation, which included psyche of most Asian
many other smaller start-ups could easily attain funding of between US$10 million lack of trust and empowerment, and lack of clear direction from management.9
integrated with the organisations. This leads
and US$200 million. 5 This pales in comparison with the funding allocated to These barriers stem from human factors relating to bureaucracy, silos and
corporate innovation to the loss of a trove of
internal innovation projects of many corporates. cognitive biases.
Compounding this, not all technologies have reached the level of maturity that agenda. Bureaucracy refers to the complex and multi-layered systems and processes potential ideas from
can provide a clear long-term value proposition. Singapore’s DBS Bank, recognised within an organisation. While these systems and procedures are designed to across the organisation.
as the world’s best bank for its digital innovation and transformation efforts, has maintain uniformity and control within an organisation, it fuels power distance,
recently rolled out Digibank, a mobile-only bank in India, which offers its services which ultimately leads to an authority gap and delays decision making. Asian
entirely via digital channels. It serves its customers via a conversational AI platform, countries like Malaysia, the Philippines, Indonesia, and Singapore show significant silos were rated as the biggest barrier,
which handles 82 percent of customer requests and helps 1.8 million customers power distance as opposed to New Zealand, Denmark, and Norway.10 An executive with 73 percent of votes from
manage money, track expenses, analyse spending, and improve overall financial coach who works largely in Southeast Asia reported, “Senior-level people get no HR leaders, and 54 percent from
literacy.6 On the other hand, AI in the autonomous vehicle arena of self-driving information, and believe that they have nothing to improve upon, and junior-level IT leaders.12
cars and trucks is still under development as the technology and ecosystem people do not bring ideas forward. It’s hard to innovate under these conditions.” 11 Cognitive biases further compound
maturity are not aligned with the hype generated so far. Moreover, management styles and deference to hierarchy remain deeply rooted in the issue as individuals, unable to
Today, most AI systems tend to augment instead of automate. For example, the cultural psyche of most Asian organisations. This leads to the loss of a trove process all the information around them
while intelligent diagnostic systems can read x-ray images, radiologists are still of potential ideas from across the organisation. objectively, resort to mental shortcuts
UHTXLUHG WR GHÀQH WKH LPDJLQJ WR EH SHUIRUPHG DQG FRUUHODWH LPDJLQJ UHVXOWV ZLWK Adding salt to this wound are business unit silos, which present themselves when making decisions. These biases
symptoms, previous medical records, and other test results. 7 This opens up vast in conflicting agendas, limited leadership, lack of collaboration, and an occur unconsciously and may result
new opportunities for collaborations between humans and machines. There will be enhanced overconfidence gap. In the face of digital transformation, organisational in irrational and ineffective decision-
a need for human-machine symbiosis so that this new generation of intelligent
machines can be leveraged to augment the innate remarkable capabilities of humans
in ways that enhance business and organisational capabilities for both adaptation
and productivity.8 IMPEDIMENTS TO CORPORATE INNOVATION
As much as it is important to implement technologies to stay ahead of
the game, technological relevancy and execution capability must be carefully
considered. Digital transformation efforts by corporates need to start with a clear
purpose and an embedded strategic agenda to obtain the full-fledged competitive
advantage. Therefore, digital transformation efforts should not be viewed as an
Bureaucracy Silos Cognitive biases
endeavour on their own; they should be integrated with the corporate
innovation agenda.

Impediments in corporate innovation

There are many approaches and techniques to innovation, such as design thinking,
lean start-up, business model canvas, and stage gate. Regardless of the approach,
every innovation effort should focus on the following four key outcomes:

1. Uncovering and determining what and where to innovate

2. Generating fresh ideas or solutions that can be prototyped and piloted

3. Providing resources to convert prototypes and pilots into full-scale solutions

4. Ensuring there is adoption of new solutions that simultaneously generate value

for end-users and the company FIGURE 1 Source: Alpha Catalyst
14 Vol.6 / Asian Management Insights

making, as the brain, in an effort to instinctively reduce uncertainty, chooses a The convergence between digital Digital platforms lend themselves to a heightened level of transparency and
default ‘safe and well-trodden path’. While there is a list of over 100 biases, there transformation and innovation Digitising the innovation visibility, making delays in decision-making a thing of the past. Digital governance
are three that most critically affect decision making for innovation projects: inertia, management thus presents an endeavour through also addresses biases in decision-making; as transparency encourages more diligence
risk and loss aversion, and myopia (refer to Figure 2). 13
opportunity to revolutionise what is still the use of platforms and quality to action.
largely managed in a traditional manner: provides for safe storage Magnus Karlsson, former Director of New Business Development & Innovation
through emails, instant messages, in the cloud, increased at Ericsson, expounds the virtues of internal collaboration in his report, ‘Collaborative
spreadsheets, presentations, post-its, Idea Management’. While at Ericsson, he helped design IdeaBoxes, an internal
efficiency, reduced
KEY COGNITIVE BIASES and an endless schedule of meetings. innovation space devoid of hierarchy that facilitates collaboration on employee-
operational costs, and
Digitising the innovation endeavour generated ideas. The platform has allowed for the creation of over 60,000 ideas since
through the use of platforms provides
eases data analysis. its inception in 2008.14 Karlsson explains that such innovation platforms allow
Description Potential impact on
for safe storage in the cloud, increased Additionally, a digital companies to utilise the collective creativity of its employees, as well as ensure that
innovation projects
efficiency, reduced operational costs, platform provides the right ideas meet the company’s innovation needs. Idea management thus becomes
Inertia – Inclined to rely on – Reluctance to look and eases data analysis. Additionally, scalability, structure, embedded within the innovation tools.
familiar assumptions at how to capitalise
with a reluctance to on new trends, a digital platform provides scalability, and repeatability to Another example of successful internal collaboration can be found at the
change even with opportunities or structure, and repeatability for the .XDOD/XPSXURIÀFHRI1HVWOpWKHPXOWLQDWLRQDOIRRGDQGEHYHUDJHFRPSDQ\,Q
supporting evidence new markets the innovation process.
innovation process. This allows the company held its inaugural Innovation Awards, aimed at promoting idea generation
– Ignoring emerging organisations to carefully plan, manage, amongst its employees. The results were momentous—6,000 participating employees
competition
and monitor their innovation efforts generated 50,000 fresh ideas, which in turn translated into a 10 percent increase in
Risk and loss – Sensitive to negative – Companies do not in real time whilst tracking the process sales revenue in that same year.15
aversion events, would prefer invest in projects and aligning it with intended goals and The increased pace in all digital domains has resulted in a situation where
to avoid losses than that have uncertain
objectives. More importantly, digital innovation needs to be continuous, relentless, and fast. Collaboration has become
to achieve gains returns or success
platforms can help overcome the many essential to enabling this, and innovation platforms are able to create the ecosystem
– Fearful of losses, so
avoids them barriers to innovation stated earlier. that allows continuous and collaborative innovation within organisations. Digitising
innovation management then provides a powerful channel that leverages digital
Myopia – Tendency to – Unwilling to take INTERNAL COLLABORATION affordances while harnessing and enhancing the human potential.
overweight risks on projects
In an attempt to combat hierarchy,
the present or that are not directly
near future and applicable or bureaucracy and silos, digital tools can
underweight the relevant at the convert the organisational chart from
distant future present time
a linear to a network structure (refer FROM LINEAR TO NETWORK STRUCTURES
FIGURE 2 to Figure 3). These digital platforms
create inter-organisational networks
that increase channels of communication
While not everyone experiences biases in the same way or to the same extent, a among siloed functions, promote
combination of several biases may potentially disrupt optimal decision-making, and continuous collaboration on ideas
critical and creative thinking. They may also lead to one’s reluctance to engage among organisational layers, and
with innovation, which takes considerable time to adopt and convert. Companies democratise the ideation process. They
need to adopt new methods to determine the areas to innovate in, or identify ideas allow ideas from every corner of
to prototype or pilot, monitor and communicate project progress, and capture the organisation to surface. When
the value generated, in order to account for the challenges presented by bureaucracy, implemented correctly, the internal
silos and cognitive biases. tools help organisations circumvent
cultural barriers by offering equal
Digitising innovation management airtime to employees regardless of
Rapidly changing markets and sectors call for new tools, attitudes, and mindsets rank. Employees also gain a new sense
towards innovation and transformation, so as to create a sustainable process of ownership and motivation towards
and culture within organisations. While digital transformation initiatives are self-selected projects, increasing the
predominantly focused on customer experience or operational efficiency, there has likelihood of follow-through of ideas
not been much change in the way innovation itself is managed within organisations. from the prototype to launch stages. FIGURE 3 Source: Alpha Catalyst
16 Vol.6 / Asian Management Insights

EXTERNAL COLLABORATION online product development process reduced the time

Building upon the idea of harnessing internal collective from concept to market by 70 percent. Tan Lixia, Haier’s
AI plays a significant role in helping
creativity, a similar approach can be undertaken by external Chief Financial Officer, commented on the company’s innovation teams manage the sheer
stakeholders via co-creation or open innovation, allowing open innovation processes, “The border of the company volume of ideas that come through
for collaboration with customers, suppliers, start-ups, and is not important. If you can help create value for users, it by flagging trending activities, thereby
a wider network of partners. There are many approaches to shouldn’t matter whether you’re an employee or not.”16 reducing the workload and ensuring
how this can be done on a variable scale. Crowdsourcing Companies, however, don’t necessarily need their
a fast response time.
harnesses the power of collective intelligence from external own digital platform to collaborate. There are several open
parties. For example, what do hazelnut macchiatos, little innovation platforms that can be tapped upon globally.
green splash sticks, and free Wi-Fi have in common? All Singapore’s Infocomm Media Development Authority,
three were ideas suggested by customers to Starbucks for example, launched the Open Innovation Platform in
via its portal, My Starbucks Idea. The website gathered 2018, which acts as a neutral, government-driven intermediary
PRUH WKDQ  LGHDV RYHU ÀYH \HDUV VLQFH LWV ODXQFK ZLWK that matches business challenges that problem owners face to
over 2 million votes cast. My Starbucks Idea served three a pool of problem solvers.17 So far, 68 challenges have been
strategic goals for the coffee giant. First, it helped hosted, with over 3,800 solvers on board. The prize money is
crowdsource innovation ideas for free. Second, it involved determined by the problem owner, as the platform prioritises
its customers much earlier in their journey with the brand. churning out proofs of concept and prototypes.
And finally, the platform’s voting functionalities validated Another example of collaborative innovation is where a
and tested the proposed ideas by customers in real time. single organisation acts as an anchor and collaborates with other
Crowdsourcing is not limited to simple consumer products organisations to offer a truly unique product. This is illustrated
or services, as attested by the Malaysian housing developer quintessentially by the app launched by Prudential insurance
giant, Sime Darby Property Sdn Bhd. It launched an company called Pulse. This first-of-its-kind app in Southeast can be tagged by AI and matched to existing solutions. AI
online platform, dto, with the goal of co-creating the Asia offers holistic health management to consumers, powered plays a significant role in helping innovation teams manage
end product with potential buyers. The platform allows by AI and real-time information. Pulse integrates offerings from the sheer volume of ideas that come through by flagging
potential customers to vote for their preferred development multiple providers—U.K.-based Babylon (symptom checker and trending activities, thereby reducing the workload and ensuring
concept, design, and amenities of a future property, health assessment) and Tictrac (personal wellness services), collaboration and external innovation efforts. Altimeter’s a quick response time. People analytics is another area where
while simultaneously engaging, empowering, and educating Malaysia’s DoctorOnCall (online consultation) and AIME 2018 report highlights the numerous potential applications AI takes the lead. The technology can analyse strengths,
potential buyers. (dengue outbreak predictor), Singapore’s MyDoc (video of AI within organisations, especially in analysing the areas interest and performance of individuals, which can subsequently
At a larger scale, Haier, a consumer electronic company consultation with a doctor), and Indonesia’s Halodoc (digital of business intelligence, customer relationship management, be used as recommendations for them to be part of a team
from China, created a global network of 400,000 institutions healthcare). 18
These are complemented by payment portals market research, and web analytics in a more integrated or as a technical evaluator of a project. AI partakes in
and technical experts to collaborate on the company’s R&D like Boost (in Malaysia) and OVO (in Indonesia). Pulse was manner.20 AI is used as a predictive tool by the world’s largest recommending specific challenges to particular individuals,
efforts via its platform, HOPE (Haier Open Partnership created as an evolving platform where Prudential will be adding WUHQG GDWDEDVH 7UHQG +XQWHU WR UHÀQH LQVLJKWV RQ FRQVXPHU based on their area of expertise or past interest and actions.
Ecosystem). When it needed help designing blades for a new partners, tools, and value-added services in phases. 19 behaviour. It can crunch and analyse three billion views and This reduces cognitive overload for the individual.
new air conditioner, the platform helped to solicit numerous Initially launched in Malaysia with plans to expand into 10 other 300,000 ideas as individual data points, subsequently churning
proposals, all within the span of one week. Eventually, a total markets in Asia, Pulse is a great example of how large companies out automated reports and accurate forecasts for innovators Next step: Creating the right mindset
of 33 institutions contributed to the design and development can collaborate with start-ups to ride the fast-paced innovation to identify opportunities for innovation. As we move towards a digital business paradigm, machine
of Haier’s air conditioner, which became an instant hit after scene. All partners bring their unique cutting-edge technology, Applying the deeper extension of AI, Machine Learning and human decision-making increasingly coalesce. Blending
its launch in 2013. which would have required extensive resources if developed is able to accelerate the process of generating and testing technology-enabled insights with a thorough understanding
Haier’s openness to crowdsourcing was also seen from in-house. Instead, Prudential, with its 15 million customers new molecules and materials. This aspect of AI, applied to of human judgement, reasoning, and choice will allow
product feedback and the defrayment of development costs. globally, acted as the platform on which others can interface the rigour of testing all molecular combinations possible, organisations to create and sustain a competitive edge in this
When it developed Air Cube, a creative and novel to provide consumers with an exceptional product. can expedite the process of finding new drugs or inventing increasingly complex world. The precursor for this is not the
combination of a humidifier and air purifier, more than new materials for clean technology. The result is a dramatic technology itself, but the current digital behaviour of employees
800,000 online ‘fans’ offered their feedback. Once the ALGORITHMS AND AI reduction in cost of R&D, while also shortening the time and management that need to embrace the digital and platform
prototype was ready, it was made available on a popular The previous examples illustrate how companies can harvest to market. economy. Many are used to engaging in digital experiences in
crowdfunding site, through which the company garnered the collective intelligence and assets of internal employees or AI also takes on a noteworthy role in re-conceptualising their daily lives but it may not be that easy to apply the same
more than 7,500 customers. Haier used the feedback to external partners through the adoption of digital mechanisms. how innovation is managed within organisations. Aggregated to their work. In planning this journey, organisations should
further refine the Air Cube before its formal launch. The This data serves as a means to accelerate both internal issues and opportunities generated by the internal crowd consider the following roadmap:
18 Vol.6 / Asian Management Insights

1. ASSESSING INNOVATION AND DIGITAL READINESS 3. CREATING THE CAPABILITY AND MINDSET FOR
It is important to begin with an understanding of the current level of readiness to DIGITAL AND INNOVATION
enable the organisation to identify potential obstacles and advantage points to To digitise innovation management successfully, innovators need to have a digital
maximise efforts. The organisation should consider the strategy, process, capability and innovative mindset. This would include developing:
and culture, and the funding to innovate. It also needs to assess its digital readiness ‡ The ability to generate and accept fresh ideas and insights
from technological, digital literacy, and cultural perspectives. ‡ Collaboration skills to build trust and relationships with a willingness to
share information
2. DESIGNING A ROADMAP AND PROCESS ‡ The ability to collaborate virtually on innovation projects
Communicating a clear approach and process would allow the digitisation process ‡ The willingness to learn and experiment, and have guidelines to manage failure
within the organisation to be deployed in a systematic manner. This includes providing ‡ Technical collaboration skills, which include managing data safety and security,
guidelines for: privacy policies and IP management
‡ Individual/leadership roles to drive adoption of the new innovation ‡ Technical skills relating to data analytics and visualisation, as well as creating
management approach algorithms to manage and predict innovation
‡ Internal and external collaboration
‡ Data access, sharing, security, and privacy In conclusion, the digitisation of innovation management allows organisations
‡ Experimenting and prototyping with new collaboration partners and digital tools to spend less time managing innovation and more time on things that really matter—
‡ Investment in digital tools, platforms, and capability building like uncovering insights and opportunities, working on prototypes and pilots and
‡ Expected impact or value most importantly, creating value for customers and the company.

Dr. Suraya Sulaiman

THE HYBRID MINDSET is the Innovation Provocateur at Alpha Catalyst

Azim Pawanchik
is the Innovation Strategist at Alpha Catalyst

References
1
Clay Chandler, “Grab vs. Go-Jek: Inside Asia’s Battle of the ‘Super Apps’”, Fortune, March 20, 2019.
2
“The world’s most innovative companies 2019”, Fast Company.
Digital Innovative 3
 6(WOLQJHU´$,LQWKH(QWHUSULVH5HDO6WUDWHJLHVIRU$UWLÀFLDO,QWHOOLJHQFHµ$OWLPHWHU
Mindset Mindset 4
Capgemini Consulting, “The Digital Advantage: How digital leaders outperformed their peers in every
industry”, 201.
5
Clay Chandler, “Grab vs. Go-Jek: Inside Asia’s Battle of the ‘Super Apps’”, Fortune, March 20, 2019.
Driven by insights 6
 (WOLQJHU´$,LQWKH(QWHUSULVH5HDO6WUDWHJLHVIRU$UWLÀFLDO,QWHOOLJHQFHµ$OWLPHWHU
Driven by data, logic and creativity 7
S. Barro, S. and T. Davenport, “People and Machines: Partners in Innovation”, MIT Sloan Management, 2019.
and algorithms 
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9
Azim Pawanchik, & Suraya Sulaiman, “Leading Innovation: Embedding innovation culture in
Focus on building Malaysia organizations”, 2010.
Focus on virtual work 10
Kate Sweetman, “In Asia, power gets in the way”, Harvard Business Review, April 10, 2012.
and collaboration trust and relationships 11
Ibid.
12
Tan Jee Yee, “Digital transformation in Malaysia seeing returns, but companies are still failing”,
Digital New Asia, July 22, 2019.
Security and Learning and 13
J. Potts, J, “Can behavioural biases in choice under novelty explain innovation failures?” Prometheus
data privacy experimentation 8.   ²
14
Ben Paynter, “To Boost Internal Innovation, Ericsson Thinks Inside the Boxes”, The Fast Company,
April 16, 2013.
Focus on Focus on value 15
Zulfadhli Zaki, “Nestle Malaysia in RM100 a share club, thanks to innovation”, The Sun Daily,
exponential creation and -DQXDU\
impact competitive edge 16
G. Hamel and M. Zanini, “The End of Bureaucracy: How a Chinese appliance maker is reinventing
PDQDJHPHQWIRUWKHGLJLWDODJHµ+DUYDUG%XVLQHVV5HYLHZ  
17
Nicky Lung, “Singapore rolls out Open Innovation Platform to support innovative solutions”, OpenGov,
0D\

Digital News Asia, “Prudential launches all-in-one AI-powered mobile app”, August 13, 2019.
19
Ibid.
20
FIGURE 4 Source: Alpha Catalyst  $OWLPHWHU´$,LQWKH(QWHUSULVH5HDO6WUDWHJLHVIRU$UWLÀFLDO,QWHOOLJHQFHµ