AGILE INNOVATION IN THE VUCA ERA
The rapid changes of Industry Revolution 4.0 have created uncertainty on the part of companies and industries. As a consequence, business companies are required to cope with the changes. Indeed, while the progress of technology advancement was slowly in the past, the technological change at the present time is swift. For instance, machinery products took about five to ten years to be out of dates, but in the digital era nowadays, expiry dates can take only a month. New technological tools are emerging every second.
It is then with little doubt to assert that all business leaders across the globe are facing the unstable, uncomfortable, and challenging phenomenon. The new emerging phenomenon is what so-called VUCA era, as its acronym term, the era is characterized by the nature and dynamics of change along with the speed of change forces (Volatility), lacking of predictability along with the prospects for surprise (Uncertainty), the confounding of issues along with the confusion surrounding organizations (Complexity), and the multiple meanings of conditions that create potential misunderstandings (Ambiguity).
The VUCA era has required all sectors and individuals, including but not limited to business practitioners, entrepreneurs, bureaucrats, researchers, and academics, to be proactive in coping and adapting the changes. Anticipating the changes may not result in facing the threats of organization failure and bankruptcy.
In fact, the digital revolution is able to get rid of business giants, who are lulled by the old paradigm in running businesses. Companies that experienced such situations are Kodak, Nokia and conventional taxi companies disrupted by the digital system of Uber and Grab. At present, companies and industries must be ready at any time to face the turbulence due to the rapid and unpredictable change.
The disruption era has created turbulence for many business sectors. Those who are not prepared for rapid changes, will almost certainly run over and become history. Therefore, facing the rapid and seemingly uncontrollable shift in the business landscape, it requires corporate leaders to be more vigilant in managing and leading their business. Business transformation is often suggested as a stance to survive in the era of VUCA, of course by first doing the transformation of corporate culture.
Changes from the analog era to the digital age that explores all business models to maintain the company’s business processes, the key word is progress and change. These advancements and changes can be achieved through agile innovation. In this case, the main trigger factor is VUCA.
Agile innovation requires a series of paradigm shifts, ranging from the mindset that we must continually question and the changes and strengthening of the company’s innovative culture. Because what happens is this paradigm that actually limits the aspects, options that can be taken in response to changes in the business environment. In other words, in the face of change, companies need a flexible organization. Such an organization is able to transform itself to remain relevant in the midst of a changing and turbulent business world.
According to Morris et al. (2014), in their book entitled, “Agile Innovation”, there are 12 principles to be a company that applies agile innovation. The twelve principles are as follows:
- Delight the customer through rapid delivery of a minimal key feature set;
- Welcome changing requirements by building in a rapid pivot innovation model;
- Deliver value continuously that fulfills progressively deeper tacit customer needs;
- Implement agile innovation as a team sport, daily;
- Build projects around incentivized and empowered innovators;
- Convey information face to face using co-facilitation process;
- Measure progress by completion of working innovations;
- Maintain a consistent cadence of progress by adopting proven methodologies;
- Aim to simultaneously master customer insight and technical excellence;
- Simplify, simplify, simplify;
- Unleash ideation by unlocking your team’s core creativity; dan
- Hold introspective to continuously learn and improve.
In other words, agile innovation within the company requires:
- Adaptability to change
- Growth steadily
- Innovativeness mindset and capability
- Learning continuously
- Excellence in achieving performance
By understanding and applying the 12 principles, it is expected that companies and organizations are not only adapting to changes and business environment fluctuations but also maintaining the future of its business in the future. Innovative agility will not only extend the sustainability of the company’s sustainable competitive advantage but ensure business sustainability and the growth of future companies, in any industry they engage in.
Dr. Mohammad Hamsal, MSE., MQM., M.B.A
Dr. Asnan Furinto, S.T., M.M
Translated into English by Agustinus Bandur, Ph.D