Are Digital Transformation and Innovation the Same Thing?

Digital Transformation and InnovationSome companies have an innovation strategy. Some companies have a digital transformation strategy. Are these the same thing? The short answer is “no” but both efforts are important and here’s a brief explanation and an example of each of them.


Innovation is the introduction of any significant, positive change. This can be changes in public policy, small improvements to a company’s processes, totally new, disruptive product offerings, and more. Global Innovation Management Institute’s describes the distribution of innovation possibilities into one of five categories: business model, production, offering, delivery, and market innovation. And those innovations can be either small, incremental changes that improve an existing concept to huge, transformational that shift the foundation of an organization. It is a pretty inclusive term for progress (sometimes maddeningly so since it covers progress in both range and scope).

An example of a workplace production innovation was a new sick PTO policy co-created by NYU employees. In an online employee conversation about a sick time buy-back process improvement, employees began to think of other ways it might benefit workers and instead decided to create a PTO donation policy for co-workers in need. Employees then shared shared suggestions about how to create this new program and identified best practices from institutions with similar programs.

Digital Transformation

Digital transformation is not just moving all processes into a digital format, but fundamentally shifting thinking to accommodate the digital environment into all products and processes (online and offline). In this way, a lot of digital transformation can be innovation, because it can improve products or processes incrementally or have more sweeping changes (like fundamentally changing a company’s business model).

Porsche demonstrated digital transformation thinking by not only launching “Car Connect” (an app which handles everything from navigation services to real-time traffic information, reading out news to selecting music), but it has asked for feedback and invites co-creative commentary from its entire employee base. Car Connect and other systems gather customer data that help optimize experiences over time, but also help to report on product performance.

Does your company have an innovation or a digital transformation strategy? Both? Neither?

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