“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” – William Pollard
In the digital era, IT innovation is getting more and more crucial for IT organizations to sustain and drive business success. To leverage new IT capabilities to enhance the customer experience. It is no longer sufficient to provide efficient IT service through a service catalogue (a “help yourself” approach”) in the era of digitalization and unpredictability. The fact is that business requirements and market evolution are changing rapidly with every IT driven disruptive trend and business has no time to wait for service development – they want it now without trouble! Gartner stated in 2012 that CEOs rate technology (IT) as the greatest external force to impact on their business model in the next 3-5 years – and it is still valid. In many cases, business does not know how to leverage IT and what the latest and future technology trends are. Innovation is a topic rapidly increasing in interest in many organizations but also a difficult topic to address. How come? What is innovation? How does one take the first step?
The fact is that I have tried to implement innovation in large IT organizations and know exactly how difficult it is. It took months to agree on a definition of what “innovation” actually is, further months to agree on how innovation should relate to other practices and processes, and was then lost in a general tsunami of re-organizations.
- IT Innovation is so complex that it is impossible to define and structure.
- From what budget will you fund innovation? How does it relate to the budget process?
- Our employees in the IT department must be 100% billable for business. No time for innovation!
So what was the problem? My conclusion was that it was easy to define the mechanics of IT innovation but it did not fit with the general culture and values of the organization. Innovation is nothing you by “command and control” can implement but rather have to grow from the employees and leaders (culture) based on values. By viewing innovation based on the same pre-requisites as “normal” process development made it impossible to implement. Innovation is something different focusing on leveraging decentralized creativity and knowledge (not on efficiency), and hence a different view of employees. Only through viewing human motivation as McGregor’s Theory Y (ambitious, self-motivated and self-control) can innovation catch momentum and make a difference.
“Innovation is the set of capabilities needed to continuous ascertain the realization of a desired future.” – John Kao (Innovation Strategist – World Economic Forum)
My point of view is that innovation today is the backbone of how to run IT as a business. What is interesting is that innovation is knowledge and collaboration driven. It is what we know and the knowledge we share about the technical trends, market and customers, and how to “connect the dots” that determines business success. It is about how we collaborate with little prestige cross boarders (internal and external) to engage different competences and experience that makes a difference. It is therefore fair to say that traditional IT governance (planning, budgeting and responsibilities) to increase control, supported by recent research, is not able to do innovation. Do not get me wrong, it is necessary to have structure and processes but with a purpose to quickly and dynamically take decisions and implement (short time to market).
Key components of IT innovation:
- Environmental scanning creating market and customer insights
- High leverage on knowledge sharing in organization
- Collaboration (Internal and External) cross boarders to engage different competences and experience
- Efficient process to create momentum in development and short time to market.
- A supportive organization that recognize diversity, can-do attitude and tolerance as assets
IT innovation is very interlinked to Customer Intimacy and Performance Management as a strategy going forward. A strategy where we constantly learn and adjust to technical innovation and business demand to optimized business value in short circles – based on digitalization and unpredictability. Innovation is a natural part of this strategy. With a strategy of Operational Excellence with a “command and command” culture based on long-term structure to reduce cost and risk will not work.
“Innovation is the central issue in economic prosperity” – Michael Porter
Peter Hinssen describes the working of innovation in the digitalization era in his book “The New Normal – exploring the limits of the digital world. The author is describing two different innovation models (open and closed) and the model to use in the digital era depends on the complexity of the industry. Before digitalization, the entire market was a closed system with finite number of possibilities – where customers, competitors, and new products interact with one another with same objectives and all players share a clear view of the game. Innovation was concentrated (closed) to R&D departments in companies where all components of the market were known.
In the digital age, the pre-requisites for innovation and market success have changes. The workings of the market are unpredictable with endless number of future combinations. Open innovation is the key future where development comes from many sources leveraging decentralized knowledge from many partners (university, government research, customers, start-ups) in combination with internal knowledge. Interesting to notice is that more and more companies directly fund start-ups through internal venture capital funds – to gain access to new ideas, innovation strategies and innovations.
There are many great articles discussing the topic of innovation and I lately looked at a publication from Forbes. They have through research and interviews defined five tips for successful innovation.
Tip 1: Look where you normally do not look – look at other industries to learn how they address issues similar to yours. What can you learn from them?
Tip 2: Look for connections that no one else sees – it is about “connecting the dots” between technology, business demand and customer needs. It is a key competence of the CIO.
Tip 3: Don’t be afraid of chaos – chaos is a key driver for urgency and innovation. Embrace chaos and see it as something necessary. Do not kill chaos with more command and control.
Tip 4: Even innovation needs structure – there is a need to direction and vision of what to achieve. Also processes to speed up decision-makings and implementation.
Tip 5: Focus on what is real – talk about innovation in terms of specific value propositions for the business – not just productivity and efficiency.
So, where to get started? What is the first step? My recommendation is to not to go the structured path to innovation (definition and processes) but rather start with value and leadership. It is about creating employees that have the opportunity and trust to share knowledge and innovation.
1. What values do you have in your organization? How does these correlate to a sound innovation climate? What do you need to do?
2. Adapt a Customer Intimacy strategy and enhance Performance Management culture. This is a pre-requisite for innovation and business success.
3. Implement an Innovation Lab to coordinate and drive innovation with both internal and external contributors. Test yourself forward.
4. Reduce level of control in the organization and build trust! Without trust, you will never get innovation or business success.
5. Contact an expert in the field of innovation and performance management (The Goodwind Company) for coaching and learning
Innovation is the backbone for running IT as a business. To continuously redefine the provided IT services, the role of IT and future direction in a digital and unpredictable environment with complete business focus. In the end, it is about moving outside the comfort zone and challenge yourself. Never being satisfied with what you are and what you can do. Continuous improvement in its essence. To see the game from a different angle and scoring in the unpredictable way.
“A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” Wayne Gretzky
– Hans Gillior