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How CIOs can drive digital innovation through collaboration

How CIOs can drive digital innovation through collaboration

CIOs drive innovation by building digital awareness, forming digital innovation teams, and creating innovative opportunities in the form of new products and services. This three step approach accelerates the innovation cycle and optimizes the leveraging of information and technology for competitive advantage.

I have good news for the CIO community: Senior executives at leading companies are getting the message that leveraging information and technology to improve competitive advantage changes the dynamics of the enterprise and must be at the core of every corporate strategy. Here are a few examples.

  • The board of ANZ Bank in Australia hired Filippo Passerini, former CIO of Procter & Gamble and currently an operating executive with The Carlyle Group, and three other IT thought leaders to provide advice on technology trends.
  • A digital collaboration team at Disney increased 2015 revenues by 20 percent by developing the MagicBand, which enables Disney guests to enter the park and their hotel rooms, make dinner reservations, preorder meals, reserve rides, and more with the wave of their hand — significantly improving the customer service experience.
  • David Finnegan and his enterprise digital collaboration team developed a new business model at Build-A-Bear Workshop that enables guests to interact with digital workstations while they're creating their stuffed animals, providing a unique customer experience.

As CIO, you need to ensure that your company's strategic plan focuses on creating digital awareness, forming digital innovation teams, and developing digital opportunities, as shown in the "digital innovation collaboration model" below.

Collaborating For Success in the Digital Era

Why is this important? Here are three reasons:

  • The consumerization of IT, the Internet of Things (IoT), the digital economy, and disruptive technologies continue to change how companies compete.
  • Your C-suite colleagues are likely inundating you with questions about the shifting landscape, and how information and technology can create unique customer experiences that increase competitiveness.
  • The executive team is looking to you for advice on how to make the use of mobile devices, social media, cloud, and other technologies part of the company's business strategy, not just its IT strategy. They are coming to you, the CIO, to help them understand how all these technologies work and how to incorporate them into the business to improve customer value.

IT organizations can lead this initiative if done strategically. Using the digital innovation collaboration strategy, IT organizations can develop a collaborative process that enables teams to work together more effectively to develop new and improved products and services that create unique customer experiences. Today, companies have to view the entire ecosystem, across the entire value chain to achieve such innovation. The digital innovation collaboration model provides the ability to look at processes from a unique perspective and develop three main competencies.

The 3 competencies of digital innovation

First, the CIO and IT leadership team must create digital awareness across the enterprise. This involves understanding how disruptive technologies change the way we shop, interact and behave. IT organizations can facilitate this by sponsoring a "digital symposium" for the executive team, where thought leaders with real-world experience share the challenges and opportunities involved in leveraging disruptive technologies in innovative ways. Executives need to understand how technology creates real business impact, fosters innovation, and enables the ability to effectively store and share information across the enterprise. Following are some examples:

  • Business impact: According to a recent Forbes article, the digital economy will add more than $1 trillion to the global economy by 2020.
  • Technology innovations: ANZ bank hired IT thought leaders to advise the board on technology innovations. Passerini, one of the four advisors, told me the CIO and COO convinced the board to hire thought leaders.
  • Knowledge base: McKinsey's Digital Labs has an extensive knowledge base that helps clients deliver breakthrough products, experiences, and businesses.

Second, with help from C-suite colleagues, CIOs can take the lead on organizing digital innovation teams. This is where personnel across the enterprise, regardless of role, are re-skilled to enable the implementation of information and technology that creates customer value in new and unprecedented ways. That means everyone must think differently. The marketplace has changed, industries have changed, and buying habits have changed. Following are some examples:

  • Partnerships: J&J partners with other companies to expand its product breadth and service offerings.
  • Out-of-the-box thinking: Disney's goal with MagicBand was to root out all the friction within the Disney World experience. It did this by identifying the barriers to getting into the experience faster.
  • Benchmarking: Demand Metric issued its 2015 benchmarking report that highlights digital marketing effectiveness.

The third leg is to identify digital opportunities across the value chain. This involves digital innovation teams creating new products and services at intersect points where new and unique customer value can be created. To accomplish this, digital innovation teams need to be process-centric, identify value opportunities, and use outside-inside thinking. The following examples are explored in detail in my book, The Strategic CIO: Changing the Dynamics of the Business Enterprise.

  • Process-centric: Passerini told me that the role of the CIO is to help the business make well-informed business decisions. As such, Passerini and his team developed a "digitize, visualize, and simulate" strategy that changed the business model of how decisions are made within P&G.
  • Value opportunities: Former Build-A-Bear Workshop CIO David Finnegan recognized that kids' brains are wired differently than those of previous generations. They live in a world centered on technology. As a result, he led the charge to change the business model of how each guest visiting a Build-A-Bear store interacts with digital monitors, creating a unique customer experience.
  • Outside-inside thinking: David Zanca, former senior vice president of Customer Access, cites the law of rising consumer expectations and urges companies to listen to their customers. FedEx did just that and used its customers' input to develop an innovative product and service called SenseAware. It provides customers with visibility and near real-time access to a package's vital statistics, such as location, temperature, light, humidity, and barometric pressure.

I'm sure your company has implemented some degree of a digital innovation collaboration strategy. But how effective is it? To find out, you need to measure two dimensions. The first is the degree of business value your strategy provides to the enterprise for each of the three competencies. The second dimension is the breadth of the footprint implemented across the business for each of the three competencies. This is depicted in the graphic below.

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I've developed a digital collaboration assessment that can help you measure your strategic maturity by capturing best practices for each of the three competencies and underlying components. The assessment enables you to score the degree of maturity in your organization for each best practice. The scoring can then be plotted on the grid. You can then analyze the results and develop a plan to improve the maturity of your enterprise digital collaboration initiative.To obtain a copy of the assessment, contact me at pweinzimer@gmail.com.

In today's digital economy, every company must develop and implement a digital collaboration strategy. I've attempted to articulate a plan that executive teams can utilize to develop new and innovative products and services that create unique customer value, improve margins, and enhance shareholder wealth. Please contact me with any comments or suggestions. I look forward to hearing from you.

Phil Weinzimer-Strategere Consulting

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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