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Saturday | 22 November, 2008
CIO
Innovation in Sight
Australian organizations need to disengage the parking brake on innovation.
Peter Scott 07 December, 2006 13:41:57

There is a multitude of reasons for companies to implement an EWI, including an extrapolation of a perceived benefit for optimum gain. "Inevitably there is a financial business case and often it will contain statements like 'this practice will save this staff member X minutes a day', or 'this practice will increase our share of wallet per customer Y per cent'. Then, to maximize that absolute number, management looks to involve the whole organization in an attempt to get the biggest multiplication factor," Kolbusz explains.

Another factor that appeals to some leaders is that EWIs increase the level of sameness, which can be seen as an aid to management of a big organization. "Senior leaders can be attracted to that. You see it when the big software application suites are implemented because that is overtly what they endeavour to do," he says.

Then, once an EWI has been launched, it is difficult to pull back or even to adjust its scope. "Often a lot of time and effort is spent up front identifying the best practices, comparing them, writing sophisticated tenders, and evaluating them, just to get to the point when the initiative is going to be launched and the project is going to be stated," Kolbusz says. "So there's a sense of 'we've put a lot of investment into this so we want to maximize our return on that investment'. That helps drive the making of bigger projects."

Two powerful negative messages are sent to an organization when an EWI is undertaken, Kolbusz says. "One is that one of the biggest challenges facing the organization is being resolved by the use of an established solution from outside, and that solution is also available to competitors. The second is that whatever the particular priorities may be in an individual business unit, they aren't as important as this one all-encompassing product that will cover the entire organization.

"These two messages are heard within the organization and serve to inhibit innovation, even though there may be a whole lot of positive drivers that management has previously found to justify making it an EWI." Kolbusz is keen to stress that he is not against EWIs per se, but he is concerned when they are rolled out in that way. And while "not suggesting anarchy", he believes business units should be allowed freedom to pursue what is best for them within the corporate framework. "If business units are very clear about their goals in terms of the broader group, they are better able to make the right judgments about which initiative they can take at what time. Assuming there is a legitimate, well-thought-out and prioritized need in a business unit, it should pursue that. Other business units should then independently and responsibly assess the relevance and the priority of that initiative to them at that time, because they are in the best position to do that.

"This is what needs to be managed for organizations to take a non-enterprise-wide approach and yet still pursue best practices when that's the best solution.

Kolbusz believes the pursuit of innovation doesn't have to be an either/or standoff. "There is an opportunity to have the best of both worlds," he explains. "Companies don't have to bag best practices, because there is a place for them. But there is no reason to pursue EWIs, even if management is uncertain how relevant innovation will be in the near term or the mid term.

"What I'm suggesting is not a trade-off for organizations. A different approach will still give the benefits of whatever best practice might have a place in an organization, but it will also give a chance to add a bit of innovation. The over-riding message is that organizations should not try to promote innovation unless they are sure they're not inhibiting it."

Jan Kolbusz has been involved with innovation throughout his career, which has included employment with Western Australia's Treasury and Education Department, Ernst & Young, and Sealcorp Holdings. His enthusiasm for the unfettered adoption of innovation has inspired Kolbusz to begin research into the field for a doctorate at Notre Dame University, investigating the ethical phenomena surrounding technology investment within large corporations

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