Innovation: The next big thing

Innovation: The next big thing

A look at the CIO’s role in capturing, nurturing and developing innovative concepts – what to do and how to get out of the way

Nobody knows anything. These were the first words in American novelist, playwright and Academy Award-winning screenwriter William Goldman’s book, Adventures in the Screen Trade.

Goldman was referring to the concept of picking winners: “Not one person in the entire motion picture field knows for a certainty what’s going to work. Every time out it’s a guess – and, if you’re lucky, an educated one.” If Universal Studios knocked back the original concept for Star Wars, several record companies decided the Beatles would never be a success, and 12 publishing houses passed up the opportunity to publish the Harry Potter books, then you wonder how anyone can decide “what’s going to work” and what won’t.

And what applies to the movie, music and literary businesses can easily apply to commercial business management. Just as business leaders can miss out on the next big thing, then IT departments too are not immune. Even when the potentially lucrative innovation comes from within, recognising a good idea is not a given.

Far from it.

And thereby hangs the problem: CIOs are expected to be innovative, despite around 70 per cent of their time being spent on the steady-as-she-goes, business-as-usual putting out the bushfires (and other such clichés).

A recent report by IT industry analysts IDC, Australia IT Services 2011-2016 Forecast and Analysis, suggests, “The top priority of the C-suite, as businesses continue to operate in volatility, is to build a successful and sustainable organisation with a culture that is intrinsically based on innovation and customer centricity.”

It goes on to say that “C-suite expectations from the CIO and their team are drastically changing. CIOs are therefore increasingly under pressure to not only keep the lights on [another well-used cliché] with regard to maintaining and supporting IT operations but are now expected to proactively drive the enterprise IT innovation agenda.”

There is the old business maxim that says: “If you’re not going forward, you’re going backwards.” This not only applies to profit growth but also to productivity, and that often draws on innovation in products, processes and services.

A survey by Deloitte of 5000 young leaders – “millennials”– at the World Economic Forum in Davos, Switzerland, in January, revealed that 78 per cent of “the world’s future business leaders” regard innovation as one of the top three ‘purposes’ of business, the other two being driving profit and benefiting society.

“Millennials surveyed pinpoint creativity as the characteristic that will mark out future innovators, followed by academic ability, technical skills and, most tellingly, the ability to challenge,” says Deloitte Australia’s chief strategy officer, Gerhard Vorster.

The sticking point is that, despite the three-quarters who say that innovation is a priority, just over half believe they actually work for an innovative organisation, and even fewer – 26 per cent – feel that their organisation’s business leaders are doing enough to encourage practices that foster innovation.

The main conditions required to foster innovation, according to the survey group, are:

  • Leadership encouraging idea sharing, regardless of seniority
  • A clear vision for the future
  • Encouraging and rewarding idea generation and creativity
  • A commitment to successfully advancing innovative ideas.

The fact that only a proportion of those espousing these criteria actually felt they worked for organisations that did this implies there is a big gap between word and action, and that innovation is easier said than done.

But they are not alone. Many organisations state in their company profiles that “innovation is our lifeblood”, which makes you wonder about the state of their arteries.

So how do you do it? How do you inculcate an environment that encourages innovation and, more importantly, ensure that it actually has support and puts workable innovative concepts into practice?

In the world of IT there are two forms that innovation can take: innovations to the technology itself, and using technology to innovate within the organisation (and occasionally beyond it).

The innovation of technology

The question is how much innovation in technology can IT departments produce? Looking at some of the key ‘disruptive’ innovative technologies of the last decade or so, one sees that few actually originated within IT departments. Where did the ideas for cloud, social media, business intelligence, CRM, mobility and BYOD come from?

In fact, far from being revolutionary, most are what Robert Hillard, a Deloitte partner who leads the organisation’s Australian Technology Consulting practice, calls “recycling innovation”.

These evolutions of earlier technologies very much include ‘disruptive’ technologies, thus we have cloud from application service providers; social media from group emails; business intelligence from data warehousing; CRM from sales reps’ shared card systems and databases; and mobility and BYOD as inevitable offshoots from the ubiquitous use and increasing functionality of consumer communication products.

These recycled innovations incorporated or amalgamated other technologies, some of which were disruptive in their own right (the Internet, for example). Nonetheless many of these came from technology vendors looking to improve their products and gain greater market share, and some of these by way of academic institutions and entrepreneurs. These are the key sources of technology innovations.

But can the ordinary intra-organisational IT department add its own layer of innovation rather than just apply someone else’s? Is the IT department an enabler or a generator of innovation?

The problem with any new idea, whether it comes from an IT department or a university laboratory, is to ensure that it is relevant. Not all IT departments can afford to do basic research into fundamental principles of physics.

Microsoft has a double-barrel IT research operation – the larger part looks to improve processes and develop products, the other (Microsoft Research) to generate new ideas. A lot of what that second part does verges on the ‘basic’ side of research. It collaborates as much upstream with universities as it does with downstream product development. But most organisations are not so blessed (and most organisations are not multi-billion dollar IT product vendors).

It is a reality for most IT departments that their innovations on the technology itself are limited to writing code.

Certainly IT departments can bring perspective to vendor innovation – as a customer, they can see broader implementation opportunities. But the true proactive innovative ability of the IT department lies not so much in technology development as in reorganising, redeveloping and reinvigorating the organisation, which offers far more immediate results and satisfaction.

The technology of innovation

The more practical – and common – way IT departments can innovate is in the application and development of technology for current business operations: improving existing processes, looking at different and sometimes new (innovative) ways of doing things, and occasionally looking to take the organisation into uncharted territory. IT as risk merchant. IT as business generator.

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