The IT innovation paradox

Rob Livingstone

Rob is a respected and experienced CIO, with more than three decades of industry and ICT experience. Over the last 16 years he has held the CIO role at several multinationals, most recently Ricoh. He is the owner of Rob Livingstone Advisory and a Fellow of University of Technology, Sydney. Rob delivers the Pathways Advanced and Business ICT leadership programs in conjunction with the CIO Executive Council.

I have been thinking about the IT industry as a whole, and I have concluded that it is, in some ways, its own worst enemy. IT relentlessly drives and delivers innovation at a global, societal, and individual level at phenomenally fast rates, yet, paradoxically, IT departments within organisations often struggle to drive innovation from within their own organisations to the same extent.

Why is this, and how do we resolve this paradox?

IT and professions through the ages

Before trying to reflect on this question, ask yourself these questions: What other professions or disciplines can be regarded as delivering disruptive innovation in their own right? Which have appeared from almost nowhere and have had such a major impact on so many sectors of the world’s population — all in less than a generation?

Consider, for a moment, a few of the related disciplines found in organisations:

  • Finance and accounting is said to date back more than 7000 years.

  • Law has been around since the start of civilized society; some argue it helped underpin its formation.

  • Sales, commerce and trading have been in place since humankind’s earliest records and marketing has its origins in the late 1800s.

  • Management as a discipline pre-dates the Pyramids.

I would suggest IT is relatively unique as it is a very, very latecomer to the commercial world. We should also consider the relationship between the innovator and the beneficiary.

Innovation from the outside

IT-led innovation from outside the organisation is the source of so-called ‘disruptive’ innovation, which is the game changer. When not constrained to a specific organisation, IT-led innovation can be truly disruptive. The innovator can develop and push the solution out to the market. If it is orders of magnitude cheaper, faster or more capable compared to its nearest competitor, it will become a disruptive change. This will occur over relatively short time periods and the disruptive innovation is imposed externally to the organisation.

In these instances, typically, there is no direct close-coupling between the innovator and beneficiaries.

Innovation from the inside

When IT departments lead innovation from within the organisation, there is a tightly coupled and inter-connected relationship between the innovator and the beneficiary. The locomotive is coupled to the carriages, so to speak. The IT department has to provide a large array of services across the organisation and generally comply with the bounds of organisational policies. At the same time, organisations are increasingly expecting IT led innovations to improve their efficiency, effectiveness and drive greater value-add. As a result, the likelihood of delivering breakthrough innovation is quite low.

In these instances, continuous innovation originates within organisation, and is a consequence of the direct close-coupling between the innovator and the beneficiaries.

Organisations must continuously improve, and given that the IT functions within organisations are an integral part of the organisation itself, disruptive innovation is a low probability.

Which IT innovation path should we follow?

Which direction should an organisation take when it arrives at the ‘innovation’ fork in the road: Slow and steady or make the jump? The allure of a disruptive innovation can be very appealing. It can also be detrimental to the organisation as a whole if the CIO is handed a ticking parcel, called ‘disruptive innovation’, and asked to implement it.

When organisations make decisions on innovative solutions without close collaboration and input from their CIOs, they do so at their own peril, irrespective of the type of innovation. As long as the organisation’s stakeholders can make a well-considered, evidence based decision, by all means turn the wheel, hit the accelerator and go for it. Innovate, decide and drive carefully!

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Tags: innovation, IT, paradox

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