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How Do CIOs Lead Innovation?

By balmahale | June 2, 2011

My takeaway from the New IT Innovation Models Panel

By Bal Mahale*, Panel Captain

MIT has always been associated with innovation and hence this panel had a special place in the Symposium. We put together a panel of experts from diverse backgrounds to get the full perspective. It included, Roy Rosin, Chief Innovation Officer at Intuit, Prof. Cusumano from MIT, who recently published a new book on strategy and innovation, Staying in Power, Alan Trefler, Founder & CEO of Pegasystems, maker of BPM software that helps companies innovate and Arthur Filip, VP & GM of technology consulting at HP, who helps customers innovate. The moderator for the panel was Roger Roberts, a partner at McKinsey for IT Strategy service helping clients conceive and apply technology solutions to enhance innovation and productivity.

The discussion in the panel was structured around few open ended questions around innovation. Here is the summary of the insights that the panelists shared during the discussions.

What is innovation? What does it mean to you in your context? How do you know it when you see it?

Innovation is the marriage between invention and pragmatism propelled by the ability to iterate and continuous improvement. In the IT context it means the business people come up with an idea, work with IT to implement it and deploy it at a massive scale and continually refine it working with customers. You don’t get innovation if the mechanics, the pragmatism and the ability to change is not intrinsic part of your strategy.

Innovation simply is the creation and capture of value from new ideas. Innovation is about how quickly can people test and validate the new ideas. As a Chief Innovation officer, the gift I got from Intuit was the time to sit back and study till I can see some patterns emerge. Innovation is not about making few big bets but lot of small bets and analyzing how those bets turn out to be.

What leads to great outcomes? Can conditions be created – or is some extra catalyst needed – a blinding insight, a special person, a disruptive technology? Does methodology matter?

Most of the Agile people are quite rigid and religious about the methodology and not about results. Majority of the organizations were using some form of agile on their projects. World has been moving towards a more flexible approach, where the teams are moving fast, which is very good for innovation because it allows for lot of experiments and trial and error. Designing experiments and analyzing data from experiments is important but the key is monetizing these experiments after the analysis.

What is the role of platforms in enabling innovation? What are the necessary characteristics? Can “bad platforms” constrain innovation?

Platform is a set of common components that solves a particular problem in ways that brings multiple parties together and covers various aspects of people, process and technology. Historically people thought of platform as a way of building of siloed apps. Innovative companies come up with conceptual platforms such as customer platforms and organize the entire company around platforms. This leads to creating its own ecosystem around platforms.

The debate on open vs proprietary platforms is not quite black and white. There are platforms that are open but not quite open like Microsoft and closed but not completely closed like Apple. Google is almost completely open and Linux is completely open. So there is a spectrum of openness in the platforms and companies have been successful in innovating under both the models. Irrespective of the openness, platforms play a key role in innovations.

 Should we have “chief innovation officers?” How should they be measured? What metrics (if any) make sense in measuring innovation in an organization?

It is important to make sure innovation happens and that’s not just platform and technology innovation. It helps to have someone responsible for it. Innovation is everyone’s job but it is the innovation officer’s job to ensure that the company is good at what it takes to succeed from a holistic standpoint. This means understanding things like:

  • What are the skills you need that are different
  • How are you immersing your workforce in the realities of the customer’s world
  • How are you responding to innovation across the portfolio with speed?
  • Do you have the right dashboards for the executives to review?
  • How do you celebrate your wins? (small)
  • What cultural changes do the leaders need to drive?
  • How can people work well in a matrix environment?
  • How can you get teams through the internal governance and process fast?

Innovation officer makes sure the new ideas see the light of the day.  Here are the key attributes/characteristics for a chief innovation officer role:

–        Understand the future of technology

–        Have skills and experience with innovation

–        Can create the culture, environment and support for innovation

–        Understand the business

There are three different levels of metrics to measure innovation. First is the participation metric – the ideas generated, second is the conversion metric  – how many ideas get implemented along with the speed of conversion and the last one is a shareholder metric – impact of the ideas on company’s performance. The three levels represent evolution as the innovation progresses. Some companies measure the innovation by measuring the revenues coming from not so mature businesses and mature businesses separately.

How do you build the infrastructure for innovation? What enablers can a technology leader put in place to encourage innovation?

Sometimes there can be so much churn in the platform that it is hard to innovate. You need certain stability and that can lead to more innovation. The platform has to evolve but the speed of evolution needs to be manageable.

At the end of the day, the innovation has to make money for the company. Hence in addition to Invention, Innovation companies need to focus on Exploitation. You want to invent periodically but then focus on taking that invention to the market through exploitation. Executing to action is critical part of the innovation.

Technology leaders need to ensure that governance is there both bottoms up and top down. Need to give teams enough time/resources to germinate the ideas but also set goals for a measurable output.

What is the role of the CIO in catalyzing innovation? How should an IT leader spend his/her time to make an impact on this front?

It is possible to bake innovation in the culture of the company. CIOs need to take leadership actions that create conditions for innovation. One of the innovative companies, took a group of IT and business people, co-located them and had them adopt Agile scrum to facilitate innovation.  Innovation has become key part of CIO’s responsibility.

*Bal Mahale is a Senior Director at CA and was the panel captain of this panel at the 8th MIT Sloan CIO Symposium.

Topics: Business & Strategy, CIO Track, Cloud Computing, innovation, IT Governance, Uncategorized, Virtual Organizations | No Comments »

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