Technology drives innovation. You’ve heard this one before, but it’s easily lost amid the daily hubbub: Technology merely facilitates innovation. Social networking, cloud computing, virtualization, you name it, do not intrinsically drive business improvements. In fact, they can diffuse and dilute innovation and become just another thing to manage. As Kevin Harris, CIO at ICW Group, explains, “Too many CIOs … think they’ve got to use a particular technology, but they’re not sure exactly what to do with it.” The most successful companies view technology as an outcome of innovation. They understand that technology creates opportunities to shorten the distance between two points only after there’s a clear idea of underlying business processes and organizational requirements.

If you pursue innovation, it will come. Unfortunately, it’s possible to do almost everything right and still wind up with mediocre results. An organization can establish innovation teams, give employees time to ponder or pursue interesting ideas, and establish wikis, blogs and so on. Still, employees must feel free to take risks, pursue questionable ideas and fail. Meetings where ideas are attacked and ridiculed are a death knell. “People cannot innovate when they feel stifled,” Harris says. The key, he adds, is to pull the plug when it’s clear an idea or initiative isn’t viable, and constantly analyze what works and what doesn’t work.

Innovation results from an outside-in perspective. True, it’s important to view problems and business challenges in a fresh way. And consultants, analysts and even employees outside a department or division can provide new ideas and different views that might ultimately spur innovation. But an outside-in perspective is only half the picture, says Andrew McAfee, associate professor at Harvard Business School: “Understanding your business model and knowing how and where you bring value to the marketplace is essential.” In fact, this inside-out view is perhaps more important in the long run. “There is way too much outside-in innovation taking place and not enough inside-out,” he argues. The end result? Too many companies with too many technologies in search of a solution.

Bad things will happen if you open up your business processes. Yes, the risk of data theft and intellectual property loss is real. However, “Many executives believe that by giving employees access to information and opening up the innovation process, IP will just walk out the door,” McAfee argues. Another fear? Instead of innovating, employees will view pornography, peruse Facebook or spew propaganda. In reality, the potential gains outweigh the risks. That’s because most employees are honest and thrilled to submit ideas and suggestions. Of course, it’s also possible to put endpoint security and other controls in place. “Problems rarely occur,” McAfee says.

Vendors understand your business and IT better than you do. There’s no shortage of vendors with leading-edge products that can redefine your enterprise and transform your work force. While many of these tools and systems produce impressive results within the right environment, “Salespeople don’t understand your business and your specific requirements as well as you do,” says Scott Anthony, president of innovation consulting firm Innosight. “The key is to understand where the information technology fits within the organization and how it alters business processes in a positive way. “Technology and systems do not innovate, people do,” he explains.

A tight budget stifles innovation. There’s no question that tough economic times make it more difficult to invest in new systems and solutions. But this doesn’t mean that the innovation spigot must be switched off. In fact, to the contrary, “an extremely tight budget can enable innovation,” Anthony points out. The situation can help an organization become more focused and resourceful, and less accepting of inefficiency. “Too often abundance inhibits innovation. Constraints can be liberating because they force you to question assumptions and pursue different approaches,” he observes. —S.G.