How to Get Your IT Org to Innovate

By Brian P. Watson  |  Posted 05-19-2008 Print Email
Despite their stated emphasis on innovation, most companies struggle to build a creative culture. Is it time for a new breed of CIO to step in and lead the charge? That’s what happened at FedEx.

Corporate executives are paid to think big.

CEOs and business-unit leaders charged with plotting the strategic direction of their business typically call on a massive toolbox of tactics to improve customer relations, boost operating efficiency and grow the bottom line. Ask those executives how they can do all three, and many will point to a single source: innovation.

And that makes perfect sense. IT-centered breakthroughs have changed industries and operating practices for centuries. Product-centric innovations have created new markets and opened new revenue streams. Process innovations have often led to significant cost savings and operational efficiency gains.

Still, innovation is a tricky concept. Businesses must promote a culture of exploration and creativity, recruit and retain workers devoted to finding new ideas, and build processes that enable business and technology pros to collaborate on potential breakthroughs.

Before any of that can happen, those business executives must match their records with their rhetoric. And so far, a dichotomy exists.

Research and analysis from McKinsey & Co., Accenture and other research and consulting firms paint a frightening portrait of the state of IT innovation: Business executives tout their innovation ambitions, and CIOs champ at the bit to make it happen, but little activity takes place. At times--particularly when the economic outlook is bright--innovation moves to the forefront of corporate strategy.

However, when the outlook becomes cloudy, controlling costs takes priority, forcing executives to direct funds away from exploratory ventures, essentially usurping innovation's urgency. All the while, companies fail to push through disruptive ways to deliver value for customers and partners, and CIOs are left to imagine what could have been.

Not even a third of the 474 IT chiefs surveyed in CIO Insight's April report on the CIO role cited boosting innovation as one of their top priorities. Looking deeper--and highlighting the CIO's role in creating new products--almost four in 10 said they were not involved in choosing which product or service lines to enter, expand or exit. (CIOs are influential in improving internal processes, according to the survey.)

To be sure, it's hard to find a CIO who isn't interested in pioneering innovative ways to develop new products or services, interact with customers and partners, or improve efficiency within the company. Throughout the debate on whether IT leaders are truly strategic or merely tactical, CIOs clearly prefer to be the former. And they want to innovate.

But until they walk the walk, their businesses will remain with the legions of those that have failed to meet the innovation challenge.



 

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