Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
One thing that makes innovation so difficult is that there's no simple template for achieving it. Different industries, business models and cultures create an infinite number of potential approaches. What works at Google isn't necessarily going to succeed at Wal-Mart. Worse, says Anthony, "Vendors are always ready and willing to sell you the next great version of software. But innovation isn't a result of technology. It's the result of people using technology to facilitate change."
Further complicating matters is that many organizations and CIOs lack a basic understanding of how innovation unfolds. Creativity is not innovation. Brilliant ideas and cool technologies aren't necessarily the ticket to competitive gain.
"It doesn't always come down to the usual suspects," McAfee says. "It's not always the case that a company needs to do something faster or cut costs by x percent. It's sometimes as simple as providing convenience, simplicity or accessibility. In many cases, it's about giving people something they seek."
In fact, a common misunderstanding is that structure stifles innovation. Although initiatives such as Total Quality Management (TQM) and Six Sigma reduce variability, increase predictability and sometimes leave little space for innovation, says Kartik Hosanagar, assistant professor of information and operations management at the University of Pennsylvania's Wharton School, structure and innovation aren't mutually exclusive concepts. The actual innovation process should encompass metrics and formal data, but it can't be limited to these alone. What's more, the process should tap into project management techniques and take on a formal structure.
Few are more aware of this than Webb of Equifax, where focus groups, interviews and other feedback tools gauge the pulse of the customer base and detect changes in the marketplace. He also makes sure that employees carve out time for introducing, discussing and vetting ideas. More than 100 individuals from various functions--spread across a wide swath of geographies--participate in highly focused sessions on idea development. These "entrepreneurial teams" take "green-shoot ideas and build businesses out of them," Webb says.
The result: new lines of business--along with IT systems that enhance defined processes. For example, a couple of years ago, Equifax introduced a service that combines credit verification with appraisals and title insurance processing.
Adapting IT systems was one of the simplest parts of the project because the innovation process pointed to specific systems and software. "This was an idea that came directly out of brainstorming sessions," Webb says. "Employees communicated a need, and we pursued it."
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