It's now well understood that a company's and nation's long-term economic health is only as strong as its ability to innovate. What's not so well understood is exactly how to stimulate that innovation, though there's no shortage of consultants, academics, politicians, executives (and journalists) willing to offer a well-formed or semi-formed opinion on the subject.
The trendy POV is pessimism. On a macroeconomic level, there's an expanding school of thought that this country's most innovative days are behind it. Economist Robert J. Gordon worries about an aging workforce, insufficient education, onerous regulations, rising debt and other "headwinds," combined with "the fact that so many fundamental one-time-only inventions have already occurred." PayPal founder Peter Thiel and chess grandmaster Garry Kasparov argue that the U.S. has "discarded a century of can-do ambition built on rapid advances in technology and replaced it with a cautiousness far too satisfied with incremental improvements." Nobel laureate Edmund S. Phelps maintains that executives' preoccupation with the next fiscal quarter and bankers' reluctance to loan money for "projects for new products and methods" have, with a few exceptions (Silicon Valley, biotech, clean energy), led to a decline in everyday innovation.
Even those optimistic about the state of innovation offer arguments that are less than convincing. In concluding that the "fundamental drivers of growth are stronger than they have ever been in human history," Boston Consulting Group cites its recent executive survey, which finds that executives worldwide plan to invest more in R&D and profess a renewed commitment to innovation -- as if lots of spending and the best intentions are a better measure of success than the quality of what's being produced. BCG's choice of the 50 most innovative companies in the world, skewed toward the highest-profile players in just four industries, bears out its flawed analysis.
Pessimism about innovation on a microeconomic level takes a different form. In my discussions with CIOs and other execs, it seems that the biggest obstacle is a structural one: How do companies and IT organizations go about carving out the time and formal responsibility for driving profitable innovation when they're so caught up in their day-to-day work?
That question is the premise of a conference InformationWeek will host on May 8 around the theme "Innovate Or Go Home: The CIO's Critical Role In Driving Growth, Opportunity and Breakthrough Ideas." This one-day learning and networking event, presented in conjunction with Interop at the Mandalay Bay Convention Center in Las Vegas, will feature innovation champions from the likes of the San Francisco Giants, Union Pacific, Allstate, ADP, General Electric, Intermountain Healthcare, Forrester Research and Sears.
Giants CIO Bill Schlough, for example, will delve into how he and his team accelerate innovation at the reigning World Series champs, working with baseball operations, ticketing, marketing and every other facet of the organization. Union Pacific CIO Lynden Tennison will discuss how financial incentives and peer voting are promoting a culture of innovation within the railroad's 1,400-person IT organization. Allstate executive VP Suren Gupta will describe how his technology organization is working with the insurer's other business units to host "innovation blitzes," 10-day sprints that solicit and vet employee input on a specific business problem or opportunity. Intermountain Healthcare CTO Frederick Holston and director of innovation Todd Dunn will discuss how the provider's Healthcare Transformation Lab goes about conceiving, funding, developing and delivering new products and services.
There's no shortage of innovation organizations and officers within Fortune 1000 companies. What the best organizations seem to have in common: They take into account their companies' need to drive long-term, sustainable business opportunities without ever losing sight of their short-term need to boost profits and shareholder value. When they break out innovation as a separate discipline or department, they seek ideas from different stakeholders -- technologists, salespeople, marketers, financiers, business developers -- and they're very careful not to build ivory towers that are dismissed, even loathed by the rest of the enterprise. Getting the balance right is a huge part of the innovation challenge.
Formal innovation groups or teams tend to work best when they rotate employees in and out and deliver projects in reasonable time frames, something ADP CIO Michael Capone will discuss at the InformationWeek summit. Think in terms of creative collaborators rather than elite SWAT teams, and deliverables of six to 12 months rather than years. The best innovation teams don't "own" innovation as much as they draw it out, help set the priorities, facilitate collaboration and execution, and manage the risks.
Keith J. Figlioli, senior VP of healthcare informatics at Premier Healthcare Alliance, says his entire organization thinks about the business in three buckets: manage and run the core, build adjacent businesses, and innovate for future opportunities. "We let our teams play around in each of these areas," he says. "Teams get to have focused time to think through how our business will change and what we need to do in order to change with it."
The short answer is that there's no single way or set of best practices to drive innovation. But we can learn a lot from the senior IT and other executives who have taken on this challenge, made some mistakes and have some meaningful results to show for their best efforts.
We encourage you to join us on May 8 in Las Vegas as we roll up our sleeves with those executives.
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