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5/18/2011
02:45 PM
Chris Murphy
Chris Murphy
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Innovation Atrophy: How Companies Can Fight It

It's time for IT leaders to get their teams pumped up again about tech-powered innovation.

>> Innovation Lab Or Not?

Some companies establish lab environments where technologists are dedicated to the pursuit of IT innovation. These formal efforts must be well managed. Without a clear purpose, they risk becoming the corporate equivalent of a high school science fair.

The mission of innovation labs differs by company. Dell's IT innovation team consists of about 15 people charged with coming up with completely different approaches to business problems. Ideally, the team creates templates and frameworks that others in the company can implement where there's a need.

For example, Dell's testing a screen for internal enterprise search that sounds spartan even compared with Google's simple search page design, with only a box for the search terms. Say someone in customer service has a part number, invoice, or customer name and address, and needs more information. The idea is to let that person type one of those data points into the search box and get options laid out in search results format. The business goal is "radically simplifying" how employees interact with technology and ultimately customers, Johnson says. That customer service rep wouldn't have to know which application to use with the tidbit of information in hand; the search tool makes that easy.

In Johnson's view, the technology behind that radically simple interface is secondary. Yet, as is so often the case in IT, making something appear so simple takes a lot of back-end sophistication. Behind this search box is an array of enterprise search software, such as Microsoft's Fast, embedded in hundreds of applications used within Dell. The search screen is in pilot mode. "I don't know if we'll deploy it or not," Johnson says.

Acxiom's IT innovation lab has a different mission. It's focused on evaluating emerging technologies. Acxiom's business is data, providing information that companies use to supplement their own customer data for marketing programs and segmentation. "We were Big Data before Big Data was cool," Guzmán says.

So Acxiom has a 1,500-square-foot lab where it puts the latest software and gear through its paces. For example, it tested Cisco's new UCS server blade system before it was released and got its hands on one of the first of IBM's xSeries servers. It's essential that lab personnel stay close to Acxiom's customers as a way of keeping such work relevant. "If they are really involved in the business, understanding what's happening in our business and what our customers' problems are that we're trying to solve, the more they can apply what they're doing to those problems," he says.

Acxiom recently colocated the tech R&D team with its product development group, since their work is so connected.

One of the hardest challenges with driving IT innovation is getting everyone involved, so it doesn't become the sole responsibility of one small team. That's one of the risks with an innovation lab: The company's other technologists interpret it as a sign that they're off the hook for big ideas.

Capone sees the opposite risk at ADP: how to share the wealth. "The challenge I have is everyone wants to work on the new stuff," he says.

At ADP, like Acxiom, IT's not a back-office or support function. ADP handles payroll for half a million companies, and systems and software are the heart of the business. ADP's IT team works regularly with the company's business units to drive new products.

ADP opened an innovation lab a few weeks ago. It will be staffed with a core team of four or five technologists, including some new hires from outside with innovation expertise, and 15 to 20 others will rotate through the lab on temporary assignments of around six months. This is out of an IT department of about 5,000 people.

Capone's strategy is to engage more people in the pursuit of innovation, while maintaining a sharp focus on the needs of the business and its customers.

CNA Insurance this year made a major shift to rely on outsourcers heavily for IT operations. It used to have about 1,000 IT staffers and 1,000 contractors, and the majority of them focused on what CIO Ray Oral calls "run the business" IT operations. Now CNA has about 400 IT staff mostly focused on "change the business" IT projects, he says, while four key service providers handle most IT operations. In addition, though, Oral has three of its service providers provide innovation lab services. Oral says they're still developing how best to use this new model, but one thing he likes is that, in addition to the people the outsourcers have full time on CNA concerns, they also pull in as needed people who specialize in other industries--from manufacturing to derivatives trading--to bring new ideas.

Vanguard had a formal IT innovation lab in the early 2000s. The lab pursued long-range, "maybe-someday" projects. Its goal was to get people to think about the potential of emerging technologies, Web technologies in particular. But it was an un-Vanguard-like place. The company is the king of low-cost mutual funds, and its innovations are grounded in practical client needs.

That's why CIO Paul Heller led the creation of an ad hoc innovation program. Employees volunteer to work on new ideas, and they generally do so on top of their day jobs, not in lieu of them. A small team of five people is dedicated to innovation, but most of their work involves assisting the ad hoc teams, doing things such as coordinating development scrums to get prototypes going.

Is a lab the right way to keep innovation strong? That depends on your company's culture and the kind of innovation it demands.

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