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Why Business Doesn't Look To IT For Innovation

Most employees outside of IT don’t call their IT teams very innovative, yet most believe technology is growing in importance, our research shows. Can IT still be the hero?

The Innovation Blitz

Think about innovation, and you automatically think big insurance company, right? Probably not. But Allstate Insurance, under the office of its CIO, assigned Matt Manzella the job of chief innovation officer five years ago. (Just over one-fourth of companies in our survey have a chief innovation officer, and more than 70% of the time the role is part of IT.) "Innovation is less about traditional research and development and more about employee engagement," Manzella says.

Allstate runs what it calls "innovation blitzes." Manzella's innovation group works with a business unit to lay out a problem or opportunity, and then it's opened to employees, via an online forum, for ideas and discussion. Blitzes last about 10 days. The best ideas bubble up through voting and a high volume of comments. Business units and IT teams decide which to push into prototypes.

An Innovation Council consisting of top Allstate executives also reviews the results to see if the leading ideas have been adopted. There's even an Innovation Posse, which rounds up the good ideas that didn't make it to the top of the pack but are still worth exploring.

Allstate also stages hack-a-thons, known as Allstate App Attacks, four times a year whereby programmers working on new business systems on their weekends compete for prizes. With these techniques, Allstate collected 4,000 ideas from 20,000 employees in a year. It's implementing 100 of them.

Manzella, speaking at the InformationWeek 500 Conference, explained how one Blitz led to the development of a new process that steered claims around an adjuster if that person is unavailable. Allstate's innovation group produced a lightweight prototype, which the claims department helped to flesh out. Allstate, which implemented the process a year ago, estimates that it saved the company $18 million by reducing the time claims assigners and adjusters spend in meetings and reducing errors associated with claims processed after employee vacations.

Manzella offers three pieces of advice for developing innovation practices: Get top executives to buy in and participate; get business departments to do the same; and respond rapidly to comments and suggestions.

5 Next Steps
Help Your Tech Heroes Thrive
1. Take an honest assessment Is IT only the break-fix group that's called in for forgotten passwords? Or is IT expected to drive great things, with funding and training to support the mission? What are the examples that prove the innovation case?
2. Organize for success Think transparent, flat, and collaborative. Creative companies have set up processes for drawing ideas out of business units, often using online platforms to encourage corporate-wide, crowd-sourced innovation idea generation.
3. Create a realistic budget Whittling IT staff down until no one has time to do anything but put out fires is a fast way send tech leadership up in flames.

4. Train and educate What are the skills people need to spark technology innovation in your company? Business knowledge, communication, technical? Don't shuffle responsibility for training your organization out of IT's hands.

5. Celebrate the heroes IT pros can't wait to be called. They must be embedded in departments and interacting with customers to spot where technology can make companies better. And when you succeed, throw a party.

And as IT organizations look to drive innovation at their companies, be prepared for skeptics. That Allstate claims department with the $18 million savings? It was reluctant to even take part in innovation blitzes because it manages staff time closely to keep productivity high. Now the claims department runs blitzes under its own branding, Gold Mine.

You never know where the next great idea will come from. When Allstate did a blitz around its mobile app, it opened it up to about 5,000 people, producing 200 suggestions, from which 19 turned into actionable ideas that went on to the mobile app road map--including one from a top Allstate trial attorney in an office far from headquarters. "I guarantee you that guy's boss never said, 'Do you have any mobile ideas?'" Manzella says.

Mobility is one big reason the IT team at JPMorgan Chase got more aggressive with innovation. For example, Chase was among the first banks to let customers deposit a check by taking a picture of it with a smartphone. "We were bleeding edge, and that's something new for us," said Paul Heller, senior VP of the bank's corporate Internet group, speaking at the recent TechTomorrow IT leadership conference in Columbus, Ohio.

But Chase's IT team faced doubters when it first pushed the mobile agenda several years ago, when it suggested that the bank should offer text messaging for certain transactions. "Stupid idea" was the initial reaction from a business unit leader, Heller recalls. After some small experiments, which proved popular, that same skeptic is the biggest mobile advocate--and asking why the IT team can't move faster. Chase now has a dedicated strategy team that tracks trends in mobile payments and behavior, and takes those to business units where they work together on potential uses.

Today, it's the huge tech-driven opportunities that are creating the pressure on IT organizations, and the dissatisfaction. Line-of-business leaders see the chance to connect with customers better via smartphones or understand consumers better via high-speed analytics, but they aren't sure how to get there. The IT teams that help them get there will be on the fast track to hero status. --With Charles Babcock and Chris Murphy

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marc112
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marc112,
User Rank: Apprentice
8/1/2014 | 1:33:41 PM
Considering how much these days businesses rely on internet
Considering  how much these days businesses rely on internet to conduct their activity, IT will play a major role inside any company years from now too. The IT department is the one to smooth things over for the others to do their job without encountering any unpleasant events. They are the ones to know which tools on http://www.trendmicro.com/us/home/products/software/password-manager/index.html to making things easier for everyone.
IT Reformer
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IT Reformer,
User Rank: Apprentice
10/29/2012 | 5:21:52 PM
re: Why Business Doesn't Look To IT For Innovation
This is a very insightful article on the perennial challenges the IT Ecosystem faces with many CIO's chasing "shiny objects" and IT mission owners often feeling dis-serviced by the traditional marketing approaches aimed at CIOs.

Four years ago, a dozen standards bodies, think tanks and universities forged a public/private partnership at the urging of Congress and the White House called the IT Acquisition Advisory Council (IT-AAC). This was driven by recognition the statistics showing 75% failure rates of all major federal IT programs. IT-AAC establishes a true IT honest broker that service the needs of the IT consumer, providing a shared cost knowledge exchange that is fills a huge void in the $3.8Trillion dollar IT market. Though the Federal IT market is often years behind the commercial IT market, this initiative could help them leap frog commercial IT in an effort to avert Sequestration's impact.
mchesmore503
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mchesmore503,
User Rank: Apprentice
10/17/2012 | 6:33:12 PM
re: Why Business Doesn't Look To IT For Innovation
Several points are dead on here. How do you not treat IT as a service organization or support function when SLA stands for Service Level Agreement. In many peopleG«÷s view IT is a service/support function and thatG«÷s where it ends, they are not a partner, the business pays them for a service. Wright or wrong that is the truth in many organizations. Should that change? Maybe.
An area that needs to be addressed, although I do not frequently see it even mentioned in conversations such as this one, is security. Full disclosure, this is my field and discipline by choice. I fully understand that we (security folks) are a major impediment in letting a company operate at the bleeding edge. Believe me; we hear your frustration with us. The problem I see with this article and frankly this way of thinking is that it only takes into account the part of the picture that supports the authorG«÷s point of view. There is no mention of risk management nor the threat to an organization by not performing solid due diligence. What about the risk to the organization as a whole by just running forward with an idea that seems to improve productivity? If you try and inject any measure of risk management or threat assessment/awareness you are branded as a G«£drag on innovationG«• or G«£that bunch that always says noG«•. Fifteen years ago we lived and worked in a different world. Cyber threat was a bunch of kids looking to use your hacked server to share MP3G«÷s. Today the landscape is so dramatically different that you cannot even compare the two. TodayG«÷s cyber threat is well organized, well-funded, with an excellent strategic plan and 1000 times the resources you have to defend against them. The threat today is only interested in separating your organization from every penny they have. Threats have no rules, laws, morals, ethics nor feelings to answer to. They are an extreme model of being focused solely on results. The result comes unfortunately at our organizations cost. Cost not only in real dollars but in losses to productivity and innovation precisely because we have to take such extreme precautions to not become a victim. Of course the business unit sees any type of risk management as an obstacle; we are designed to be just such a thing. Keep in mind that a speed bump slows traffic in both directions equally well. Surely many readers will throw up their hands at this statement and think to themselves, same old security crap, but unfortunately this is the world we live in. Ignoring something does not make it go away. We would all prefer that there were no bad people in the world and that the only risk associated with innovation was a failed attempt at doing something different but that is simply not the case.
While I too am saddened that IT has fallen from our once really fun role as innovators and champions of the latest greatest new IT gadget or thing, after almost 20 years in multiple IT disciplines I have hopefully grown mature enough to look at the whole picture and not just the immediate gratification.

Doublewood
jacoblamm
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jacoblamm,
User Rank: Apprentice
10/12/2012 | 12:33:03 PM
re: Why Business Doesn't Look To IT For Innovation
I suspect that part of the disconnect between IT perceiving itself as an innovator and the Business perceiving IT as an innovator has to do with IT classifying G«£inventionsG«• and G«£improvementsG«• as G«£innovationsG«•. Business has a higher bar G«Ű only those inventions and improvements that end up having a market disruptive effect truly qualify as G«£innovationsG«•.
Jacob Lamm
Mark Montgomery
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Mark Montgomery,
User Rank: Strategist
10/11/2012 | 8:22:57 PM
re: Why Business Doesn't Look To IT For Innovation
Nice work Eric

We've been working at the confluence of IT and organizational management for nearly 20 years now. It's really good to see the industry trade publications placing the topic appropriately at the top of the pile of priorities. Some of the related challenges have been cultural, some structural as in hardware and software architecture in neural networks, some educational and unfortunately some cross the line of unhealthy industry alliances that favor IT managers working for vendors despite being on the paycheck of employers. More than one leading consultant/analyst has stated the latter in public. High turnover rates haven't helped, nor has ignorance of IT on boards and the ad spend of incumbents and related influence- conferences, and everything else in the ecosystem -- paid bloggers, etc., certainly hasn't done anything for those of us working to overcome the problem.

The good news apart from higher visibility as shown in this story is that a combination of basic R&D in the public sector and applied R&D in labs like ours have finally come together with advances in underlying hardware, data standards, education/awareness, and frankly economic necessity to overcome the challenges of sameness in IT, commoditization in the enterprise-but ever rising costs, with an emerging new generation of technologies designed from inception for the network environment--not just for innovation, but also crises prevention, differentiation and continuous improvement. If all goes reasonably well it should not be too far in the future that we see wide adoption of intelligent neural networks that better align interests between individuals and their organizations, including IT teams.
Wisesooth
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Wisesooth,
User Rank: Apprentice
10/10/2012 | 5:09:00 PM
re: Why Business Doesn't Look To IT For Innovation
Customers of IT are results oriented and militantly cherish their freedom from IT restrictions. IT is more process oriented, project by project, to keep the company afloat, agile, reliable, and safe from cyber preditors. IT customers couldn't care less about IT effort; they are concerned about their own effort. They hate being called "users" and other "snarl words." IT customers can buy an app for their home device for a nominal amount. They do not understand or even want to know why IT costs so much and takes forever to deliver.

The only way I know that can heal this disconnect is to involve the user community in the process with hands-on participation. That approach promotes customer "buy in" along with an appreciation of the effort required to manage change, protect the company jewels, and provide the agility to compete successfully in the marketplace.

The IT group needs to work on its image ongoing, not milestone by milestone. IT needs to show people how their work affects the organization's capabilities. Above all else, IT should stop using acronyms and talk to non-IT people in their language. Don't say "gigabit"; say 1000-speed. Don't say the backbone of the network is "xGbps"; say the network hardware talks to the computers and each other at 10,000-speed. Get the general idea?
EricLundquist
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EricLundquist,
User Rank: Apprentice
10/10/2012 | 12:14:24 PM
re: Why Business Doesn't Look To IT For Innovation
Good point. Staffs that labor without notice are not good for the staff or the company. Trying to develop a reward system around projects is a good idea.
EricLundquist
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EricLundquist,
User Rank: Apprentice
10/10/2012 | 12:13:04 PM
re: Why Business Doesn't Look To IT For Innovation
Good note and good luck getting back into the workforce.
EricLundquist
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EricLundquist,
User Rank: Apprentice
10/10/2012 | 12:11:01 PM
re: Why Business Doesn't Look To IT For Innovation
Sounds like you have something to teach those in corporate IT and their managers.
EricLundquist
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EricLundquist,
User Rank: Apprentice
10/10/2012 | 12:10:04 PM
re: Why Business Doesn't Look To IT For Innovation
Interesting. Business becomes more and more tech driven while putting more and more distance between tech and business staffs.
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Google in the Enterprise Survey
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