A lot of companies have innovations labs, where people try to break out of everyday thinking and spot what's going to change the business six months, a year, five years down the road. There's no magic formula for making them relevant to a given business. How far out should innovation teams be looking? If you're obsessed with ROI, will you miss the game-changing breakthrough? Does creating an innovation team send the wrong message--that the rest of IT doesn't have to innovate?
ADP CIO Mike Capone considered all the factors, and one in particular stuck out. "The challenge I have is everyone wants to work on the new stuff," Capone says.
At ADP, IT's not a back-office or support function. To handle payroll for about half a million companies, like ADP does, IT must be at the heart of the business. So IT is constantly working alongside business units to drive new products.
Capone in just the past few weeks launched ADP's innovation lab--a development the company is expected to note at its analyst meeting today--and Capone's taking a somewhat uncommon, hybrid approach between having a dedicated innovation force and relying on ad hoc swat teams. The lab will have a core team of four or five permanent people, including some from outside with innovation expertise, and then he'll have 15 to 20 people who will rotate through the lab, working there for a stint of about six months. This is out of an IT team of about 5,000 people.
Capone's approach tackles the biggest problem IT innovation labs face: keeping them grounded in the real needs of the business, and its customers. He'll urge teams to think in terms of 6- to 12-month cycles for prototype projects, 18 months at the outside. Too short? Some will say so, but part of that is the pressure on IT to "compress the cycles" of how quickly it can turn out new ideas, Capone says.
Another reason is that IT can create new projects faster today. "The tools have become so powerful," Capone says. There are cloud platforms for delivering server capacity. There are better tools for collaboration--ADP uses iRise visualization software to do rapid prototypes so business partners can say "like that, don't like that" before developers start writing code. And, there are consumer mobile platforms that are training people to expect a nearly constant stream of new capabilities. "My mantra is everything cloud, everything SaaS, everything mobile," Capone says.
Just as I've seen my share of science fairs, I've seen innovation strategies that are working--at places like Procter & Gamble and Vanguard. Both those companies revamped their lab approach in recent years, in very different ways. What works depends on a company's culture and goals. ADP's is another strong option to put in the mix.