With that base capability in place, there are two ways for most companies to drive innovation:
1. Build a separate team.
One reason companies succeed is because they focus on delivering quality products predictably. Their operations, product, and technology divisions all strive to eliminate variation and improve efficiency.
But innovation, by its nature, is discontinuous and causes failures. Many innovation case studies point to setting up separate innovation teams, either as incubators or as autonomous groups launching entirely new businesses. IBM, Dow Chemical, Shell, and others have taken this approach successfully for years.
Companies need to set well-defined innovation goals and sponsorship. Sponsorship should be at a senior level, with both line-of-business and technology members. Companies should view their innovation initiatives as an investment portfolio, where diversity is good and poor investments are traded out quickly. Recall that innovation has a high rate of failure; the most successful groups are ruthless about stopping efforts that won't succeed.
Most of the company still must drive ongoing incremental improvements, innovative in their own right, that are important to the main business. And this improvement pace must be supported and just as focused and energized.
2. Leverage a culture of tinkering.
Companies that foster a culture of ingenuity, curiosity, and experimentation can accelerate innovation faster than companies that don't. But for companies to be able to set aside the time and space for people and teams to engage in "tinkering" requires that they first master the base disciplines of quality and operational excellence (current delivery must be close to flawless).
You'll find such companies in many industries, their ongoing success attributable not only to their ability to innovate, but also to out-execute their competitors. At 3M, scientists famously spend 15% of their time on projects they find personally interesting. Some of their greatest successes (e.g., Post-It Notes) didn't result from some innovation session or project, but instead came together over years as ideas and failures percolated in a culture of tinkering.
Historically, one of the best places for innovation, Bell Labs, shared many of the same characteristics: outstanding operational excellence; the willingness to invest in a culture of tinkering; and encouraging scientists, engineers, and even factory teams from multiple disciplines to work in an open environment with clear goals. The results were legendary, from the transistor to Unix to fiber optics.
With these approaches to agility and innovation, the elephant can dance while continuing to reliably handle the day-to-day heavy lifting.
Jim Ditmore is senior VP of technology. operations, infrastructure, architecture, and innovation at Allstate. He has worked in IT for more than 25 years and as a CIO or CTO for the last 15 years. You can read more about Jim's views on IT at Recipes for IT.
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