build a culture of it innovation

Info-Tech Research Group 1

Build a Culture of IT InnovationEnable IT innovation to achieve business goals.


IT innovation can produce lasting results for the business: new markets, reduced costs, and improved alignment with the business strategy. Influencing the culture is the IT leader’s first step towards IT innovation.

Introduction

IT leaders seeking to create a culture of innovation in their departments, but who are wary of costs or push-back from the business.

IT leaders trying to improve on an existing culture of innovation.

IT leaders facing pressure from business leaders to reduce costs or improve IT effectiveness.

IT leaders trying to support a business strategy to introduce new products or services into the marketplace.

Formulate a roadmap to improve your organization’s capacity for IT innovation.

Understand the necessary cultural preconditions for your organization to achieve IT innovation.

Learn the steps you will need to take to bring about those preconditions, and measure the expected cost.

This Research Is Designed For: This Research Will Help You:


Executive Summary

To spur innovation in the IT department, the IT leader must bring about the key cultural preconditions using Info-Tech’s recommended steps.

1. Info-Tech research identifies six key preconditions for bringing about a culture of innovation in the IT department:

◦ Business buy-in. While IT can always innovate inside a ‘black box’, it has to work with the business to have a real impact on the organization.

◦ Time and resources for innovation. Innovation is risky. The organization must provide employees with time and resources to invest in innovative ideas, or few IT workers will innovate.

◦ IT awareness of business strategy. Innovation requires an end-goal. Help IT workers understand the objectives of the organization and let them figure out how to get there.

◦ Diversity of experience. Innovation thrives on diverse backgrounds and experiences. Applying concepts from one domain to problems in another allows teams and individuals to come up with radically new solutions and approaches.

◦ Idea exchange. Innovation is a collaborative activity. Facilitate the exchange of information in a variety of contexts.

◦ Recognition of IT innovators. While individual monetary rewards do not promote innovation, individual recognition does.

2. In this solution set, Info-Tech provides the key steps to achieve each of these preconditions, as cost effectively as possible.

3. Achieving a culture of innovation may be easier than you think. The aggregate cost of the strategies Info-Tech recommends can be well under $100k.

4. The Innovation Roadmap & Cost Estimator Tool will evaluate the gaps in your organization, prioritize the preconditions based on your organizational characteristics, and tally the expected cost of achieving a culture of innovation. Compare the cost of achieving innovation with the organizational benefits of IT innovation, to assess whether the roadmap makes sense for you.

http://www.infotech.com/research/it-innovation-roadmap-cost-estimator-tool


What’s in this Section: Sections:

IT innovation: A valuable but elusive goal

IT innovation: an elusive goal

Communicate the strategy

Get business buy-in

Seek a diversity of experience

Allocate time and resources

Create an idea exchange

Reward innovations

Build the roadmap

• The importance of IT innovation• Key preconditions for innovation


• IT innovation is often seen as a nice-to-have, and a natural target for budget cuts in recessionary periods.

• However, IT innovation becomes all the more important in these times, as it can make the difference to your organization’s ability to survive.

• A recent study showed that 26% of organizations point to innovation as a key priority of corporate strategy; 45% see it as a top-3 priority.

(Source: Innovation 2010)

• For IT, innovation offers the chance to better align its services with business goals and improve its own performance.

• The desire to innovate can come from within the IT department or from the business side.

Three Levels of IT Maturity

Stage 1: Firefighter• A largely reactive IT environment with a focus on resolving urgent or recurring technology issues to achieve short-term gains.

IT innovation augments corporate strategy and emerges as the final stage of IT maturity

Innovation: A Critical Competency

Innovating in good times and bad

Level 1: Firefighter

Level 2: Housekeeper

Level 3: Innovator

• The IT department proactively focuses its efforts on operational activities in order to maintain a stable and controlled business environment.

• The IT environment focuses creatively on achieving business benefits through novel methods (within the context of the business) and strategic IT investments.

This solution set focuses on the transition from Level 2 to Level 3. For information about getting to Level 2, see

Move to a Stable and Controlled IT Department.

http://www.infotech.com/research/ss/it-move-to-a-stable-controlled-it-department


Most rare

CommonMost common

IT innovations are classified by the key benefits they bring to the organization. • Product or service innovation. IT innovation can

open the organization’s eyes to new products or services that it can offer customers, using its existing capabilities.

• Process innovation. IT innovation can improve the organization’s methods for providing its current products and services, allowing it to provide these at a higher quality (effectiveness) or with fewer expenses (efficiency).

(Source: Innovator's Toolkit)

What is innovation anyway?

Innovation is creating a new process or tool and applying it to drive business strategy.

• Using an existing technology in a way that is new for your company. For example, bringing social collaboration tools into your IT department.

- or -

• Creating completely new technologies. For example, creating a new algorithm to retrieve from a specialized database.

Measure the success of innovation strategies by the impact that IT innovation has on business performance.

Two types of innovation

The importance of IT innovation lies in product & process improvement

Innovation is… taking current or new, emerging technologies… and turning them around into a new or changed service that… [is] supporting the strategic goals.

- Director of ICT at a university

Process Product

Existing technology

New technology Rare


Ask these questions to evaluate IT innovation for your organization.

Evaluate the benefits of IT innovation success

Driving organizational process improvement

Driving organizational product or service development

What are your organization’s process improvement needs to remain competitive in your industry?What would be the impact on profit margins of meeting these needs?What is the pace of new product or service introduction in your industry?What is the first-mover advantage in your industry; what are the incremental profits for new products or services over existing products or services?

Driving organizational competitive advantage

What are revenues and profit margins for market leaders in your industry?What is your current competitive position, and what would be the impact on profits of attaining market dominance?

Driving achievement of business strategic goals

To what extent does your business strategy currently rely on IT innovation?To what extend does the current pace of IT innovation meet the business expectation?How do gaps between business expectation and IT innovation performance affect the business’s ability to achieve its goals?What are the costs to the business of missing those goals?

Achieving business satisfaction with IT innovation

Elements of IT innovation success

Questions to assess the value of achieving IT innovation success


• A different study looked at key reasons why organizations fail to get value from innovation investment.

• Some top reasons cited are:

◦ Risk averse culture (31% cited)

◦ Not enough great ideas (22% cited)(Source: Innovation 2010)

Innovation remains elusive for some

• In a recent study, only 34% of IT leaders rated themselves as effective at introducing IT innovation that drives competitive advantage.

• Despite disappointment, 65% of IT leaders take technology-driven innovation into account when formulating IT strategy.(Source: The next frontier in IT strategy)

• Continued investment in innovation, despite disappointment in performance, shows the premium that organizations place on IT innovation.

Key reasons that IT innovation does not pay dividends

Despite efforts to innovate, building a culture of innovation remains a challenge

The failure of many IT departments to innovate, coupled with strong corporate interest in innovation, creates an opportunity for IT leaders to shine by taking the right steps to foster innovation.


Info-Tech research shows that bringing about key cultural preconditions drives successful innovation in the IT department.

Six key preconditions improve IT’s ability to innovate

PreconditionsBusiness buy-inTime and resources for innovationIT awareness of business strategyDiversity of work experienceIdea exchangeRecognition of IT innovators

Risk Aversion Not Enough Ideas= addresses this problem

Info-Tech’s definition of IT innovation success:• IT innovation driving organizational process improvement.• IT innovation introducing new products or services.• IT innovation creating competitive advantage.• Achieving business satisfaction with IT innovation.• IT innovation leading to achievement of business objectives.

To improve these success metrics, work on each of the

preconditions below.

Each precondition addresses at least one of the key reasons for innovation failure.


Key elements of IT culture drive IT’sability to innovate

Time and resources for innovationThere are resources dedicated to IT innovation

Diversity of work experienceIT workers have been exposed to new activities

Business buy-inThere is support from the business for IT innovation

Idea exchangeIT workers have a forum for sharing ideas

Innovation

Recognition of IT innovatorsThere are motivators that drive the desire to innovate

Awareness of business strategyIT workers understand the business strategy

CIO tools

The IT leader can adjust these

elements using a toolkit of policies,

official announcements,

and formal processes


• Like any organizational change initiative, the effort to build a culture of innovation will come at a cost.

• These costs are discussed in detail in the following sections, which discuss methods for bringing about each of the preconditions.

• Key areas of cost for bringing about the preconditions include:

◦ IT worker and managerial time

◦ Infrastructure use

◦ Monetary rewards and payouts

Innovation preconditions improve your odds of IT innovation success• The following innovation success metrics are all

improved by the innovation preconditions that Info-Tech identifies:

◦ Product or service innovation: Driving new product or service development

◦ Process innovation: Improving operational efficiency and effectiveness

◦ Driving competitive advantage

◦ Business satisfaction with IT innovation

◦ Advancing business strategic objectives

Innovation programs come at a cost

Innovation preconditions improve odds of success, but come at a cost

Measure the value of achieving those business strategic objectives that depend on IT innovation.

Measure the estimated dollar amounts of these costs using the guidelines in each section.

CompareDoes the value of innovation justify its cost?


Prioritize preconditions according to their likely impact on IT innovation success

1. Business buy-in

2. Diversity of experience

3. Idea exchange

4. Awareness

5. Recognition

6. Time and resources

1. Business buy-in

2. Idea exchange

3. Awareness

4. Recognition



1. Business buy-in

2. Recognition

3. Awareness

4. Idea exchange



Large Medium Small

Increasing priority

1. Business buy-in

2. Idea exchange


4. Awareness

5. Recognition


1. Business buy-in

2. Awareness


4. Recognition

5. Idea exchange


Private sector Public sector

Increasing priority

(Source: Info-Tech Research Group; N=209)

Precondition priorities are based on the

magnitude of observed correlations between preconditions

and innovation success

Large organizations need to focus on preconditions that give IT workers the capability to innovate. With many

innovation-enabled IT workers, IT innovation will follow.

Small organizations need to focus on the desire to innovate. Starting with a small pool of IT workers, it

becomes more important to ensure that at least a core group is interested in innovating.


Plan your path to IT innovation using the Innovation Roadmap and Cost Estimator Tool

Determine your priorities.• Based on your company’s demographics and the results of a short

survey, the tool will prioritize the key preconditions you need to bring into place for your IT organization to start innovating.

• Plan your roadmap. The tool will provide the priority roadmap, showing the steps you should take to achieve IT innovation success as well as a rough cost estimate.

Info-Tech’s Innovation Roadmap and Cost Estimator Tool

Based on advice described in the previous sections, the tool evaluates what you need to start doing to encourage innovation in your department

Your innovation roadmap will:

Take into account your organization’s current state: what preconditions are in place, and which ones are not.

Take into account precondition priorities: which steps should come first.

The tool will estimate the total cost to achieve a culture of innovation in your organization. Use this cost to evaluate your business strategy and strategic reliance on innovation. Will IT innovation cost more than it’s worth to your organization? Use the Info-Tech Cost/ Benefit Analysis Tool to frame your thinking.



http://www.infotech.com/research/costbenefit-analysis-tool

http://www.infotech.com/research/costbenefit-analysis-tool


Before you can start innovating IT has to earn the trust of the business, by showing it can deliver results consistently and on-schedule.

• Perform root cause analyses to determine the cause of recurring IT issues.

• Evaluate which aspect of the IT department (people, process, technology) is the most important to adjust.

See the Info-Tech solution set Move to a Stable and Controlled IT Department for more details.

• Without the trust of the business, you will not have access to funds for the various innovation programs that Info-Tech recommends.

• Fostering innovation is a long-term project and requires long-term business support.

• This applies particularly during periods of economic doubt, when IT’s budget is under scrutiny.

Move from firefighter to housekeeper

Move from firefighter to housekeeper before you try to innovate

Do not try to skip from firefighter to innovator mode. Even the most impressive IT innovations will not distract the business from failures to provide basic services. To secure long-term funding for innovation, get your house in order first.

Why?





Communicate the business strategy



Get business buy-in




Reward innovations

Build the roadmap

• Why understanding of the strategy is important• Key steps to bring it about• Challenges and how to overcome them


Key techniques for communicating strategy

• Communicate the importance of IT innovation

• Stay involved in IT innovation

Do not commu-nicate

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Provide motivation as well as guidance• Make sure you understand the business strategy as it

relates to IT, and that you communicate the following to IT workers:

◦ The business objectives.

◦ How IT innovation will accomplish those objectives.

◦ The benefit to the IT worker of participating in and advancing those objectives.

• Understanding the importance of IT innovation to the business strategy is a major driver of success.

• See the Info-Tech solution set Decode the Real Corporate Strategy to decipher the corporate strategy.

Understanding strategy achieves:• Problem definition: knowing the business strategy, IT

workers can innovate to advance company objectives.

• Motivation: a sense of the importance of IT innovation to the business strategy helps motive IT workers.

Communication to IT workers, of the importance of innovation to business strategy, drives innovation

Showcase the business strategy and the role of IT innovation in that strategy

Understanding the importance of

innovation helps define the problem

that innovation solves

IT awareness of business strategy


Without a direct link to business strategy, IT innovation will have limited value.

http://www.infotech.com/research/ss/it-decode-the-real-corporate-strategy




• Many IT workers have an attitude of I just do my job.

• They lack an awareness of how they fit into the organization’s broader strategy, and do not particularly care.


Explain the role of IT innovation in the corporate strategy

Cost driver Estimated magnitude

Occasional announcements

5 minutes per month × value of IT department’s time

The CIO must first establish and communicate the long-term strategic direction.

- Derek Boutang, Director of IT, Pembina Trails School Division

Problem

• Make sure your workers understand the company’s strategic direction and how IT fits into that.

• At the beginning of IT meetings, reiterate the strategy or update the group on changes in the strategy.

• Throughout your presentations and departmental emails, refer to particular ways in which IT innovation will play into the company strategy.

• For example, when show-casing successful innovations, describe how they advance the business strategy.

• Also describe how the successful innovations benefited the individual IT workers who contributed to them.

Solution

Explain the strategy and evangelize innovation



Translate the business strategy into terms understandable to the IT worker• Every IT worker must have a sense of the role

that he or she plays in the wider organization.• Help the IT worker distill the particular action

items from the high-level strategic direction.• It is the IT leader’s responsibility to translate

high-level, non-technical goals into specific action items for individual IT workers.

• These action-items should feature in the performance reviews for IT workers.

Define the role the IT worker plays within innovation


Added dimension to performance review Minimal

Sample strategic scenario• A hotel with 3 IT FTEs has a strategic goal to improve

customer retention by 5% in the coming year.

The IT leader explains the situation• The IT leader informs the application developer of the

organizational strategy.• She explains that the developer must improve the

usability of the organization’s customer-facing Web interface.

• The developer must improve usability measures on customer satisfaction surveys by at least 20%.

Innovating to achieve company goals: • Researching online, the developer learns about new

HTML 5-based Web page designs that improve visual appeal and usability.

• The developer applies these new concepts to the company Website, improving usability (his objective) but also visual appeal (an unstated goal that also advances the corporate strategy) .



It always goes back to having a vision [and] leading. It was… individuals that were motivated enough.

-Michel Bouchard, Director of R&D, Solution provider

Case Study: A sense of empowerment leads to innovation success

Industry:Segment:

Source:

Financial services Small businessMichel Bouchard (now with Medisys Health Group)

• A small software manufacturer serving the financial industry had 25-30 employees.

• A highly motivated IT group was keenly aware of its importance to the corporate strategy.

• IT workers routinely spent 2-3 weeks per year at conferences, on their own initiative, staying up to date on changes in the industry.

• IT recommended a series of innovations that helped the company stay at the forefront of the market for their high availability transactions platform.

Situation

• After an acquisition, the company’s focus shifted away from empowerment.

• The new management began controlling more of the employees’ schedules, providing operational tasks that filled their days.

• Management did not continue to involve IT in strategic discussions.

• The emphasis on innovation disappeared, and the company’s market position began to decline.

Action

• IT workers respond well when given latitude and told the importance of innovation to the company.

• Empower IT workers to achieve your business goals through innovation.

Lesson Learned



• This an exception to Info-Tech’s general recommendation that IT leaders remain out of the details of daily IT work.

• Even token behaviors on the part of the IT leader can impact people’s perception of their role in the firm.

• For example, if the IT leader takes a few support tickets in his downtime, it communicates to the helpdesk team that their work is important. And that is an important motivator for innovation.

Get involved in innovation

Formal projects• To credibly communicate the importance of innovation

to the business strategy, the IT leader must stay personally involved in innovation.

• Instead of outsourcing monitoring of formal projects to a project manager, the IT leader should remain personally, visibly involved in these projects.

• Doing so communicates the importance of IT innovation to the organization while allowing the IT leader to guide innovation project development.


Involvement creates a sense of importance

Communicate the importance of innovation by staying involved


Monthly drop-ins on innovation projects

3 hrs/month of IT leader time

Formal projects

Informal projects

• For the same reason, it also helps for the IT leader to maintain some awareness of the ad hoc innovation projects on-going at a given time.

• Casual conversations with IT workers can reveal this information.

Against the general trend



Overcome: Emphasize products, not profitsChallenge: IT workers can be skeptical of strategy

• Try to translate the business strategy into terms that appeal to the IT worker’s world view.

• IT workers respond to the themes of:

◦ Making quality products and services

◦ Helping their customers

◦ Mastering the latest technological tools

• Describe the business strategy in these terms, instead of the more commercial concepts often used in the executive suite.

• Many IT workers are skeptical of business strategy.

• They find it intangible, uninspiring, and uninteresting.

◦ They did not become engineers to talk about profits and ROI.

• This apathy can form a barrier in the way of the IT leader who wants to explain business strategy to his IT workers, for purposes of guiding innovation.

Overcome IT worker indifference to business strategy

Watch out for these interpretations of strategy:

“We’re repositioning our product.”

“We’re changing the names of everything.”

“We need to improve profit margins.”

“I want to fire some engineers so I can get a bonus.”

“Our goal is to increase revenue.”

“Your responsibilities will double, but your salary will not.”

IT leader says: IT worker might hear: Business strategyIncrease market share in the apps market by 20% while maintaining price level.

IT-friendly versionImprove the quality of our apps, to the point that we become leaders in the domain. Achieve this by using the best technology and tools.




Get business buy-in



Get business buy-in




Reward innovations

Build the roadmap

• Why business buy-in is important• Key steps to bring it about• Challenges and how to overcome them


IT explains

IT includes stakeholders

IT seeks approval

IT identifies innovators

0% 50% 100%

78%

76%

74%

85%

53%

56%

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NoYes

% achieve innovation success

Without buy-in, IT innovation will not drive business satisfaction with IT• Since the goal of IT innovation is to help the business

achieve its strategic objectives, IT must align its innovation program with the business.

• Info-Tech recommends the following steps to ensure alignment with the business:

◦ Explain IT innovation capabilities to the business.

◦ Include business stakeholders in brainstorming activities.

◦ Seek early approval from the business before pursuing innovation concepts.

◦ Identify to the business those individuals responsible for key innovations.

• These are explained in greater detail below.

Stakeholder involvement drives IT innovation success

Business buy-in is critical to innovation success

Business buy-in

In each of North America, Europe, and Asia, only a minority of Info-Tech clients report that they use

these methods to seek business stakeholder involvement in IT innovation. This is a major area for

improvement among Info-Tech clients, worldwide.


Innovation success is defined in the appendix.


IT explains

IT includes stakeholders

IT seeks approval

IT identifies innovators

0% 50% 100%

82%

81%

80%

89%

54%

58%

53%

58%

NoYes

% achieve organizational efficiency im-provement through IT innovation

Even operational improvement requires business buy-in• Many IT leaders seek the ‘black box’ approach to IT

innovation: driving IT workers to innovate and improve IT efficiency without making the business aware of IT’s agenda.

• These leaders hope to impress the business with productivity improvements, without emphasizing that IT innovation brought them about.

• While this approach can bring about efficiency improvements within IT, the impact of these types of innovation will always be limited.

• Really impactful innovation that aligns IT with the business; requires business buy-in from the beginning.

Stakeholder involvement drives improvement of organizational efficiency through IT innovation

Avoid the innovation ‘black box’ approach

IT can improve its own efficiency without business buy-in, but improving organizational efficiency requires coordination with the business. Ultimately it is IT’s impact on the broader organization that really counts, so seek business buy-in for IT innovation.

Improving efficiency of the entire organization requires coordination of IT innovations with business processes and practices. Without coordination, IT innovation cannot service the future state of the

business, and IT innovation cannot drive business change.

Business buy-in



Foster an on-going dialog between the business & IT

• Business-aligned innovation requires an on-going dialog between the business and IT about how IT can help the business achieve its goals.

• As the business learns about the myriad ways that IT can solve business problems, its support for IT innovation will only increase.

Get the business involved in idea generation

Why?

Why?

• Instead of presenting IT innovation as products of the ‘black box’, get business stakeholders included in the creative process.

• While they will not understand every technological nuance of the conversation, business stakeholders can help focus the conversation while adding their own ideas.

• By making IT innovation a joint business-IT endeavor, you will improve long-term support for IT innovation.

• Work with business leaders to get IT workers invited to operational meetings.

• Attend a few of the meetings and coach IT workers to speak up regarding their ideas.

• The best way to get a dialog going is to show that IT wants to innovate: communicate IT’s enthusiasm to business leaders.

How?

Get the business stakeholders included in brainstorming sessions

How?

• Encourage IT workers to bring one of their key users to IT brainstorming sessions.

• For example, an application developer participating in a brainstorm on user interface design techniques could bring one of the operational staff- people who use his or her software.

Business buy-in


• It may seem easier to present the business with completed innovations than to seek out approval for pursuing new ideas. At the early stage of idea generation, that certainly makes sense.

• As ideas mature and move toward implementation, make sure that your idea generators seek business approval.

• It helps set up expectations for upcoming innovations and gives the business a sense of control.

Seek approval before pursuing ideas

Continue business involvement beyond idea generation

Why?

• As part of the recognition process (identified below), include business executives in announcements concerning successful innovators.

• Showcasing successful innovations is key to demonstrating value for the IT innovation program, and to maintaining long-term business support.

Why?

• As part of the approval process for formal innovation projects (discussed below), solicit feedback from impacted business groups.

• If intended business users express disinterest in the idea, even after a discussion of all the potential benefits, then deny funding to the innovation projects.

How?

Identify successful innovators to the business

• Include the business groups impacted by the innovation in e-mail announcements recognizing key innovations.

• Indicate, in the e-mail, the way in which the IT innovation advanced those groups’ objectives.

How?

Business buy-in


• Part of the way IT can improve business willingness to change is by building personal relationships between IT workers and business people.

• The IT leader must lead by example, by dropping in on operational meetings, having lunch with business execs, etc.

◦ He or she can even directly orchestrate meetings between IT workers and business staff.

◦ In general, IT workers should be encouraged to interact with the business in a non-obtrusive way.

Create change enthusiasts at the interface between IT and the business• IT workers who interact with the business play a key

role in orienting the business towards innovation and change.

• In appointing IT workers to these positions, look for individuals with an interest in innovation and change.

• Demonstrated experience driving IT innovation is key.

• As an alternative, get IT change enthusiasts more involved with the business, without a change in title.

◦ Personal relationships are one way to do this.

Build personal relationships

Overcome business and IT resistance to change as an obstacle to business buy-in

Two key benefits of IT-business relationshipsRelevant business-facing IT roles:

• Increase business’s willingness to change its practices as IT innovations dictate.

• Help IT learn about the business, leading to better innovation ideas.

• Business analyst

• Technical product manager

• Enterprise architect

• IT leadership

Business buy-in


You need to see that conviction in [the BA], to help people grow and to improve.

- Former IT director at the insurance company

Case Study: A business analyst advocates for change and IT innovation

Industry:Segment:

Source:

InsuranceMid-sized businessFormer IT director at the insurance company

• An insurance company with 500 employees needed to implement a new ERP solution.

• The cost of the implementation was $7 million.

• Since the ERP implementation was innovative for the company, management expected a 75-80% chance of failure.

Situation

• The firm’s business analyst became the major advocate for the change.

• He spent two years working with business and IT staff prior to rolling out the new system.

• He solicited requirements from all stakeholders and made sure to incorporate these into the final implementation.

• He actively coached IT and business people how to work with the new system.

• As a result, IT implemented the change within two months with no major obstacles.

Action

• A motivated business analyst can have a huge impact on the business’s attitude towards IT change and innovation.

• Seek out business analysts who have demonstrated an appetite for innovation and change in prior work experience.

Lesson Learned

Business buy-in



Seek a diversity of experiences



Get business buy-in

Seek a diversity of experiences


Create an Idea exchange

Reward innovations

Build the roadmap

• Why diversity of experiences is important• Key steps to bring it about• Challenges and how to overcome them


Do not expose Expose0%

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Creativity thrives on a variety of experiences

• Exposure to a variety of work responsibilities improves IT workers’ innovation capabilities.

• New ideas arise from the ability to see problems from a variety of perspectives.

• Many innovations arise from combining approaches to problems from across disciplines.

• With a variety of backgrounds, your IT workers are empowered to innovate.

(Source: The Innovation Killer)

Exposing IT workers to new responsibilities improves innovation success

Seek out IT workers with a diversity of experience

Key techniques for exposing IT workers to new responsibilities

• Rotate IT workers through different areas

• Build cross-functional teams

• Seek out workers with cross-functional backgrounds as a criterion in recruitment.

Exposure to a variety of

environments stimulates idea

generation

See the appendix for the definition of IT innovation success used in this solution set.

Diversity of work experience



• IT workers should be rotated to new job responsibilities on a periodic basis.

Create T-shaped IT workers

• The organization wants IT workers with deep technical expertise in a particular area.

• Ideally, your IT workers will be ‘t-shaped’, as innovation experts at IDEO (www.ideo.com) put it: deep in one area but having broad expertise as well.

(Source: Innovation Killers)

• For example, an ideal application developer for a treasury operations systems would understand cash flows, database structures, and C++, but would also understand the basics of high frequency trading and asset pricing algorithms.

Rotate IT workers periodically

Set up a rotational program


Added training time for rotated workers

IT worker salary × 5% for lost working time

What

• The new responsibilities should match the previous.

• For example, if a software developer has experience managing and developing for the ERP system, have her work on a line-of-business application.

• The idea is not to completely re-educate workers, but to give a sense of how other departments do things.

How

• Start the program with IT workers who are interested, then broaden to all IT workers.

Who

Periodically rotating IT workers brings the diversity of experience that IT workers need to innovate.


http://www.ideo.com/


Arrange project teams to include people outside the IT department (but inside the company)

• Individuals with diverse backgrounds have an enhanced innovation capability, and the same is true of teams that reflect diverse backgrounds.

• Instead of including only subject matter experts in your project teams, include people who provide additional expertise as well.

◦ These individuals would have an advisory or consultative role, they would not be core project team members.

• That way, your teams will reflect the same ‘t-shape’ in expertise that you want your team members to have.

◦ Since the team structure is temporary, this is an opportunity to bring in people from very different backgrounds.

• Such innovative organizations as IDEO and the Strategic Studies Group at the US Navy have used this management style to achieve innovation success.

(Source: Innovation Killers)

Build teams that reflect a variety of backgrounds


Extra staff on project teams

1-2 extra FTEs on some project teams for 3-12 weeks

Sample project team scenarioSituation• An app-dev team composed of 3 C# software

developers is charged with creating a new user interface for treasury operations.

Introducing diversity• The team invites a user interface designer from

the Web team to participate in the project, as well as a database expert from the high-frequency trading group.

Result• The UI designer recommends a number of new

interface designs, borrowed from Web page design, that make the tool radically easier to use.

• The database expert shows techniques for accessing data, borrowed from the world of high-frequency transactions, that make the new program radically faster.



Look for diversity in career and outside interests in hiring.

• In addition to strong IT capabilities, look for individuals who have unrelated outside interests with transferable skills.

• Having a diversity of secondary interests on project teams can have many of the same benefits as a diversity of functions.

• Individuals who have these backgrounds can contribute new approaches to problems.

• The easiest way to promote diverse experiences in your IT staff is to select for this quality when bringing in new IT workers.

• Career-switchers can provide unique backgrounds from their previous work experience, even if it lies far outside the domain of IT.

• Similarly, people who have international work experience or have worked in a variety of industries can provide unique viewpoints.

◦ These individuals are also more likely to have an openness towards change, since they have experienced change in their own work lives.

• Look for these qualities in potential new hires to help build the culture of innovation.

Seek out IT workers with diverse backgrounds


Additional candidate assessment

Minimal

Outside interests

Career experiences


If the company has diversified people coming from … different countries … that will help in order to make change ... That kind of person has a particular mindset.

- IT Director, Manufacturing

Additional avenues of candidate sourcing

10% increment to cost of recruiting FTEs


We appreciate people that have a combination of backgrounds… history or photography or music… It’s interesting the analogies that they pull from that world.

- Bar Wiegman, Vice President of IT, GlobalSpec

Case Study: A diversity of backgrounds brings a unique perspective

Industry:Segment:

Source:

TechnologyMedium EnterpriseBar Wiegman, Vice President of IT, GlobalSpec

• GlobalSpec is an online search engine for the engineering profession.

• The IT leader, Bar Wiegman, sought to foster a culture of innovation.

Situation

• When making hiring decisions, Bar sought out individuals with transferable skills from diverse outside interests.

• In addition to looking for IT skills, he also selected for individuals who could bring a unique perspective to the table.

• He succeeded in recruiting IT workers with interests in art, history, photography, and other fields.

• IT innovation benefited tremendously. The artist, for example, came up with improvements to the user interface that dramatically impacted customer satisfaction.

• Other ideas that came out of IT have increased site traffic by over 25%.

Action

• In addition to hiring for IT skills, seek out individuals who can bring transferable skills from diverse outside interests.

• These individuals will contribute in unexpected ways to your company’s products and services.

Lesson Learned



Overcome: Challenge your workers to think outside the boxChallenge: IT is siloed and territorial

• The IT leader must take the lead in breaking the ice.

◦ Identify the outside interests of your IT staff.

◦ Attend occasional project planning meetings and challenge staff to come up with ideas that reflect their outside interests.

• For example, ask: “Now, how would a musician respond to that prototype?”

• Once in a while the musically-inclined IT worker might answer: “Well, a musician would point out that the alarm bells in this program sound terrible.”

• That will spur an innovative user interface idea and get IT staff more excited about bringing outside interests into their work.

• IT workers may hesitate to apply outside experiences to their work.

• IT departments put a heavy emphasis on expertise within a narrow technical domain, putting an IT worker who steps outside his or her limits at risk of:

◦ Embarrassment

◦ Angering another IT worker who considers himself the expert in that area

• IT workers often believe in the ethos of “know what you are talking about.”

• While this makes them effective, useful problem-solvers it inhibits innovation, which is really about stepping outside one’s intellectual comfort zone.

• An atmosphere of nervousness can self-perpetuate, as IT workers feel especially hesitant to improvise in front of colleagues who act purely as domain experts.

Overcome reluctance to draw on outside experiences among IT staff

As the representative of the business within IT, the IT leader has special latitude for breaking the conventions of the engineering culture. Use that latitude to drive people outside of narrow modes of thinking.




Allocate time and resources for innovation



Get business buy-in




Reward innovations

Build the roadmap

• Why time and resources are important• Key steps to put them in place• Challenges, and how to overcome them


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IT innovation, a measure of IT success

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Time and resources make innovation possible

• A key element standing in the way of innovation is lack of time and resources.

• IT workers will hesitate to spend their own time and money on innovation, even if they expect a reward from good ideas.

• If the organization does not allow IT workers to innovate on its own time, and using its own resources, many potentially innovative ideas will never get off the ground.

Allocate time and resources to increase business satisfaction with IT

Innovation activity is inherently risky, since most innovative ideas go nowhere. The organization cannot expect the IT worker to bring his or her own free time to the table in pursuing innovative ideas, since the risk of failure is too great. The organization’s size makes it far more able to shoulder this risk.

Key techniques for allocating resources

• Ad hoc experimentation

• Formal program for innovation projects

Without time and resources, IT

cannot innovate to achieve

business goals.


Time and resources for innovation


• Provide resources outside the formal framework for investigating these ideas.

• Allocate space on the internal or public cloud, or on separate dedicated servers, for ad hoc experimentation work.

• These systems would be sandboxes, not production systems.

• If informal ‘play’ leads to a major idea, encourage employees to formally document the idea to receive additional resources.

• Document what’s already been done through the resources available for ad hoc innovation, so you can measure the usefulness of informal resources.

• Some innovation projects require only a minimal contribution of time and resources to move ahead, or to show clear signs of infeasibility.

• This is particularly true at the idea generation stage, when a quick proof-of-concept can show whether an idea will work.

Link ad hoc and formal innovation programs

Provide time and tools for low-key innovation work


IT worker time Aggregate IT worker salary × % allocated

Sandbox space on internal cloud Minimal additional cost

The opportunity

• Organizations have dedicated widely varying proportions of IT workers’ time for innovation.

• Google famously gives 20% (Source: nytimes.com).

• Info-Tech clients have given from 10% to less than 1%, and have seen results.

• Start with 2-3% (about one hour per week per IT worker) and scale up or down depending on results and your business innovation need.

• Start with app devs, user interface designers, technical product managers, architects, and other more creative staff. Then provide time to infrastructure and maintenance personnel as well.

Provide resources to exploit the opportunity How many resources to provide?



They can see how different stuff works and what’s available. That gets people excited about what’s next. - Chris Berk, Director of Technology, Resource Interactive

Case Study: A gadget library spurs exciting innovation in digital media

Industry:Segment:

Source:

Digital mediaMid-sized businessChris Berk, Executive Director of Technology

• Resource Interactive employed over 300 associates, who were responsible for driving the company’s business and technical capabilities.

• The company sought to improve its associates’ understanding of current technology in the digital media space.

Situation

• The company created a gadget library, a set of digital media devices (cameras, phones, etc.) that associates in the Columbus office could access at will.

• The company spent about $15k a year on these devices.

• By combining technology in multiple gadget library devices, one associate created an innovative concept that has the potential to become “a million dollar idea.”

• Associates have contributed in other ways to key innovations using experiences in the gadget library.

Action

• Providing resources to IT staff for experimentation can have surprisingly positive consequences.

• Go beyond providing a share of your existing infrastructure. Provide access to systems that are complementary or competitive with your own: the entire ecosystem of products.

Lesson Learned



• Main idea of the innovation

• Stage of development

• Potential business benefit

◦ Assumptions underlying business benefit

• Likely costs to develop and implement

◦ Include estimate of % of time the innovator wants to devote to working on this

◦ Also include equipment or human resource needs

• Relevance to the business strategy

Allocate serious resources to promising ideas that emerge from ‘play’• If initial ad hoc experimentation shows that an idea

has promise, IT workers may require additional resources to develop their idea.

• For those IT workers who do, provide a formal process for submitting proposals to receive additional funding.

• For those proposals that show promise, your organization will provide:

◦ Additional resources as needed

◦ Freedom from some, most or all of the IT worker’s normal duties during the period of idea development.

Provide a more formal process for obtaining additional resources


IT leader time to review submissions

Number of IT workers × 5 minutes/month

Obtain key information from the IT worker

• The innovator’s prior track record.

• Innovator’s estimate of likelihood of success.

• Expected NPV of the project if successful.

• Relevance to business strategy.

Make your decision based on:

Setting the precedent that solid ideas get funding will motivate innovation among IT workers.


Larger innovations (with greater investment costs) will require more detail prior to approval.


If we get [return] two times out of ten, we are quite happy with that. The times when we succeed we… get a lot out of it.

- Director of ICT at the university

Case Study: In a mid-sized IT department, grants drive innovation

Industry:Segment:

Source:

EducationMid-sized IT department (20 FTEs)Director of ICT at the university

• A university employed 20 IT staff who supported users throughout the school.

• The organization wanted to increase innovation within the IT department to drive operational efficiency (process innovation).

Situation

• The university instituted a grants program for IT workers wanting to pursue innovative ideas.

• It allocated $100k to $200k per year for innovation grants, ranging in size between $10k to $60k.

• IT workers could use the grants to pay for their own time, freeing them from their daily work duties.

• The program generated innovations that have improved service delivery and customer satisfaction.

• One idea in network monitoring won the organization a country-wide IT award.

Action

• For smaller organizations, even a moderate investment in time and resources for innovation can bring significant dividends.

• Regardless of your organization’s size, make sure you have a program that allows IT workers to apply for additional capital.

Lesson Learned



I was … amazed that we could actually pick up a phone and call the CFO.

- Former consultant

Case Study: In a large organization, a formal innovation program gets results

Industry:Segment:

Source:

Professional servicesLarge enterpriseFormer consultant

• A consulting company employed roughly 3000 consultants in various areas of specialty within IT.

• The company wanted to spur innovation among its consulting staff.

Situation

• The company instituted a policy of allowing consultants to submit proposals for new business lines.

• Proposals had to be 40-50 page documents with revenue projections, operational details, and plans to get started.

• The company provided support to execute about 10-15 of these ideas per year, including one data warehousing project that led to an entire new business practice, potentially adding over $100 million to the business.

Action

• Investigating new ideas is an onerous process, but the payoff to the organization can be enormous.

• Larger, more expensive ideas require more detail for approval at each stage of the process than simpler, easy-to-implement ideas.

• Employees will rise to the challenge if they perceive the opportunity to make a major impact.

Lesson Learned



• For innovation projects that have received funding through your formal process, monitor them on an on-going basis, checking in at least weekly.

• The majority of projects will not end up providing value to the firm, so you have to be active in culling the herd.

Manage the portfolio of on-going innovation projects

Risk: effect on staff morale of being part of a failed project.Mitigation: emphasize to staff that their work constitutes useful research into a potential path.

Monitor projects that have received funding through your formal process.

Innovation projects differ

• Unlike other projects, innovation projects are often initiated with an expectation that the project has a good chance of delivering no tangible result to the company.

• The focus for the IT leader managing these projects is to gain information as quickly as possible that will allow him or her to make a decision about the fate of the project.

Watch for signs of a slow down

• In each successive check-in, IT workers must provide more information about the likelihood of the assumptions underlying business value.

• If two weeks go by without new information, that is a warning sign to the IT leader that the project is stalled indefinitely. Ask for an explanation or terminate the project.

• Instruct IT workers to focus on those assumptions that most affect the business value of the innovation.

• Watch out for innovation ideas that take too many forms over the course of the project. If the idea no longer resembles the original concept, it could indicate an IT worker who cannot let go.


Monitoring time 15 minutes per project per week



Delivery:Distribute the new tools, and train users

Refine the idea:Identify potential applications within the business

Gate:Functioning system passes reliability tests

Gate:Identified usefulness for streamlining sales process

Experiment:Small-scale implementations to show feasibility

Gate:Created functioning prototype of key automated tools

• Tie allocation of resources to stages, and allot a maximum time to each.

• Evaluate projects at the transition from one stage to the next: the gates.

• At each gate, projects are either terminated, given more time at that stage, or sent to the next stage.

• Assemble a team of IT leaders with experience in the relevant area to evaluate these transitions.

• Divide the innovation project into a set of discrete steps, for example:

◦ Idea refinement

◦ Experimentation

◦ Implementation

◦ Delivery

• Once your organization has developed a portfolio of ten or more funded innovation projects, it will become difficult for the IT leader to monitor projects on an on-going basis.

Implement stage-gating as the portfolio grows


Problem

Solution: stage-gating

Implement

Implement:Learn from experiments to create a functioning system

Sample scenarioA software developer has an idea to automate part of the sales process using e-forms. She receives a funding grant to develop the idea.



Overcome: Promote innovation as critical to survivalChallenge: Innovation seems like a nice-to-have

• The IT leader must demonstrate the criticality of IT innovation to business survival, especially in times of crisis.

◦ Far from a nice-to-have, innovation can make the difference for organizational survival.

• In budget meetings with senior executive, point to the following if innovation spending comes under attack:

◦ Narrowing profit margins due to increasingly competitive pricing in your key markets. This suggests the need for process innovation.

◦ Stalling revenues due to reduced product or service differentiation, suggesting the need for product innovation.

• Also point out that the ability to generate IT-specific innovation is a unique capability of the IT department, and must reside outside of R&D.

• Particularly in lean times, business leaders may look at innovation spending as a luxury the business cannot afford.

• This perception can present a barrier to spending on both informal and formal innovation programs, leading to:

◦ Barriers to the informal program: lack of resources for ad hoc experimentation, increasingly managed work schedules for IT workers with no time set aside for ‘play’.

◦ Barriers to the formal program: increased difficulty of receiving funding, increased rate of culling of innovation projects.

• Some business leaders may also perceive the IT innovation program as competing with dedicated Research and Development, possibly leading to increased resistance from R&D stakeholders.

Overcome business resistance to innovation spending

Ironically, it becomes easier to demonstrate the importance of innovation in times of crisis. As the company’s growth and profit figures fall, the contribution of innovations to these numbers will become proportionately larger.







Get business buy-in




Reward innovations

Build the roadmap

• Why an idea exchange is important• Key steps to create an idea exchange• Challenges and how to overcome them


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Exchange of ideas drives IT’s ability to innovate

• Despite the stereotype, IT workers are social creatures.

• Exchange of ideas allows IT workers to quickly gather the information they need to:

◦ Decide whether an innovation idea is feasible.

◦ Proceed with the necessary steps to develop the idea.

• IT innovation is inherently a collaborative activity.

(Source: Innovation: The 5 Disciplines)

Providing a forum for IT workers to brainstorm ideas drives innovation

Provide a forum for idea generation and refinement

Idea exchange

Innovation, a collaborative

activity, requires a forum for

brainstorming.




• Each of these network types is appropriate for particular contexts.

• IT workers need to have the option of working in any one of these networks, as appropriate to the particular context of innovation.

• The IT leader should facilitate the creation of each network type through specific steps shown on the next few slides.

• If cost is an issue, proceed from the least expensive to the most expensive options, as shown at left.

Create organizational networks to spread ideas

• Networks allow IT workers to share information throughout the organization, facilitating idea generation and development.

• Networks are an alternative to the command-and-control style of management, in which the flow of information is tightly managed

• Several important network types are:

Support a flexible network

Create networks of information

User to userAllows for the exchange of information between individuals

Open source

Allows users to post information that becomes browsable for all users (e.g. Wikipedia)

Hub-and-spoke Provides access to information repositories

(Source: Building the Innovation Culture)

Easy

Medium

Hard

Idea exchange


• Wikis are optimal collaboration tools for managing the organization’s accumulated knowledge on a particular subject.

• Start with an open wiki that allows everyone to author and edit content.

• Provide user training about using the wiki and authoring content.

• Assign a content management specialist the part-time responsibility of supervising the site.

• As subscribership grows for particular areas of the site, the supervisor will create ownership controls for those areas.

• Free wiki tools are available. The free collaboration platform Elgg includes wiki functionality, for example.

• For further information, see Info-Tech’s solution set Implement a Collaboration Platform and Vendor Landscape Plus: Collaboration Platforms.

Open source: create “virtual watering holes”

• Create a collaborative portal for storing information of interest to the network of IT workers, to facilitate innovation.

• Collaboration tools should be organized around communities of interest: individuals within the organization who share an interest in a particular topic.

• These are not necessarily individuals tasked with working on a particular project. For example, IT workers from across the organization may have interest in using mobile devices at work, for widely varying applications.

Create “virtual watering holes”


Building the online system Less than $1k to $10k’s


Implement a wiki

Idea exchange

http://www.infotech.com/research/ss/implement-a-new-collaboration-platform



http://www.infotech.com/research/ss/select-the-right-collaboration-platform


• Management must maintain the list of experts in each field, and make it available electronically.

• Allow IT workers to volunteer for expert roles.

• Expertise should be part of the annual performance assessment, and play a part in promotion decisions.

• Once you have implemented a wiki, use it to store and publicize the list of experts.

• Individuals can update their own pages on the wiki with their areas of expertise as well as other interests.

Hub-and-spoke: identify experts

• A key element of fostering innovation is identifying those individuals who are experts in particular areas.

• Management should publish a list of key topic areas, that IT workers can use while exploring new ideas.


• The purpose of the expert is to distribute information about his area of specialty.

• Since many innovations combine ideas from across fields, having these individuals available plays a key role in facilitating innovation.

Experts are also users of the system• An expert in one field will access other experts when

working on his or her own projects.

• However, it is fundamentally a hub-and-spoke network configuration because the expert in one area is the go-to source for that topic.

Publish the list of experts

Identify experts in each area


Identify experts in each area Minimal

Time spent answering questions

IT worker time × 5%

Experts are also users of the system

Publish the list of experts

Idea exchange


• Despite advances in technology, nothing substitutes for face-to-face; balance the need for remote working against a preference for in-person collaboration.

• Teach IT workers to become brainstorm facilitators.

• In the initial phase of a brainstorm, the facilitator encourages the free flow of information.

• In the next phase, team members select the ideas that seem most plausible.

• A variety of methods exist for this. In one method, everyone gets three votes and uses them to mark three ideas that he or she likes.

(Source: Bootcamp Bootleg)

User to user: promote face-to-face communication

• Design the IT work area to foster easy communication between workers.

• Cubicle walls should be low.

• Lower-level workers should be in cubicles, not offices.

• Keep IT workers in varying areas of responsibility close together: cross-pollination of ideas across departments is a key driver of innovation.


Create a team room for brainstorming

Arrange the work area to foster collaboration


Team room Facilities cost for one room

Lack of remote working

Facilities cost for workers who would be at home

Arrange the work area

Discourage remote working

• Create a team-room: in addition to the normal workspace, provide a group working room that workers can use for trading ideas.

• Line the walls of the team room with poster boards to allow IT workers to post interesting, thought-provoking material.

(Source: Innovator’s Toolkit)

• Make sure to have plenty of whiteboard walls as well.

Create a team room

Use the team room for brainstorming

Idea exchange



Reward successful innovations



Get business buy-in




Reward innovations

Build the roadmap

• Why rewards for innovation are important• Key steps to put them in place• Challenges and how to overcome them


Rewards drive effort & risk-taking

• Recognition and rewards play a necessary role in motivating innovators to innovate.

• In describing the patent system, Abraham Lincoln famously remarked that it “added the fuel of interest to the fire of genius.” (Source: uspto.gov) Your recognition and rewards program must do the same.

Recognizing successful innovators improves innovation success

Reward successful innovations to motivate innovation

Small rewards can go a long way. The rewards Info-Tech recommends here are small relative to the impact of key innovations, but Info-Tech research shows that they have a major impact on innovation success.

Recognition of IT innovators

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Incentives are needed to motivate

innovation behaviors

Rewards drive engagement & innovation• Research by McLean & Company shows that

employee satisfaction with a rewards & recognition program drives employee engagement.

• Research by Gallup shows that engaged employees are more likely to innovate. (Source: Gallup)

Key techniques for providing rewards

• Recognition• Innovation ownership




• Intrinsic motivators rely on the IT worker’s desire to successfully innovate, without the need for external rewards.

• Sources of intrinsic motivation include:

◦ Desire to achieve

◦ Concern for the well-being of customers and the organization

◦ Belief in the company’s mission

• Private recognition relies on intrinsic motivation.

Extrinsic motivators come from outside

• Extrinsic motivators provide something to the innovator in exchange for his or her successful efforts.

• Extrinsic motivators come in two forms:

◦ Tangible: Rewards in the form of property or services (e.g. money, equity, holiday trips, etc.)

◦ Intangible: Rewards that influence the innovator’s perception within a group (e.g. promotions, non-monetary awards, and other forms of public recognition).

Intrinsic motivators come from within

Provide extrinsic & intrinsic motivators

Recognition relies on extrinsic and intrinsic motivators

Public recognition identifies the innovator to the group as a successful innovator.

The innovator’s desire for recognition from the group motivates him or her to innovate.

Private recognition identifies the innovator to him or herself as a successful innovator.

The innovator’s desire to achieve personal innovation goals motivates him or her; private recognition confirms that the goal has been achieved.

Extrinsic motivators come from outside Intrinsic motivators come from within

Each type of motivation influences behavior; make sure to account for both.



• The same research characterizes the tasks that tend to benefit the most from monetary rewards. They are:

◦ Mundane and routine

◦ Short-term, one-time project tasks

◦ Project tasks that are in jeopardy if non-completion

• These are the precise opposites of innovation tasks, which tend to be:

◦ Creative and different

◦ Long-term focused

◦ Not tied to a particular project schedule

• Ineffective as monetary rewards are in general, they are particularly ill-suited for motivating innovation.

Monetary rewards have limited long-term benefits

• Research by McLean & Company shows that tangible extrinsic rewards (e.g. money) have only limited benefits for motivating behavior.

• While non-cash rewards improved performance by 38.6%, cash rewards only increased it by 14.8%.

Monetary rewards are not suited for innovation

Deemphasize monetary rewards

Why?

• Monetary rewards decrease the value of the task to the employee, making it something the IT worker has to do instead of something he or she might want to do.

• They lead to a sense of entitlement to the rewards that eventually lessens their impact.

• They are not lasting or meaningful once the tangible reward has been spent.

(Source: Optimize Rewards and Recognition)

(Source: Leveraging Recognition)

Rewards can perform a weird sort of behavioral alchemy: they can transform an interesting task into a drudge. They can turn play into work. And by diminishing intrinsic motivation, they can send performance, creativity, and even upstanding behavior toppling like dominoes.

- Daniel Pink, best-selling author (Source: Drive: The Surprising Truth about What Motivates Us)

(Source: Optimize Rewards and Recognition)



• Aside from providing a reward incentive to potential innovators, recognition also allows you to identify innovation mentors to the rest of the group.

• After a successful innovation, encourage the innovator to give a brown-bag lunch discussion to share their knowledge, which covers:

◦ How they arrived at their original idea: what was the spark?

◦ How they used company resources to develop their idea as easily as possible.

• The brown-bag lunch will provide useful information and, more importantly, inspire others to innovate too.

Provide timely recognition to an innovator

• In contrast to cash pay-outs, recognition provides a high level of engagement and motivation.(Source: Optimize Rewards and Recognition)

Recognition should lead-in to mentoring

Provide recognition as the main extrinsic motivator


IT time to gather innovation stories Minimal

Emphasize recognition over tangible rewards

Timeliness counts

• The same research by McLean & Company shows that you should provide recognition in a timely fashion.

• Send out a weekly e-mail to IT staff with key innovations, identifying the innovators by name.

◦ Or announce key innovations in weekly IT staff meetings, if you have these.

• Only announce innovations at the implementation phase: early stage ideas are of unpredictable value.

• Recognition should stress the contribution of individuals to the business strategy.

(Source: How to Create a Corporate Culture of Innovation)



The more projects there are, the more people are inspired to participate and are encouraging their peers to do so. - Sunil Sinha, CEO of Tata Quality Management Services

Case Study: Tata uses a non-cash reward to drive innovation at the team level

Industry:Segment:

Source:

Technology and ManufacturingLarge Enterprise“Tata Group’s Innovation Competition,” Bloomberg Businessweek.

• The Tata conglomerate had achieved some success in innovating.

• However, the company had a strong need to ‘democratize’ innovation: previously many innovations had come from the top.

• The company wanted to get engineers, analysts, and other workers thinking about ways in which innovation could lead to new products and services.

Situation

• The company instituted an innovation contest and challenged divisions to submit their best innovations to be evaluated by a panel of judges.

• The company offered no cash prizes. Rather, winners of the competition received recognition from their peers and a career-boosting Promising Innovation award.

• This year the company received over 1700 innovation submissions, including one telecom innovation that increased gross margins by almost $6 million.

Action

• Public recognition has a powerful ability to spur innovation.

• Institute a fair, visible process for recognizing great innovations in your organization, regardless of whether you plan to provide cash compensation.

Lesson Learned



Allow innovators to see their ideas through.

• While you should give idea originators a role in idea development, that does mean you have to give legal ownership over ideas generated within the firm.

• If you hope that IT workers will create patentable inventions, ensure that the employment contract makes it clear whom these ideas belong to.

• You should verbally remind IT workers of this agreement, when necessary.

• This will not de-motivate most idea generators. For the most part, recognition and the desire for accomplishment drives these individuals more than the dream of profits.

• Allow innovators who come up with ideas to participate in the projects to develop them: even if you have other resources available who could develop the idea more quickly.

Mind the intellectual property climate

Use idea ownership to strengthen intrinsic motivators

Recommendation

• A key motivator for all workers is achievement: the desire to have an impact on the organization.(Source: Innovation: The 5 Disciplines)

• If innovators are switched off of innovation projects, they will not have the satisfaction of seeing their projects through to completion:

◦ It will become ‘somebody else’s project’ before it ever completes.

• If IT workers do not receive this important reward, they will hesitate to innovate.

Why?



• In addition to recognizing individual innovators, also provide secondary recognition to members of the innovator’s team.

• For example, you might announce a “special thanks to Jane Smith for being the first employee to use HTML 5 in Web development. Also thanks to the other members of her team, namely… ”

• Ownership over the project and mentorship responsibilities still go to the primary innovator, but the rest of the team gets an honorable mention.

• Individual rewards emphasize individual acts of innovation and can distract IT workers from working as a team.

◦ Given the importance of teamwork and collaboration to innovation, that can be self-defeating.

• For example, if an app-dev team member comes up with an innovative idea, she can implement it much more quickly if she works with other team members.

• However, she may hesitate to do so if that means sharing individual credit with those other team members.

• Instead, she might try to develop the idea outside the context of the team.

Overcome the threat to collaboration posed by individual rewards

Overcome: Mix individual and group rewardsChallenge: Individual rewards undermine collaboration

Avoid shifting entirely to group rewards. Individual contributions to team efforts will vary, and your rewards scheme must reflect that fact. Provide recognition to the team and to outstanding individual contributors.




Build the roadmap



Get business buy-in




Reward innovations

Build the roadmap

• Prioritizing preconditions• Roadmap tool and plan• Conclusions


• To what extent does IT innovation enable the business to achieve its strategic goals?

• To what extent has IT innovation allowed the organization to remain competitive, in the past six months?

• To what extent has IT innovation allowed the organizations to create new products and services, in the past six months?

• To what extent has IT innovation improved the organization’s efficiency in the past six months?

Also measure innovation preconditions• In addition to measuring innovation success, re-

distribute the IT survey in the Innovation Roadmap & Cost Estimator Tool to evaluate the impact of your program on these preconditions.

Measure innovation success through business results

• The success of your innovation program does not depend on individual acts of innovation, but on the impact that innovation has on the business.

• The preconditions discussed in this solution set have been found to increase business satisfaction with IT innovation: that is the most direct way to measure the success of your program.

• While formal measurement of business satisfaction with IT innovation is usually not necessary, you should solicit opinions from business executives about the extent to which IT innovation has helped them achieve their strategic objectives.

• Do this before you begin your implementation program, six months into the program, and after one year.

• Also look at the impact of the program on key business results: share price, profits, market share, etc.

Key questions to ask business leaders

Implement the roadmap, and assess outcomes to gauge the success of innovation

The benefits of innovation are inherently unpredictable. However, you should have a sense after a year whether your program is producing benefits or not. Some measures, such as the IT worker rotation program, will take several years to show benefits.



Early innovation successes will make it possible to implement your innovation roadmap.

• Many executive cultures exclude IT from high-level decision-making.

• That makes it difficult for IT to promote itself as a potential driver of innovation at the executive table.

• You may have to rely on your executive manager, the CFO or COO for example, to advocate at the exec table.

• That means that first you have to convince him or her that IT-driven innovation makes sense for the organization.

• Speak in the language of the person you are trying to convince. For a CFO, put together financial projections showing the financial impact of key IT innovations.

• See the solution set Improve Executive Advocacy for IT

• An IT leader hoping to change the culture to one more encouraging of innovation, needs to establish IT’s potential quickly.

• Demonstrate quick wins. If your organization has not promoted innovation previously, your staff likely have some innovations lying in wait that you can use immediately.

Get a seat at the executive table or advocate for innovation through an intermediary

Showcase IT’s innovative potential with some quick wins

The goal The plan• Solicit these ideas through an e-mail to the IT department.

Promise recognition to teams that win buy-in from the business for ideas.

• Pick the two or three ideas that seem likeliest to deliver benefits in the short-term, and present these to the business.

• Once the projects have been delivered, demonstrate to business leaders the benefit each has delivered.

With innovation successes in hand, promote your IT innovation program at the executive table.

http://www.infotech.com/research/ss/it-improve-executive-advocacy-for-it


• The IT leader has the power to drive IT innovation by putting the six cultural preconditions in place:

1. Business buy-in

2. Time and resources for innovation

3. IT awareness of business strategy


5. Idea exchange

6. Recognition of IT innovators

• Part of getting business buy-in is getting your IT organization to a Housekeeper stage of maturity.

• For those preconditions that your department does not currently conform to, follow the steps that Info-Tech recommends to bring about cultural change.

• Use the Innovation Roadmap & Cost Estimator Tool to evaluate your gaps, prioritize next steps, and measure the cost of the entire roadmap.

• Assess whether the strategic need for innovation justifies the cost of cultural transformation. Achieving a culture of innovation may or may not be worth the extra cost for your organization.

• Sustaining innovation requires continued investment. Incorporate innovation spending into your long-term game plan.

Conclusions




Appendix


Get business buy-in





Reward innovations

Build the roadmap

• Definition of innovation success• Bibliography


Definition of innovation success

• Innovation success as used in this solution set is an average of the extent to which IT innovation drives the following:

◦ Organizational process improvement

◦ New product or service development

◦ Competitive advantage

◦ Business satisfaction with IT innovation

◦ Achievement of business objectives


• "A Patent for a President", United States Patent Office. Downloaded September 2011 <http://www.uspto.gov/web/offices/ac/ahrpa/opa/kids/ponder/ponder1.htm>.

• Barone, Lisa, "How to Create A Corporate Culture of Innovatin", Business Insider War Room, 2010. Downloaded September 2011 <http://www.businessinsider.com/how-to-create-a-corporate-culture-of-innovation-2010-6>.

• Bootcamp Bootleg, Hasso Platner Institute of Design at Stanford, 2010.

• Carlson, Curtis R and Wilmot, William W. “Innovation: The Five Disciplines for Creating What Customers Want”. Crown Publishing Group, 2006.

• Coffman, Bryan, “Building the Innovation Culture” , Innovation Labs. Downloaded September 2011.

• Ford, Edward L., "Leveraging Recognition: Noncash incentives to Improve Performance“, Workspan Magazine, November 2006.

• “Gallup Study: Engaged Employees Inspire Company Innovation”, GALLUP Management Journal, 2006.

• “Innovation 2010: A Return to Prominence - and the Emergence of a New World Order”, Boston Consulting Group, 2010.

• Katz, Ralph. “Innovator's Toolkit”. Harvard Business School Publishing Corporation, 2009.

• Lockwood, Thomas and Walton, Thomas. “Corporate Creativity”. Allworth Press, 2009.

• Mediratta, Bharat and Bick, Julie , "The Google Way: Give Engineers Room", New York Times, 2007.

• Muller, Hunter. “The Transformational CIO”. John Wiley & Sons, 2009.

• O’Sullivan, David and Dooley, Lawrence. “Applying Innovation”. SAGE Publications, 2009.

• "Optimize Rewards and Recognition", McLean & Co, 2011.

• Pink, Daniel , “Drive: The Surprising Truth About What Motivates Us”, Penguin Group, 2009.

• Rabe, Cynthia Barton. “The Innovation Killers”. American Management Association, 2006.

• Scanlon, Jessie, "Tata Group's Innovation Competition", Bloomberg Businessweek, 2009. Downloaded September 2011 <http://www.businessweek.com/innovate/content/jun2009/id20090617_735220.htm>

• “The next frontier in IT strategy: A McKinsey Survey”, McKinsey & Company, 2007.

Bibliography

http://www.uspto.gov/web/offices/ac/ahrpa/opa/kids/ponder/ponder1.htm

http://www.businessinsider.com/how-to-create-a-corporate-culture-of-innovation-2010-6

http://www.businessweek.com/innovate/content/jun2009/id20090617_735220.htm

build a culture of it innovation

Documents

culture of innovation

elusive goalit innovation

innovation storyboardflash

business leaders

infotech research group

business goals

strategies infotech

key preconditions