Why are business leaders putting IT on their credit card?
The Wall Street Journal recently poked fun at “innovation” as an empty marketing buzzword. They might be on to something, according to the latest research from CA Technologies. Our study of 800 global business and IT leaders found a gap between what organizations say about innovation and how they actually innovate. It should give any executive pause, and I encourage you to spend some quality time reviewing the results.
In my conversations with CIOs, I find the way an IT organization defines innovation is a leading indicator of the size and risk of its innovation business gap. It can be amorphous, defined by popular consensus or defined by the CIO and expressed as a continually refined business process. Many in IT consider their work to be innovative by default. After all, we’re dealing with the latest technologies! We bring business value to new stuff like the cloud, smartphones, tablets, and social media. We take legacy systems and make them more relevant for mobile, touch, voice, biometrics, and more. We must be innovative to do this!
But is that the definition of innovation? One theme that has been coming up again and again in my conversations with CIOs is that they don’t want to be technologists anymore. They want to be business leaders. Technology ownership alone is no longer enough and I’m finding CIOs increasingly trying to define innovation as a first step towards codifying the processes that integrate and sustain innovation throughout the business.
Case in point: A recent meeting I had with a senior IT leader during a visit to Australia. We invited this executive to dinner with several other people to talk about innovation. She had to cancel at the last minute. She called me the next day to ask if I could come to her office and brief her on the discussion. She specifically wanted to know what the other CIOs said about innovation and what I thought. We spent 90 minutes in her office that day, talking about a topic she had never tackled with such intensity with me before.
A similar thing happened when I visited an IT leader at a regional telecommunications company. It was our first meeting, and I’m sure he was prepared for a sales pitch. Five minutes in, I shared some of the early insights we gained through our Innovation Imperative research. The tone of the conversation changed from routine to engaged. He was eager to hear our insights about what his peers were doing (or not doing) about innovation in the enterprise. Our one-hour meeting slipped to 90 minutes because his interest was so strong.
A big part of this change is because the innovation organizations are accustomed to seeing from IT has become commoditized. Users feel like they’re living in the DIY enterprise. Need CRM? Sales force automation? Payroll? Talent management? Distributed call center? Collaborative office apps? Shared storage? Grab your credit card.
IT is perceived as bringing incremental and mostly reactive value. But the IT leaders I speak to don’t see it this way, and don’t like the direction things are headed. They want to bring fundamental, transformative value to their organizations. They want to visibly drive business innovation in a big way. Given their pedigree, they intrinsically know they can do this only if they can define innovation and institutionalize the processes that reliably deliver innovation’s value to the organization.
One of the biggest barriers IT leaders face in accomplishing this is weak connections to other leaders in their organization. Many CIOs are surprised to learn that I know more about the innovative projects in their company than they do. This is borne out by CA Technologies research, where only 19 percent of business leaders reported innovative projects are led by IT, and just 25 percent characterized them as a frequent collaboration with IT.
There’s no magic as to why I might know more about what’s going on in a CIO’s organization. For my team to get something done and be accountable, we must talk to people throughout the organization. We ask people on the business side what they care about, like growing new markets through social or mobile, increasing top-line revenue, and being more competitive. It’s not necessarily about reducing cost.
The landscape has changed dramatically for many parts of many businesses over the past five years and business leaders would welcome knowledgeable leadership from the technology side of the house. For example, the way buyers learn about your company’s products and services bears little resemblance to the way things worked just a few years ago. It’s no longer the same cycle of learning and understanding and buying. It’s largely driven by digital recommendations on social networks and reviews on sites like Yelp or Amazon. And I can tell you with certainty that your sales and marketing departments are struggling with this new buyer behavior, and taking full advantage requires significant technical expertise as well as vision—assets the IT team could certainly provide, if it was paying attention and working much more closely with the business.
Innovation as the new buzzword? Hardly. Among the CIOs I talk to, innovation is the new imperative. They’re eager to innovate, eager to capitalize on the business aspects of technology, and eager to be business leaders. They want to provide value to the sales leadership, the CMO, and the CEO—not just the CFO. They want to be an integral part of an innovative executive team, rather than just making marginal changes inside the glass house. They are, in many cases, now charting their path to achieve that objective. And we, as their trusted partners in IT, need to do all we can to help.
This post was originally posted on CA.com’s Innovation Today blog