The Innovation Anticipation Imperative

Cloud computing. Mobile applications. Social media. Data analytics. The Internet of Things (IoT). Connected devices. Traditional enterprise applications.

These are all driving today’s digital business opportunities, and will continue to shape business models of the future. We know that understanding these new business models is a key to success for today’s IT organizations. But the ability to anticipate and provide innovative solutions is no longer optional; innovative anticipation has quickly become a strategic imperative for IT organizations. 

What does it take to make innovative anticipation a reality in an IT organization?

Ouellette & Associates recently partnered Professors PJ Guinan and Salvatore Parise at Babson College to conduct research examining the factors which enable an innovative IT culture.

We conducted 100 interviews with IT senior leaders from over 60 companies across many different industries: healthcare, automotive, financial services, government, technology products, energy, education, and retail. 

We sought to find the levers that are required to enable the norms, behaviors and beliefs important for a culture that supports and promotes IT innovation: using new technologies, people, and processes in creative ways to create business impact.

In the successful IT organizations, those that have created a culture of innovation, we found these key levers at play:

Business Strategy

For the successful IT leaders we observed, business strategy means anticipating the needs of the business and using IT governance to ensure projects are done on-time, within budget and meet user needs.

Anticipating needs took many forms which included the creation of new roles and responsibilities, structural changes, and new governance approaches. For example, many IT groups are creating specific roles whose responsibility it is to scan the environment for new solutions and position these technologies for possible prototyping and rapid experimentation.

We observed examples that emphasize the importance of anticipating the needs of the business as opposed to reacting to business requirements.

“A large part of my job is attending conferences, taking workshops around the country, and keeping up on the latest technologies from the start-up companies, particularly those involved with cloud and social capabilities,” said a financial institution senior director. “I then bring these ideas back into our organization on a regular basis and we prioritize as a team, and with the business, which one(s) we’d like to experiment with and why. We drive these meetings and the business is always interested because we are able to make the link to business strategy.”

The Entrepreneurial Process

Embedding work processes and structures such as Agile and Human‐Centered Design enables and accelerates innovation. The research indicates that these processes are key to creating an IT culture of innovation driven by the entrepreneurial process.

Agile-based design is clearly not easy but was a critical piece of the innovation efforts of over 90% of the companies we interviewed. Companies diverged in regards to whether or not they were following a complete Agile methodology (using the Agile credo), but all were experimenting with and moving in the direction of some form of Agile for a significant part of their work products.

“In Agile you are working on small increments of work,” said a participant from the health care industry. “The innovation occurs when you can break things into smaller bits of work, show people the prototype, gather their opinions and gain their approval and then move forward.”

Breaking things into smaller bits of work is the classic definition of experimentation in innovation. We create experiments and/or prototypes that are less costly, observe the results, learn from mistakes and then move forward based on the knowledge we have gleaned from the first iteration.

Talent Management

As the demands on IT organizations increase, so do the requirements for successfully managing talent. We all know that hiring the right people with the right skill sets is one of the most important ingredients for success in any industry, but hiring the right skill sets for technology today is not easy. The traditional IT skill sets of project management and software development now require additional skills in innovation, agility, change management, vendor management, and marketing IT’s value.

One global healthcare organization we interviewed gives their top performing IT professionals the opportunity to jump start their innovation abilities with a four-day, intensive hands-on workshop. Teams came from all over the globe and were taught innovation tools, techniques and strategies by day, and worked on real innovation projects by night. A final presentation at the end of the week, which included a new solution for a product or process, was pitched to IT senior managers and entrepreneurs. 

Hiring innovative anticipators, providing opportunities for experiential learning, and demonstrating transformational leadership all contribute to a culture of IT innovation. 

Business Metrics

Capturing qualitative and quantitative measurements – productivity, time to market, business engagement – illustrates the value innovative IT products and processes provide to the business. Measuring the business value of innovative products presents challenges to the IT organization. Compared to other initiatives, it can take more time to realize benefits, and they require forward thinking metrics less geared towards quarterly performance.

IT organizations are experimenting with metrics involving increased prototyping, promoting more agile implementations, as well as measures which encourage team process changes. Most likely, a number of approaches, both qualitative and quantitative, will ultimately measure the business value of creating innovative IT products and processes. More research will be required to determine if some approaches are better than others.

Conclusion

While a single formula for successful IT solutions may not exist, enabling an IT culture of innovation is an imperative for all IT organizations. Digital transformation requires anticipation, entrepreneurial processes, and effective IT leaders who have an open mind for the beauty of new ideas that may run counter to the current way of doing business.

We conducted this research to help IT leaders take their organization and their business to the next level. Download the Creating a Culture of Innovation report and use the guidance we’ve gathered to create, sustain, and measure an Innovative IT Culture in your organization.

About the authors of Creating a Culture of IT Innovation:

Dan Roberts, President & CEO of Ouellette & Associates , meets and strategizes with IT and business executives and their leadership teams across North America on issues relating to IT transformation and culture change, building the IT workforce of the 21st century, and marketing IT's value. He believes that there has never been a better time to be in the IT profession and that those IT professionals who reinvent themselves will thrive in this new environment. He’s the co-author of two books, Unleashing the Power of IT and Confessions of a Successful CIO .

Dr. Patricia Guinan, Associate Professor in the Technology, Operations and Information Management Division at Babson College, teaches multi-disciplinary courses in information technology, cross-functional teamwork, organization design, organization change, social media and management strategy. She is the author of an international award-winning book entitled Patterns of Excellence for IS Professionals: An Analysis of Communication Behavior. Her work has also been featured in Harvard Business Review. 

Dr. Salvatore Parise, Associate Professor in the Technology, Operations, and Information Management Division at Babson College, teaches multi-disciplinary courses in information technology at both the graduate and undergraduate levels.  Dr. Parise has worked directly with managers and executives across a wide range of industries including consulting, technology, healthcare, government, consumer products, financial services, and petroleum. He also has several years of work experience as an electrical engineer and research manager at IBM.