Sunday, July 17, 2016

"CIO Master" Booking Tuning XXXXXXVII: Setting Principles to Run an Innovative IT

The paradox is, innovation does need the certain level of a guideline, even the nature of creativity is about breaking down the outdated rules.

Creativity is becoming increasingly crucial in today’s business environment because it breeds innovation. But it’s common that many IT companies tend to focus more on their core competencies and often forget about the value of innovation management. Without innovation, organizations would be upstaged by the competitors that are creative because disruptive innovation will happen no matter you prepare well or not. IT needs to become a business’s innovation engine because the intersection of IT and people is where innovation happens. So how to set principles to encourage creativity and run an innovative IT in a systematic way?

Setting policies, tuning structure, and making programs as three levers to drive innovation: Innovation does need the certain level of a guideline. Although the nature of creativity is about breaking down the outdated rules and discovering the new way to do things. “Business creativity,” is to apply the creative thinking for problem-solving and achieving business goals. And innovation is to transform the novel ideas into the business value. To manage innovation in a structural way, you need to frame the creative process and leverage limited resources to keep focus, set time limits, apply varying thinking techniques for managing innovation portfolios in a more productive and sustainable way. Hence, the right level of guidelines and the set of principles are important, not to stifle innovations, or get too “pushy,” for making short term results, but to streamline and standardize innovation management as a discipline, not just a serendipity.

Being Customer Centric: Digital is the age of the customer. When managing innovation life cycle, customer involvement at all stages often elicits highly valuable information. Innovation is about transforming novel ideas and achieving its business value. It must prove its value in the market. Listen to customers and involve them in the innovation process to gain insight and empathy. Customers perhaps not always know what they want for the next products or services, but they surely can provide insight into the goals, processes, and their contextual feedback is invaluable. Furthermore, Deep understand of the user through empathetic observation with the innovator using a more inductive approach as to what the customer wants to accomplish “next.”Customer must be willing to pay for it, be it a product, process or service innovation. Hence, customers are one of the most important links in the innovation process.

Setting principles and taking practices to measure IT innovation: It is true that the majority of IT organizations still cannot articulate their economic value to BoDs and shareholders in the common language the audience can understand, and IT performance metrics also is not sufficient in both measuring innovation and communicating IT effectiveness. Because the traditional IT measurement puts too much focus on operational efficiency, the innovation measurement should be oriented to justify innovations that the organization needs. The consumerization of IT changes the way to run IT and business, there is still an IT element necessary to make all those pieces connect and run in a sustainable way. One of the measurement practices is to define process KPIs, which demonstrate the growing capability of the organization to deliver more innovation with high business impact in the future. Select the few (3-5) KPIs, to keep the measure simple and easy to understand. The innovation metrics in the business context include such as, % of revenue from new products introduced, or measure something like % of the profit from new ideas implemented. The goals for measurement is to create new revenue and drive early success to create a positive spiral or build an innovative culture for innovation prosperity.
Keep in mind, setting principles and making policies to manage innovation is not about putting restrictions on what you can do, it is more about monitoring and knowing when things are not going on plan so that you can take appropriate actions at the right time. The leverage point is to structure innovation to keep focus, but not adding too much complexity. In short, the proper standard and processes will help set the right priority and manage innovation portfolio and lifecycle effectively.


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