Build A Culture of Innovation Storyboard

Build a Culture of IT Innovation
Enable IT innovation to achieve business goals.
Info-Tech Research Group
Introduction
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 leaders first step towards IT innovation.
This Research Is Designed For:
This Research Will Help You:
IT leaders seeking to create a culture of
Formulate a roadmap to improve your
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.
organizations 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.
IT leaders trying to support a business

strategy to introduce new products or services
into the marketplace.
Executive Summary
To spur innovation in the IT department, the IT leader must bring about the key cultural
preconditions using Info-Techs 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.
IT innovation: A valuable but elusive goal

Whats in this Section:
The importance of IT innovation

Key preconditions for innovation
Sections:
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
IT innovation augments corporate strategy and emerges as the

final stage of IT maturity
Innovation: A Critical Competency
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
Firefighter
Level
1: 1:
Firefighter
A largely reactive IT environment with a focus on
resolving urgent or recurring technology issues to

achieve short-term gains.
Level 2: Housekeeper
The IT department proactively focuses its efforts on
operational activities in order to maintain a stable and

controlled business environment.
Level 3: Innovator
Innovating in good times and bad
IT innovation is often seen as a nice-to-have, and a

natural target for budget cuts in recessionary periods.
The IT environment focuses creatively on achieving
business benefits through novel methods (within the

context of the business) and strategic IT investments.
However, IT innovation becomes all the more

important in these times, as it can make the difference
to your organizations ability to survive.
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.
The importance of IT innovation lies in product &

process improvement
What is innovation anyway?
Two types of innovation
Innovation is creating a new process or tool

and applying it to drive business strategy.
IT innovations are classified by the key benefits

they bring to the organization.
Product or service innovation. IT innovation can
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.
open the organizations eyes to new products or

services that it can offer customers, using its existing
capabilities.
Process innovation. IT innovation can improve the

organizations 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)
Measure the success of innovation strategies by

the impact that IT innovation has on business
performance.
Innovation is taking current or new, emerging
technologies and turning them around into a new or
changed service that [is] supporting the strategic
goals.
Process
Product
Existing
technology
Most
common
Common
New
technology
Rare
Most rare
- Director of ICT at a university
Evaluate the benefits of IT innovation success

Ask these questions to evaluate IT innovation for your organization.
Elements of IT
innovation success
Driving organizational
process improvement
product or service
development
competitive advantage
Driving achievement of
business strategic goals
Achieving business
satisfaction with IT
innovation
Questions to assess the value of achieving IT innovation

success
What are your organizations 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?
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?
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 businesss ability to achieve its goals?
What are the costs to the business of missing those goals?
Despite efforts to innovate, building a culture of innovation

remains a challenge
Innovation remains elusive for some
Key reasons that IT innovation does not pay dividends
In a recent study, only 34% of IT leaders
A different study looked at key reasons why organizations fail to get
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.
value from innovation investment.
Some top reasons cited are:
Risk averse culture (31% cited)

Not enough great ideas (22% cited)
(Source: Innovation 2010)
(Source: The next frontier in IT strategy)
Continued investment in innovation,

despite disappointment in performance,
shows the premium that organizations
place on IT innovation.
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.
Six key preconditions improve ITs ability to innovate

Info-Tech research shows that bringing about key cultural preconditions
drives successful innovation in the IT department.
Info-Techs 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.
Each
Each precondition
precondition addresses
addresses at
at least
least one
one
of
the
key
reasons
for
innovation
failure.
of the key reasons for innovation failure.
Preconditions
To
To improve
improve these
these success
success
metrics,
metrics, work
work on
on each
each of
of the
the
preconditions
preconditions below.
below.
= addresses this problem

Risk Aversion Not Enough Ideas
Business buy-in
Time and resources for innovation
IT awareness of business strategy
Diversity of work experience
Idea exchange
Recognition of IT innovators
Key elements of IT culture drive ITs

ability to innovate
The
The IT
IT leader
leader can
can
adjust
adjust these
these
elements
elements using
using a
a
toolkit
of
policies,
toolkit of policies,
official
official
announcements,
announcements,
and
and formal
formal
processes
processes
CIO
t
ools
Idea
Idea
exchange
exchange
IT
IT workers
workers
have
have aa forum
forum
for
sharing
for sharing
ideas
ideas
Awareness
Awareness
of
of business
business
strategy
strategy
IT
IT workers
workers
understand
understand
the
the business
business
strategy
strategy
Recognition
Recognition of
of
IT
innovators
IT innovators
There
There are
are
motivators
motivators that
that
drive
drive the
the desire
desire
to
to innovate
innovate
Business
Business
buy-in
buy-in
There
There is
is
support
support from
from
the
the business
business
for
for IT
IT
innovation
innovation
Innovation
Innovation
Time
Time and
and
resources
resources for
for
innovation
innovation
There
There are
are
resources
resources
dedicated
dedicated to
to IT
IT
innovation
innovation
Diversity
Diversity of
of
work
work
experience
experience
IT
IT workers
workers
have
have been
been
exposed
exposed to
to
new
new activities
activities
10
Innovation preconditions improve odds of success, but come

at a cost
Innovation preconditions improve your odds of IT
innovation success
The following innovation success metrics are all
improved by the innovation preconditions that InfoTech identifies:
Innovation programs come at a cost
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
Product or service innovation: Driving new product

or service development
Process innovation: Improving operational

efficiency and effectiveness
Driving competitive advantage
sections, which discuss methods for bringing about

each of the preconditions.
Key areas of cost for bringing about the preconditions

include:
Business satisfaction with IT innovation

Advancing business strategic objectives
Measure the value of

achieving those
business strategic
objectives that depend
on IT innovation.
Compare
Compare
Does the value
of innovation
justify its cost?
IT worker and managerial time

Infrastructure use
Monetary rewards and payouts
Measure the estimated

dollar amounts of these
costs using the guidelines
in each section.
11
Prioritize preconditions according to their likely impact on IT

innovation success
Small
Small organizations
organizations need
need to
to focus
focus on
on the
the desire
desire to
to
innovate.
innovate. Starting
Starting with
with a
a small
small pool
pool of
of IT
IT workers,
workers, itit
becomes
becomes more
more important
important to
to ensure
ensure that
that at
at least
least a
a core
core
group
group is
is interested
interested in
in innovating.
innovating.
Large
Large organizations
organizations need
need to
to focus
focus on
on preconditions
preconditions that
that
give
IT
workers
the
capability
to
innovate.
With
many
give IT workers the capability to innovate. With many
innovation-enabled
innovation-enabled IT
IT workers,
workers, IT
IT innovation
innovation will
will follow.
follow.
Large
Increasing
priority
Small
Medium
1. Business buy-in
1. Business buy-in
1. Business buy-in
2. Diversity of experience
2. Idea exchange
2. Recognition
3. Idea exchange
3. Awareness
3. Awareness
4. Awareness
4. Recognition
4. Idea exchange
5. Recognition
6. Time and resources
Private sector
Increasing
priority
Public sector
1. Business buy-in
1. Business buy-in
2. Idea exchange
2. Awareness
4. Awareness
4. Recognition
5. Recognition
5. Idea exchange
Precondition
Precondition priorities
priorities
are
based
on
are based on the
the
magnitude
magnitude of
of
observed
observed correlations
correlations
between
between preconditions
preconditions
and
and innovation
innovation
success
success
(Source: Info-Tech Research
Group; N=209)
12
Plan your path to IT innovation using the 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
Determine your priorities.
Based on your companys 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.
Your innovation roadmap will:
Take into account your organizations current state: what

preconditions are in place, and which ones are not.
Take into account precondition priorities: which steps should

come first.
Info-Techs
Innovation Roadmap and Cost Estimat
or Tool
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 its
worth to your organization? Use the Info-Tech Cost/ Benefit Analysis Tool to frame your thinking.
13
Move from firefighter to housekeeper before you try to

innovate
Before you can start innovating IT has to earn the trust of the business, by
showing it can deliver results consistently and on-schedule.
Why?
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 ITs budget is under
scrutiny.
Move from firefighter to housekeeper

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 Depar
tment
for more details.
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.
14
Communicate the business strategy

Why understanding of the strategy is important

Key steps to bring it about
Challenges and how to overcome them
Sections:
Get business buy-in
Reward innovations
Build the roadmap
15
Showcase the business strategy and the

role of IT innovation in that strategy
Provide motivation as well as guidance
Make sure you understand the business strategy as it
Communication to IT workers, of the importance of

innovation to business strategy, drives innovation
relates to IT, and that you communicate the following

to IT workers:
IT
awareness
of business
strategy
Understanding
Understanding the
the
importance
of
importance of
innovation
innovation helps
helps
define
the
problem
define the problem
that
that innovation
innovation
solves
solves
The business objectives.

How IT innovation will accomplish those objectives.
The benefit to the IT worker of participating in and
advancing those objectives.
100%
80%
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
50%45%
Overall success of IT innovation(% succeed)
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
0%
Do not communicate
to the business strategy helps motive IT workers.
(Source: Info-Tech Research Group; N=216)
Without
Without aa direct
direct link
link to
to business
business strategy,
strategy, IT
IT
innovation
innovation will
will have
have limited
limited value.
value.
Key techniques for communicating strategy
Communicate the importance of IT

innovation
Stay involved in IT innovation
16
Explain the role of IT innovation in the

corporate strategy
IT
awareness
of business
strategy
Explain the strategy and evangelize innovation

Problem
Solution
Many IT workers have an attitude
Make sure your workers understand the companys strategic
of I just do my job.
They lack an awareness of how

they fit into the organizations
broader strategy, and do not
particularly care.
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.
The CIO must first establish and

communicate the long-term
strategic direction.
- Derek Boutang, Director of IT,
Pembina Trails School Division
Cost driver
Estimated magnitude
Occasional
announcements
5 minutes per month

value of IT departments
time
17
Define the role the IT worker plays

within 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 leaders 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.
Cost driver
Estimated magnitude
Added dimension to
performance review
Minimal
IT
awareness
of business
strategy
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 organizations 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) .
18
Case Study: A sense of empowerment

leads to innovation success
IT
awareness
of business
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
Industry: Financial services
Segment: Small business
Source: Michel Bouchard (now with Medisys Health Group)
Situation
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.
Action
Lesson Learned
After an acquisition, the
companys 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
companys market position
began to decline.
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.
19
IT
awareness
of business
strategy
Communicate the importance of

innovation by staying involved
Get involved in innovation
Involvement creates a sense of importance
Formal projects
Even token behaviors on the part of the IT leader can
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.
impact peoples 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.
Against the general trend
This an exception to Info-Techs general

recommendation that IT leaders remain out of the
details of daily IT work.
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.
Cost driver
Estimated
magnitude
Monthly drop-ins on
innovation projects
3 hrs/month of IT
leader time
Casual conversations with IT workers can reveal this

information.
20
Overcome IT worker indifference to

business strategy
Challenge: IT workers can be skeptical of strategy
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.
Watch out for these interpretations of strategy:
IT leader says:
IT worker might hear:
Were repositioning
our product.
Were 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
awareness
of business
strategy
Overcome: Emphasize products, not profits
Try to translate the business strategy into terms that

appeal to the IT workers 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.
Business strategy
Increase market share in the apps market by 20%
while maintaining price level.
IT-friendly version
Improve the quality of our apps, to the point that
we become leaders in the domain. Achieve this by
using the best technology and tools.
21
Get business buy-in

Why business buy-in is important

Sections:
Get business buy-in
Reward innovations
Build the roadmap
22
Business buy-in is critical to 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.
Business
buy-in
Stakeholder involvement drives IT innovation success

IT explains
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.
78%
53%
IT includes stakeholders
76%
56%
IT seeks approval
74%
53%
IT identifies innovators
0%
Yes
No
85%
55%
50%
100%
% achieve innovation success

In
In each
each of
of North
North America,
America, Europe,
Europe, and
and Asia,
Asia, only
only a
a
minority
of
Info-Tech
clients
report
that
they
use
minority of Info-Tech clients report that they use
these
these methods
methods to
to seek
seek business
business stakeholder
stakeholder
involvement
in
IT
innovation.
This
involvement in IT innovation. This is
is a
a major
major area
area for
for
improvement
improvement among
among Info-Tech
Info-Tech clients,
clients, worldwide.
worldwide.
Innovation success is defined in the appendix.
23
Business
buy-in
Avoid the innovation black box

approach
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 ITs
agenda.
Stakeholder involvement drives improvement of

organizational efficiency through IT innovation
IT explains
82%
54%
These leaders hope to impress the business with

productivity improvements, without emphasizing that
IT innovation brought them about.
IT includes stakeholders
81%
58%
While this approach can bring about efficiency

improvements within IT, the impact of these types of
innovation will always be limited.
IT seeks approval
80%
53%
Really impactful innovation that aligns IT with the

business; requires business buy-in from the beginning.
IT identifies innovators
Improving
Improving efficiency
efficiency of
of the
the entire
entire organization
organization requires
requires coordination
coordination
of
of IT
IT innovations
innovations with
with business
business processes
processes and
and practices.
practices. Without
Without
coordination,
IT
innovation
cannot
service
the
future
state
coordination, IT innovation cannot service the future state of
of the
the
business,
and
IT
innovation
cannot
drive
business
change.
business, and IT innovation cannot drive business change.
Yes
No
89%
58%
0%
50%
100%
% achieve organizational efficiency improvement through IT innovation
IT can improve its own efficiency without business buy-in, but improving organizational efficiency requires
coordination with the business. Ultimately it is ITs impact on the broader organization that really counts,
so seek business buy-in for IT innovation.
24
Business
buy-in
Get the business involved in idea

generation
Foster an on-going dialog between the business & IT
Why?
How?
Business-aligned innovation requires an on-going dialog
Work with business leaders to get IT
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.
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 ITs enthusiasm to business
leaders.
Get the business stakeholders included in brainstorming sessions

Why?
How?
Instead of presenting IT innovation as products of the black
Encourage IT workers to bring one of their
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
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.
improve long-term support for IT innovation.
25
Continue business involvement beyond

idea generation
Business
buy-in
Seek approval before pursuing ideas

Why?
How?
It may seem easier to present the business with completed
As part of the approval process for formal
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.
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.
Identify successful innovators to the business

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 longterm business support.
How?
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.
26
Overcome business and IT resistance to

change as an obstacle to business buy-in
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.
Relevant business-facing IT roles:
Business analyst
Technical product manager
Enterprise architect
IT leadership
Business
buy-in
Build personal relationships
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.
Two key benefits of IT-business relationships
Increase businesss willingness to change its

practices as IT innovations dictate.
Help IT learn about the business, leading to better

innovation ideas.
27
Case Study: A business analyst

advocates for change and IT innovation
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
Industry: Insurance
Segment: Mid-sized business
Source: Former IT director at the insurance company
Situation
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.
Action
Lesson Learned
The firms 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.
A motivated business
analyst can have a huge

impact on the businesss
attitude towards IT change
and innovation.
Seek out business analysts
who have demonstrated an
appetite for innovation and
change in prior work
experience.
28
Seek a diversity of experiences

Why diversity of experiences is important

Sections:
Get business buy-in
Seek a diversity of experiences
Create an Idea exchange
Reward innovations
Build the roadmap
29
Seek out IT workers with a diversity of

experience
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.
Diversity of
work experience
Exposing IT workers to new responsibilities

improves innovation success
Exposure
Exposure to
to a
a
variety
of
variety of
environments
environments
stimulates
stimulates idea
idea
generation
generation
100%
74%
50%46%
Overall success of IT innovation (% succeed)
(Source: The Innovation Killer)
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.
0%
Do not expose
See the appendix for the definition of IT

innovation success used in this solution set.
30
Diversity of
work experience
Set up a rotational program
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.
Cost driver
Estimated
magnitude
Added training time

for rotated workers
IT worker salary 5%
for lost working time
Rotate IT workers periodically

What
IT workers should be rotated to new job

responsibilities on a periodic basis.
How
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.
Who
Start the program with IT workers who are interested,

then broaden to all IT workers.
Periodically
Periodically rotating
rotating IT
IT workers
workers brings
brings the
the diversity
diversity of
of
experience
that
IT
workers
need
to
innovate.
experience that IT workers need to innovate.
31
Build teams that reflect a variety of

backgrounds
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)
Diversity of
work experience
Sample project team scenario

Situation
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 highfrequency transactions, that make the new
program radically faster.
Cost driver
Estimated
magnitude
Extra staff on
project teams
1-2 extra FTEs on

some project teams for
3-12 weeks
32
Seek out IT workers with diverse

backgrounds
Diversity of
work experience
Look for diversity in career and outside interests in hiring.

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
Career
experiences
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.
In addition to strong IT capabilities, look for individuals who have unrelated outside interests
with transferable skills.
Outside
interests
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.
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
Cost driver
Estimated magnitude
Additional candidate
assessment
Minimal
Additional avenues of
candidate sourcing
10% increment to cost

of recruiting FTEs
33
Case Study: A diversity of backgrounds

brings a unique perspective
Diversity of
work experience
We appreciate people that have a combination of

backgrounds history or photography or music Its
interesting the analogies that they pull from that world.
- Bar Wiegman, Vice President of IT, GlobalSpec
Industry: Technology
Segment: Medium Enterprise
Source: Bar Wiegman, Vice President of IT, GlobalSpec
Situation
Action
Lesson Learned
When making hiring decisions, Bar sought

GlobalSpec is an
online search engine

for the engineering
profession.
The IT leader, Bar
Wiegman, sought to
foster a culture of
innovation.
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%.
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 companys
products and
services.
34
Overcome reluctance to draw on

outside experiences among IT staff
Diversity of
work experience
Challenge: IT is siloed and territorial
Overcome: Challenge your workers to think outside

the box
IT workers may hesitate to apply outside experiences
The IT leader must take the lead in breaking the ice.
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 problemsolvers it inhibits innovation, which is really about
stepping outside ones intellectual comfort zone.
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.
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.
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.
35
Allocate time and resources for innovation

Why time and resources are important

Key steps to put them in place
Challenges, and how to overcome them
Sections:
Get business buy-in
Reward innovations
Build the roadmap
36
Time and
resources
for
innovation
Allocate time and resources to increase

business satisfaction with IT
Time and resources make innovation possible
A key element standing in the way of innovation is lack

of time and resources.
Allocating time and resources for IT innovation improves business satisfaction with IT innovation, a measure of IT success
100%
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.
Without
Without time
time and
and
70%
IT
Business satisfied withIT innovation (%) resources,
resources, IT
cannot
cannot innovate
innovate
to
achieve
to achieve
business goals.
50%business goals.
33%
Key techniques for allocating

resources
Ad hoc experimentation
Formal program for innovation projects
0%
Do not allocate
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 organizations size makes it far more able to shoulder this risk.
37
Time and
resources
for
innovation
Provide time and tools for low-key

innovation work
The opportunity
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.
Provide resources to
exploit the opportunity
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.
Link ad hoc and formal innovation programs
If informal play leads to a major idea, encourage

employees to formally document the idea to receive
additional resources.
Document whats already been done through the

resources available for ad hoc innovation, so you can
measure the usefulness of informal resources.
How many resources to provide?
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.
Cost driver
Estimated
magnitude
IT worker time
Aggregate IT worker
salary % allocated
Sandbox space
on internal cloud
Minimal additional cost
38
Case Study: A gadget library spurs

exciting innovation in digital media
Time and
resources
for
innovation
They can see how different stuff works and whats

available. That gets people excited about whats next.
- Chris Berk, Director of Technology, Resource Interactive
Industry: Digital media
Segment: Mid-sized business
Source: Chris Berk, Executive Director of Technology
Situation
Resource Interactive
employed over 300

associates, who were
responsible for driving
the companys
business and
technical capabilities.
The company sought
to improve its
associates
understanding of
current technology in
the digital media
space.
Action
Lesson Learned
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.
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.
39
Time and
resources
for
innovation
Provide a more formal process for

obtaining additional resources
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:
Obtain key information from the IT worker
Main idea of the innovation

Stage of development
Potential business benefit
Likely costs to develop and implement
Additional resources as needed

Freedom from some, most or all of the IT workers
normal duties during the period of idea
development.
Cost driver
IT leader time to
review
submissions
Estimated
magnitude
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

Larger
Larger innovations
innovations (with
(with greater
greater investment
investment
costs)
will
require
more
detail
prior
costs) will require more detail prior to
to approval.
approval.
Number of IT workers
5 minutes/month
Setting the precedent that solid ideas get

funding will motivate innovation among IT
workers.
Assumptions underlying business benefit
Make your decision based on:
The innovators prior track record.

Innovators estimate of likelihood of success.
Expected NPV of the project if successful.
Relevance to business strategy.
40
Case Study: In a mid-sized IT department,

grants drive innovation
Time and
resources
for
innovation
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
Industry: Education
Segment: Mid-sized IT department (20 FTEs)
Source: Director of ICT at the university
Situation
Action
Lesson Learned
The university instituted a grants

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).
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.
For smaller organizations,
even a moderate investment

in time and resources for
innovation can bring
significant dividends.
Regardless of your
organizations size, make sure
you have a program that
allows IT workers to apply for
additional capital.
41
Case Study: In a large organization, a

formal innovation program gets results
Time and
resources
for
innovation
I was amazed that we could actually pick up a

phone and call the CFO.
- Former consultant
Industry: Professional services
Segment: Large enterprise
Source: Former consultant
Situation
Action
The company instituted a policy of

A consulting company
employed roughly
3000 consultants in
various areas of
specialty within IT.
The company wanted
to spur innovation
among its consulting
staff.
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.
Lesson Learned
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-toimplement ideas.
Employees will rise to the
challenge if they perceive the
opportunity to make a major
impact.
42
Time and
resources
for
innovation
Manage the portfolio of on-going

innovation projects
Monitor projects that have received funding through your formal process.
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.
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.
Cost driver
Estimated
magnitude
Monitoring time
15 minutes per project

per week
Innovation projects differ
Watch for signs of a slow down
Unlike other projects, innovation
In each successive check-in, IT workers must provide more
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.
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.
43
Implement stage-gating as the portfolio

grows
Problem
Implement
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 ongoing basis.
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.
Solution: stage-gating
Divide the innovation project into a set
of discrete steps, for example:
Time and
resources
for
innovation
Idea refinement
Experimentation
Implementation
Delivery
Delivery:
Distribute the new
tools, and train
users
Sample scenario
A software developer has an idea to automate part of the sales process
using e-forms. She receives a funding grant to develop the idea.
Gate:
Experiment:
Refine the idea:
Small-scale
Identified
Identify potential
usefulness for
implementations
applications within
streamlining sales
to show feasibility
the business
process
Gate:
Functioning
system passes
reliability tests
Implement:
Learn from
experiments to
create a
functioning
system
Gate:
Created
functioning
prototype of key
automated tools
44
Time and
resources
for
innovation
Overcome business resistance to

innovation spending
Challenge: Innovation seems like a nice-to-have
Overcome: Promote innovation as critical to survival
Particularly in lean times, business leaders may look
The IT leader must demonstrate the criticality of IT
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:
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
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.
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.
Barriers to the formal program: increased

difficulty of receiving funding, increased rate of
culling of innovation projects.
Stalling revenues due to reduced product or

service differentiation, suggesting the need for
product innovation.
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.
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.
Ironically, it becomes easier to demonstrate the importance of innovation in times of crisis. As the
companys growth and profit figures fall, the contribution of innovations to these numbers will become
proportionately larger.
45

Why an idea exchange is important

Key steps to create an idea exchange
Sections:
Get business buy-in
Reward innovations
Build the roadmap
46
Provide a forum for idea generation and

refinement
Exchange of ideas drives ITs 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.
Idea
exchange
Providing a forum for IT workers to

brainstorm ideas drives innovation
100%
Innovation,
Innovation, a
a
collaborative
collaborative
82%
Overall success of activity,
IT innovation (% succeed)
activity, requires
requires a
a
forum
forum for
for
brainstorming.
brainstorming.
Proceed with the necessary steps to develop the

idea.
IT innovation is inherently a collaborative activity.
50%46%
(Source: Innovation: The 5 Disciplines)
0%
Do not have forum
See the appendix for the definition of

IT innovation success used in this
solution set.
47
Create networks of information
Idea
exchange
Create organizational networks to spread ideas
Support a flexible network
Networks allow IT workers to share information
Each of these network types is appropriate for

particular contexts.
throughout the organization, facilitating idea

generation and development.
IT workers need to have the option of working in any
Networks are an alternative to the command-and-
one of these networks, as appropriate to the

particular context of innovation.
control style of management, in which the flow of

information is tightly managed
The IT leader should facilitate the creation of each
Several important network types are:

Open source
Allows users to post

information that becomes
browsable for all users
(e.g. Wikipedia)
Hub-and-spoke
Provides access to
information repositories
User to user
Allows for the exchange of

information between
individuals
network type through specific steps shown on the

next few slides.
Easy
If cost is an issue, proceed from the least expensive

to the most expensive options, as shown at left.
Medium
Hard
(Source: Building the Innovation Culture)
48
Idea
exchange
Create virtual watering holes
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.
Cost driver
Building the
online system
Estimated
magnitude
Less than $1k to $10ks
Implement a wiki
Wikis are optimal collaboration tools for managing

the organizations 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 parttime 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-Techs solution set

Implement a Collaboration Platform and
Vendor Landscape Plus: Collaboration Platforms.
49
Idea
exchange
Identify experts in each area
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.
Publish
Publishthe
thelist
listofofexperts
experts
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.
Experts are
system
Experts
arealso
alsousers
usersofofthe
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 goto source for that topic.
Cost driver
Estimated
magnitude
Identify experts
in each area
Minimal
Time spent
answering
questions
IT worker time 5%
50
Arrange the work area to foster

collaboration
User to user: promote face-to-face communication
Arrange the work area
Idea
exchange
Create a team room for brainstorming

Create a team room
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.
Discourage remote working
Despite advances in technology, nothing substitutes

for face-to-face; balance the need for remote working
against a preference for in-person collaboration.
Cost driver
Estimated magnitude
Team room
Facilities cost for one room
Lack of remote
working
Facilities cost for workers

who would be at home
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, thoughtprovoking material.
(Source: Innovators Toolkit)
Make sure to have plenty of whiteboard walls as well.

Use the team room for brainstorming
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)
51
Reward successful innovations

Why rewards for innovation are important

Key steps to put them in place
Sections:
Get business buy-in
Reward innovations
Build the roadmap
52
Reward successful innovations to

motivate innovation
Recognition of
IT innovators
Rewards drive effort & risk-taking
Recognizing successful innovators

improves innovation success
Recognition and rewards play a necessary role in

motivating innovators to innovate.
Incentives
Incentives are
are
needed
needed to
to
motivate
motivate
innovation
innovation
behaviors
behaviors
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.
100%
77%
Rewards drive engagement & innovation
Research by McLean & Company shows that

employee satisfaction with a rewards & recognition
program drives employee engagement.
50%
Overall success of IT innovation (% succeed)
40%
Research by Gallup shows that engaged employees

are more likely to innovate.
(Source: Gallup)
Key techniques for providing rewards
Recognition
Innovation ownership
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.
0%
Do not recognize
See the appendix for the definition of

IT innovation success used in this
solution set.
53
Provide extrinsic & intrinsic motivators
Recognition of
IT innovators
Extrinsic
motivators
come
from outside
Extrinsic
motivators
come
from outside
Intrinsic
motivators
come
Intrinsic
motivators
come
from from
withinwithin
Extrinsic motivators provide something to the
Intrinsic motivators rely on the IT workers desire to
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 innovators

perception within a group (e.g. promotions, nonmonetary awards, and other forms of public
recognition).
successfully innovate, without the need for external

rewards.
Sources of intrinsic motivation include:
Desire to achieve
Belief in the companys mission
Concern for the well-being of customers and the

organization
Private recognition relies on intrinsic motivation.
Recognition relies on extrinsic and intrinsic motivators

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

herself as a successful innovator.
The innovators desire for recognition from the group

motivates him or her to innovate.
The innovators desire to achieve personal innovation

goals motivates him or her; private recognition
confirms that the goal has been achieved.
Each type of motivation influences behavior; make sure to account for both.
54
Recognition of
IT innovators
Deemphasize monetary rewards

Monetary rewards have limited long-term benefits
Monetary rewards are not suited for innovation
Research by McLean & Company shows that tangible
The same research characterizes the tasks that tend
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%.
(Source: Leveraging Recognition)
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:
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.
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.
They are not lasting or meaningful once the tangible

reward has been spent.
(Source: Optimize Rewards and 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)
55
Provide recognition as the main

extrinsic motivator
Recognition of
IT innovators
Provide timely recognition to an innovator
Recognition should lead-in to mentoring
Emphasize recognition over tangible rewards
Aside from providing a reward incentive to potential
In contrast to cash pay-outs, recognition provides a

high level of engagement and motivation.
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)
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.
Cost driver
Estimated
magnitude
IT time to gather
innovation stories
Minimal
56
Case Study: Tata uses a non-cash reward

to drive innovation at the team level
Recognition of
IT innovators
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
Industry: Technology and Manufacturing
Segment: Large Enterprise
Source: Tata Groups Innovation Competition, Bloomberg Businessweek.
Situation
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.
Action
Lesson Learned
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.
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.
57
Use idea ownership to strengthen

intrinsic motivators
Recognition of
IT innovators
Allow innovators to see their ideas through.

Recommendation
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.
Why?
A key motivator for all workers is achievement: the

desire to have an impact on the organization.
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 elses project before it

ever completes.
If IT workers do not receive this important reward, they

will hesitate to innovate.
Mind the intellectual property climate
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.
58
Overcome the threat to collaboration

posed by individual rewards
Recognition of
IT innovators
Challenge: Individual rewards undermine collaboration
Overcome: Mix individual and group rewards
Individual rewards emphasize individual acts of
In addition to recognizing individual innovators, also
innovation and can distract IT workers from working as

a team.
Given the importance of teamwork and

collaboration to innovation, that can be selfdefeating.
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
provide secondary recognition to members of the

innovators 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.
sharing individual credit with those other team

members.
Instead, she might try to develop the idea outside the

context of the team.
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.
59
Build the roadmap

Prioritizing preconditions
Roadmap tool and plan
Conclusions
Sections:
Get business buy-in
Reward innovations
Build the roadmap
60
Implement the roadmap, and assess outcomes to gauge the

success of innovation
Measure innovation success through business results
Key questions to ask business leaders
The success of your innovation program does not
To what extent does IT innovation enable the
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.
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

organizations efficiency in the past six months?
Also measure innovation preconditions
In addition to measuring innovation success, redistribute the IT survey in

the Innovation Roadmap & Cost Estimator Tool to
evaluate the impact of your program on these
preconditions.
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.
61
Showcase ITs innovative potential with some quick wins

Early innovation successes will make it possible to implement your
innovation roadmap.
The goal
The plan
An IT leader hoping to change the culture to one

more encouraging of innovation, needs to
establish ITs 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.
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
With innovation
innovation successes
successes in
in hand,
hand, promote
promote your
your IT
IT innovation
innovation program
program at
at the
the executive
executive table.
table.
Get a seat at the executive table or advocate for innovation through an intermediary
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

62
Conclusions
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.
63
Appendix
Definition of innovation success

Bibliography
Sections:
Get business buy-in
Reward innovations
Build the roadmap
64
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
65
Bibliography
"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.
Coffman, Bryan, Building the Innovation Culture , Innovation Labs. Downloaded September 2011.
The next frontier in IT strategy: A McKinsey Survey, McKinsey & Company, 2007.
Carlson, Curtis R and Wilmot, William W. Innovation: The Five Disciplines for Creating What Customers Want. Crown Publishing
Group, 2006.
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.
OSullivan, 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>
66

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Build a Culture of IT Innovation

Enable IT innovation to achieve business goals.

Info-Tech Research Group

This Research Will Help You:

IT leaders seeking to create a culture of

Formulate a roadmap to improve your

innovation in their departments, but who are

IT leaders trying to improve on an existing

IT leaders facing pressure from business

organizations capacity for IT innovation.

Understand the necessary cultural

Learn the steps you will need to take to bring

IT leaders trying to support a business

Info-Tech Research Group

Info-Tech Research Group

IT innovation: A valuable but elusive goal

The importance of IT innovation

IT innovation augments corporate strategy and emerges as the

A recent study showed that 26% of organizations

For IT, innovation offers the chance to better align its

The desire to innovate can come from within the IT

Three Levels of IT Maturity

A largely reactive IT environment with a focus on

resolving urgent or recurring technology issues to

The IT department proactively focuses its efforts on

operational activities in order to maintain a stable and

IT innovation is often seen as a nice-to-have, and a

The IT environment focuses creatively on achieving

business benefits through novel methods (within the

However, IT innovation becomes all the more

This solution set focuses on the transition from Level 2

Info-Tech Research Group

The importance of IT innovation lies in product &

Two types of innovation

Innovation is creating a new process or tool

IT innovations are classified by the key benefits

Using an existing technology in a way that is new for

Creating completely new technologies. For example,

open the organizations eyes to new products or

Process innovation. IT innovation can improve the

Measure the success of innovation strategies by

- Director of ICT at a university

Info-Tech Research Group

Evaluate the benefits of IT innovation success

Questions to assess the value of achieving IT innovation

Info-Tech Research Group

Despite efforts to innovate, building a culture of innovation

Key reasons that IT innovation does not pay dividends

In a recent study, only 34% of IT leaders

A different study looked at key reasons why organizations fail to get

rated themselves as effective at

Despite disappointment, 65% of IT

value from innovation investment.

Some top reasons cited are:

Risk averse culture (31% cited)

(Source: Innovation 2010)

(Source: The next frontier in IT strategy)

Continued investment in innovation,

Info-Tech Research Group

Six key preconditions improve ITs ability to innovate

= addresses this problem

Info-Tech Research Group