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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.

Info-Tech Research Group

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.

Info-Tech Research Group

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
Info-Tech Research Group

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.

Info-Tech Research Group

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

Info-Tech Research Group

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
Driving organizational
product or service
development
Driving organizational
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?

Info-Tech Research Group

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.

Info-Tech Research Group

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

Info-Tech Research Group

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

Info-Tech Research Group

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.

Info-Tech Research Group

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

5. Diversity of experience

5. Diversity of experience

6. Time and resources

6. Time and resources

6. Time and resources

Private sector

Increasing
priority

Public sector

1. Business buy-in

1. Business buy-in

2. Idea exchange

2. Awareness

3. Diversity of experience

3. Time and resources

4. Awareness

4. Recognition

5. Recognition

5. Idea exchange

6. Time and resources

6. Diversity of experience

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)

Info-Tech Research Group

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.
Info-Tech Research Group

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.
Info-Tech Research Group

14

Communicate the business strategy


Whats in this Section:

Why understanding of the strategy is important


Key steps to bring it about
Challenges and how to overcome them

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
Info-Tech Research Group

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
Info-Tech Research Group

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.
(Source: Innovator's Toolkit)

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

Info-Tech Research Group

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) .

Info-Tech Research Group

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.

Info-Tech Research Group

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.
(Source: Innovator's Toolkit)

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.

Info-Tech Research Group

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.

Info-Tech Research Group

21

Get business buy-in


Whats in this Section:

Why business buy-in is important


Key steps to bring it about
Challenges and how to overcome them

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
Info-Tech Research Group

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.

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

Innovation success is defined in the appendix.

Info-Tech Research Group

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

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.
Info-Tech Research Group

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.

Info-Tech Research Group

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.

Info-Tech Research Group

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.

Info-Tech Research Group

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.

Info-Tech Research Group

28

Seek a diversity of experiences


Whats in this Section:

Why diversity of experiences is important


Key steps to bring it about
Challenges and how to overcome them

Sections:
IT innovation: an elusive goal
Communicate the strategy
Get business buy-in
Seek a diversity of experiences
Allocate time and resources
Create an Idea exchange
Reward innovations
Build the roadmap

Info-Tech Research Group

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
(Source: Info-Tech Research Group; N=215)

See the appendix for the definition of IT


innovation success used in this solution set.
Info-Tech Research Group

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.

Info-Tech Research Group

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

Info-Tech Research Group

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
Info-Tech Research Group

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.

Info-Tech Research Group

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.
Info-Tech Research Group

35

Allocate time and resources for innovation


Whats in this Section:

Why time and resources are important


Key steps to put them in place
Challenges, and how to overcome them

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
Info-Tech Research Group

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
(Source: Info-Tech Research Group; N=214)

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.
Info-Tech Research Group

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

Info-Tech Research Group

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.

Info-Tech Research Group

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.
Info-Tech Research Group

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.

Info-Tech Research Group

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.

Info-Tech Research Group

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.

Info-Tech Research Group

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

(Source: Innovator's Toolkit)

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
Info-Tech Research Group

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.
Info-Tech Research Group

45

Create an idea exchange


Whats in this Section:

Why an idea exchange is important


Key steps to create an idea exchange
Challenges and how to overcome them

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
Info-Tech Research Group

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
(Source: Info-Tech Research Group; N=215)

See the appendix for the definition of


IT innovation success used in this
solution set.
Info-Tech Research Group

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)

Info-Tech Research Group

48

Idea
exchange

Create virtual watering holes

Open source: create virtual watering holes


(Source: Innovation: The 5 Disciplines)

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.

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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.
(Source: Innovator's Toolkit)

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%

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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.
(Source: Innovation: The 5 Disciplines)

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)

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Reward successful innovations


Whats in this Section:

Why rewards for innovation are important


Key steps to put them in place
Challenges and how to overcome them

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
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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
(Source: Info-Tech Research Group; N=216)

See the appendix for the definition of


IT innovation success used in this
solution set.

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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.
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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)

(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)

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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.
(Source: Optimize Rewards and Recognition)

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

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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.

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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.
(Source: Innovation: The 5 Disciplines)

If innovators are switched off of innovation projects,


they will not have the satisfaction of seeing their
projects through to completion:

It will become somebody 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.
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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.

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Build the roadmap


Whats in this Section:

Prioritizing preconditions
Roadmap tool and plan
Conclusions

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
Info-Tech Research Group

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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.

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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


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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
4. Diversity of experience
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.

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Appendix
Whats in this Section:

Definition of innovation success


Bibliography

Sections:
IT innovation: an elusive goal
Get business buy-in
Allocate time and resources
Communicate the strategy
Seek a diversity of experience
Create an idea exchange
Reward innovations
Build the roadmap
Info-Tech Research Group

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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

Info-Tech Research Group

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>

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