We’re always thinking about innovation here at Dovetail. This week we’ve been talking about innovation in relation to cost and investment. Editor Diann Daniel at CIO.com addressed this very issue in an interview with James P. Andrew of Boston Consulting Group, continuing her coverage of the 2007 BCG innovation survey. The survey queried over 2,000 senior executives, and found:
”...although companies are spending more on
innovation, many are dissatisfied with the return on those investments.
And although innovation may seem like a strictly business concern, IT
has a crucial role to play.” – The Secrets of IT Innovation
Andrew sums up the root of the problem nicely:
“Problems occur when people confuse invention with
innovation. Invention is new and clever; innovation is a process that
takes knowledge and uses it to get a payback. Invention without a
financial return is just an expense. Ideas are really the sexy part of
innovation and there’s rarely a shortage of them.”
But Andrew cautions that while ideas are
plentiful, execution is where ideas die. As he says, “At the end of the
day all that creativity and all those ideas have to show on the bottom
line.”
So, far more than generating ideas for change and
development, the task of creating a workable path for the development
of those ideas overshadows the entire situation.
This development path emerges as a process, says Andrew. In the briefest form the whole cycle looks like this:
- Generate an idea.
- Commercialize it.
- Realize the value.
That
looks easy doesn’t it? But the point is this is how the business people
think. IT must know this, because IT, as far as Andrew is concerned,
has to drive this process. The business side of the enterprise is
always seeking ways to identify and exploit margins, create new niches,
and develop strategic advantage. IT needs to supply the development
paths to these ends.
To achieve this, IT must acquire three capabilities:
- Know what’s on the agenda of business leaders and what goals for the business they have.
- Know what the current information gaps and deficits are.
- Become proactive about offering the capabilities IT has that the business may not even be aware of.
As we said yesterday, “IT simply doesn’t know enough about how the company makes money” [see Business and IT Are Oceans Apart].
The
business people in any organization will never understand why the
technical people don’t want to know how the company makes money;
business will always assume that this one fact is clear to everyone.
How can IT start to show an interest in the fact that without the money there is no company? How can IT start to learn?
