By now it's well known that innovation is a crucial if not the factor that separates successful companies from the laggards. CIOs, while not solely responsible for it, are seen as the stewards of innovation within their organizations. Indeed, "CIOs are the DNA of how companies win," notes Rick Kash, founder of The Cambridge Group, a growth-strategy consulting firm.
Yet parlaying innovation into an organization's success seems an elusive pursuit. Why is this so? It may be that, for all the discussion about innovation, the word itself is misunderstood. The term innovation is so embedded in the collective ongoing discourse among CIOs that I have to wonder whether any appreciation for its meaning remains.
In Kash's view, many executives mistakenly define innovation much too narrowly; i.e. they believe innovation results in inventive new products. By extension, many companies relegate innovation to specific people in the organization, primarily the IT and R&D departments. This is misguided and limits the full innovative capabilities of a company. Kash defines innovation simply as identifying a need in the pursuit of profitability and filling it by "finding a better way" than the systems and methods in place. CIOs, for instance, can be innovative in the use and navigation of information -- coming up with "better ways" for business units and executives to gather, organize, analyze, and apply information.
"The CIO," notes Kash, "having complete access to information, has extraordinary opportunities to innovate" and, by extension, help their companies succeed.
Innovation in Five Steps
If this statement seems exasperatingly unoriginal, Kash adds that successful innovation is simpler than you might think. Overthinking innovation may be the very obstacle that makes its success so elusive. Kash goes as far as to suggest tossing the word innovation altogether. Instead, he proposes innovation as a five-step process.
Too often, IT takes the "If you build it, they will come" approach to innovation. They develop systems and solutions within IT and unveil them to users in the business units. This approach is often met with mixed responses by the users. The first step in the innovation process is to find out what the demand for innovation is among users. Ask them -- before diving into supplying a new product that may not fill a need. After all, there's no innovation in supply without demand. As Kash puts it: "Innovation starts externally [i.e. outside IT] and develops internally."
Truly innovative companies don't confine innovation to IT and R&D, where the "inventors" traditionally reside. Instead, they foster a culture of innovation (what Kash calls "total innovation" in which everyone in the organization is expected to participate. There's never a shortage of ideas from all quarters on "better ways." That's why the next step in leading innovation is culling the best ideas, the ones that will add the most value and boost the company's bottom line.
Kash's definition of innovation as "finding a better way" doesn't confine innovation to reactive measures. Of course, a major aspect of innovation is the introduction of brilliant and entirely new products and solutions. This is the step where you have fun with finding creative solutions by brainstorming with your team and otherwise getting inspired. Remember, says Kash, whatever strokes of genius you yield must still begin with the first step of investigation -- is there a demand for this? -- before implementation begins.
Once your innovation has passed the demand test and proven to be the most valuable to the bottom line, it's time to test it on a kind of focus group -- the people in the organization like to be the heaviest users of your new solution. Since they're the most invested in the product, they're in a sense your toughest customers, and their feedback is invaluable. If they're happy with your innovation, chances are others across the organization will be too.
Now that you've researched the demand, developed the best solution to satisfy it, and tested it on the key users, the final step is to make the business case for enterprise-wide adoption. CIOs will have to be conversant with traditional business analytics tools such as aggregate demand and estimated sales volume. In other words, this is the time to quantify the benefits of your innovation in terms of business creation, growth, and projected increase in profit.
If you approach innovation as a process, a succession of steps beginning with needs assessment, leading innovation successfully should become much less mysterious -- simple, even. Says Kash: "Every CIO in the world can do this."
Rick Kash is co-author, with Nielsen Companey CEO David Calhoun, of How Companies Win: Profiting from Demand-Driven Business Models No Matter What Business You're In (Harper Business), out in October.