“The CIO’s role is changing driven by Cloud and an increasing number of ‘as a Service’ solutions that progressively reduce the organizations dependency on maintaining a high number of specially skilled ICT staff. Under these new conditions organisations have two options – they can make their technology managers, architects and administrators redundant and reap the short term rewards in an uptick in profits and share price or they can retain these highly skilled staff who sit at the intersection of the business and technology and create an impressive innovation team that adds considerably more value to the business. ”
Technology is the driving force behind many of todays’ biggest industries and it’s been at the heart of every major disruptive societal shift since the dawn of mankind over 2.6 million years ago.
Over the millennia, our perception of ‘What is’ technology has changed. For example, very few of us will think of a Grinding Stone as a piece of technology, but to people living in the Palaeolithic Era over 25,000 years ago it was more cutting edge and disruptive than today’s iPhone. It allowed our ancestors to make bread which in turn helped decrease global mortality rates, reduce food spoilage, and ultimately helped humans colonize even more of the planet. And for those of you who care about brass tacks in America alone, the baking industry is worth a healthy $311 Billion a year, and that’s not bad considering the technology was likely invented by a farmer with little more than some time, a chisel, and a rock.
Over time, the number of use cases expanded, and today we use the modern day equivalents of the Grind Stone to sharpen knives, quarry rock, and polish materials as diverse as diamonds and wood. Meanwhile, we can say with a high degree of certainty that the original inventor of the technology didn’t envision these use cases and we can credit these Secondary Innovations to the people who used and were familiar with the technology who saw new ways to adapt it for their own particular needs. As a consequence, the simple Grind Stone has helped create industries that today contribute trillions of dollars to the global economy.
Today, organizations including Apple, GE, Google and Microsoft have gone one step further and incorporated these Secondary Innovators into their business models. Though we now call them ‘Developer Communities’, they’re still creating hundreds billions of dollars’ worth of additional value.
Today, technology has progressed but the same underlying innovation principles remain. Visionary companies and individuals are still showing us time and time again just how disruptive and influential technology can be, and no one can refute the transformative effect that technology has had on society, so it seems somewhat of an oxymoron that that the very people who live, breathe and interface with technology and technology vendors every day of their working lives – your ICT teams - are often the last people leaders turn to for inspiration about new products and services.
Time and time again we see leadership teams pour billions of dollars into specially carved out Innovation and R&D departments, while at the very same time decreasing their CIO budgets. If everyone agrees that technology is responsible for creating trillions of dollars worth of new value, then why do leadership teams still feel that it makes sense to cut and underutilize the staff in one of their most critical departments?
The answer, of course, is that in many cases the CIO Office has a perception problem and to be fair they’re not alone, because very few leadership teams try to harness the raw creative potential that they have sitting in their workforces.
There is a widely held belief that if you don’t already fit the stereotype of a Creative type, an Innovator or a Researcher then you can provide little or no value at all to the creative process. As a consequence, many leadership teams simply fail to engage their more traditional workforces in the innovation process until it’s too late. Tesco, a UK retailer with revenues approaching $100 Billion is the perfect example of this.
A titan of the global retail industry, Tesco’s earnings and market share have been in decline for years, and price wars with discounters across Europe and a variety of scandals look like they have pushed it into a tail spin. Finally, in July 2014 they cycled in a new CEO Dave Lewis, a ‘Game Changer’ from Unilever who vociferously announced that his first order of business was going to be to ask all 472,000 staff for suggestions on how to turn the business around. But shouldn’t these staff, who live and breathe the company every day, be the first rather than the last people to ask in a crisis?
The CIO Office
The CIO Office is unique. It and it alone stands at the intersection of business and technology, and consequently it’s in a prime position to not just help the business craft new, meaningful business propositions but implement them too. Even though many leaders recognize the strategic value of their ICT Department, many of them also have the perception that it’s full of stereotypical staff (or 'costs' as they often see it) whose sole purpose in life is to manage the systems, not help design the next great product or service. Consequently, many CEOs whose sole purpose is to ensure the prosperity of their organization along with their CFOs, all too often separate the Technology and R&D budgets, kerbing the former and investing in the latter. This behaviour reduces the impact of each department by needlessly doubling up on resource and stymieing collaboration that ultimately dulls the very competitive edge that the organization is trying to create.
Innovation and R&D departments always need ICT resources and expertise, and once the innovation process is run and new solutions have been designed they’ll rely on the CIO Office to implement and integrate them into the organizations systems and technology stack. Meanwhile, these same Innovation and R&D teams are also one or two steps removed from many of the analysts and technology vendors whose insights and new technologies such as Cloud, Cognitive Computing, Machine Learning, Big Data and Agile application development technologies could help them augment and improve their own creations.
Collaboration is key
When building out your innovation strategy, it isn’t a question of one department versus the other and either or. Organizations should be looking for new ways to leverage the people within their organisations for the benefit of all. With the right innovation training and guidance, the CIO’s Office and their staff are in prime position to deliver innovation back to the business and to get the best results leaders need to ensure that these new ‘Innovation Conscripts’ dovetail into the remainder of their organisations’ Innovation and R&D teams. By using this simple approach, the FTSE 100 and G250 organisations that I've worked with have seen at least a thirty percent increase in innovation output, a faster time to market, and have created better designed solutions that added significantly more business value.
The maxim ‘better apart’ is counter intuitive and today all of the world’s greatest innovations are the result of close collaborations between all of the stakeholders – executives, staff, customers, investors, suppliers and partners who have a vested interest in the output, implementation and promotion of the final innovation. The CIO Office sits at the intersection of the business and technology, and with the right strategy and support it can add significant value to the innovation process. So the next time you think about carving out two separate budgets, kerbing one and investing in the other, stop and think how you could innovate smarter and embrace the latent innovation potential that you already have sitting in your CIO Office.
If you’re a CIO or CTO reading this, then I encourage you, as one of our FTSE 100 CIO’s did recently, to push back against the budget cuts, form a team, and show the business how your staff can out innovate the innovators. Then once you have done that, ask for that budget increase.
About the Author: Recognised in 2013 and 2014 by the public as one of Europe’s leading Emerging Technology and Disruption Strategy advisers Matthew Griffin is an international speaker who works with global Accelerators, Analysts, Entrepreneurs, Investors, Governments and Fortune and FTSE multi nationals to help them reinvent themselves and adapt to new market conditions.