Many believe innovation rarely happens by accident. That the eureka moment enshrined in popular culture is mostly myth. Certainly there are times when momentous insights and ideas pop into our heads as bolts out of the blue. But insights alone aren’t innovations. When it comes to business and IT innovation, success is nearly always the result of patience, practice, process and people.
That means orchestras, not soloists. That’s according to the Innovation Imperative global research study, conducted by IDG and commissioned by CA Technologies, which found organizations that innovate consistently are those where IT has strong connections to the business; where business leaders and IT collaborate on innovation projects; where IT is a vocal, proactive champion of innovation; and where formal processes are in place to capitalize on innovation. The data reveals that innovative organizations place an emphasis on planning and process, highlighting the need to anticipate future customer needs (54%) and stress process and structure (47%).
Sounds great, makes sense, feels good, right? Now here’s another data point to consider. A full 26% of respondents said customers were the primary driver of innovation. Moreover, three of the top five innovation triggers dealt with changing customer needs, attracting new customers and retaining existing customers.
Certainly focusing on the customer is important for any business, but there is danger in trying to be all things to all customers—and this includes internal customers, the business leaders IT teams strive to collaborate with on innovation projects. After all, as we discuss in our newly released book “The Innovative CIO: How IT Leaders Can Drive Business Transformation,” without good execution, innovative ideas deliver no value whatsoever to the business.
There are always many more things that might be done – perhaps even should be done – than any IT team will have the resources to do on their own. No organization can do all things well or be all things to all people. In addition, no IT team has limitless budget, bandwidth or bodies to satisfy the needs or whims of every customer. There are certain business realities with which every executive and IT leadership team has to wrangle. Despite this, we need to ensure that the important innovative ideas are identified, explored and capitalized on. They can’t fall through the cracks. The good news? It’s not always about saying “no”. Sometimes it’s about saying “not us”; though that is not always as simple as it appears.
That’s why we need an acid test for innovation. Here’s the one I used, successfully, when I was running CA Technologies cloud. When anyone came to me with an idea for a new service we might deliver to our internal or external customers, or when I had an idea I wanted to suggest to our business leadership, my acid test for innovation kicked in. It requires answers to three simple questions: Are We? Could We? Should We?
1. ARE WE?
Are we currently the best source for this product or service? Best by whatever terms are most important to the customer: quality, speed, agility, service, cost or many other factors. And we have to be honest with ourselves about our capabilities.
2. COULD WE?
Could we develop the skills necessary to become the best? If it wasn’t obvious that we were currently the best, then the next question I would ask is “Could we get there?” The answer requires some hard-nosed investigation about what it would cost and how long would it take. It’s important to note that “Could we?” is not an aspiration, but rather, a rational decision with serious business measurements and analysis behind it.
3. SHOULD WE?
Even if we could become the best, should we? Or would the time, talent and skills be better directed at something that would deliver a higher-value return to the company? This last question is the crucial one. In the organizations and IT teams I’ve had the privilege to innovate with, the answer to “Could we?” was almost always “Yes.” Evaluating both the investment and the opportunity costs became essential. It made no sense to invest in becoming a me-too provider if it prevented us from doing something else that delivered far greater value to the business.
This acid test is a way to get to yes, a way to validate yes and a way to help IT organizations stop being perceived as the Department of No. However, this test will naturally result in a fair share of “no” responses to customers. But following these principles will consistently deliver higher customer value and improved customer relationships, while ensuring a business-IT collaboration that’s vital for continuous innovation. And in this case “no” does not mean that the customer cannot have the service, it simply means the service will be acquired elsewhere – provided it delivers value to the business. Those cases provide another opportunity for the IT team to deliver value to their business colleagues, by helping them select and manage those external services.
Here’s an example. As CA Technologies cloud services matured, its customers were asking for more powerful archival features. Our team’s investigation confirmed that customers needed this feature. Our team also included people who built CA’s storage management tools. The answer to “Are we?” was no, we weren’t then best at doing it. The answer to “Could we?” was yes, we had the right people to build it.
But the answer to “Should we?” revealed we had a technology partner who was building a business around archiving. They had entire teams and data centers dedicated to archival solutions and were fast becoming a global leader. Partnering would be less costly and would get us to a solution faster.
We delivered a lower cost solution to our customers much more rapidly than we could have done ourselves. The acid test of “Are we? Could we? Should we?” ensured an honest assessment of our situation, capabilities and priorities. It delivered an innovative solution to our customers quickly. And it let us concentrate on the things that make our cloud a world leader.
Innovation can be intentional. But without an acid test for innovation, IT teams can dedicate their scarce resources to the wrong activities. Make sure your team has an innovation acid test and that all new ideas can make the grade.