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Role of IT in the Company's Innovation Process - Part- I

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Role of IT in the Company’s Innovation Process

Q&A with Jatin DeSai, CEO The DeSai Group (March 21, 2011)

1)       The term "innovation" shows up a lot, and is often used in different ways. So first off, what is your definition of innovation ( What is a specific example you've seen in your work?

  1. Innovation means lot of things to lot of people. It usually gets confused between invention, creativity, and design. Creativity is an act of being creative; to think and act differently. Most organizations are designed exactly opposite – to conform, to follow a predictable process, to assure certainty. This is one reason why creativity does not happen at the scale of the organization. There are no rewards for thinking with your left and right brain; that is the whole brain as Daniel Pink wrote in his famous book of the same name.  Ideas, especially fresh ideas, come from act of being creative. When ideas turn into something unique, it can be called Invention for the person or the team who created it. But, it is not called Innovation until it creates value for the market and the (internal or external or both) customer. Anyone can invent, but when market accepts it, it is called Innovation.
  2. Another way I like to say it is “Creativity is when you spend money to find ideas, and Innovation is when you use ideas to make money.”
  3. Innovation by our highest definition is all about growing the top line - period. Anyone can grow the bottom line, as most senior executives have done to our business climate over the last three decades, by cutting expenses while driving efficiency and optimization techniques. This is not sufficient for long-term success.  In fact, I think it is the main source of our failed economy. There is no way a company can grow, year after year, develop a strong brand, retain customer loyalty, and achieve its annual goals without a climate and culture of innovation.

2)       During these tough economic times, corporations are struggling to make it, struggling just to get by doing their core work. Where does innovation fit into such an environment? In other words, does innovation matter in a recession? And if so, why?

  1. Yes it is true, that many organizations are trying to survive during this tough time in our world. But it is the result of the past choices that got us into this situation in the first place. It is very hard to ask the same CEO/MD, who did not value innovation, to now all of a sudden make investments for innovation efforts or programs especially when they don’t even know what innovation is. In our experience, most executives and even the teams at the top lacks a clear definition of innovation. They first must achieve clarity and find common language for innovation. It is not just R&D, or product development, or throwing fuzzy toys in a meeting, or drawing with crayons.
  2. I think that most organizations are now past the recession climate. They are out of ER and into the recovery room; at least here in US. They are now in a phase of strategic and conservative growth. This means they want to invest, but do not want to radically change anything; I agree, they should not! But they must proceed with a different mindset; they must acknowledge moving forward in a new and unique way and focusing on long-term not just short-term success. This creates a dilemma since most executive compensations are still tied to short-term success.
  3. For a company who does not have an innovation mandate they must understand that innovation is about long-term and sustainable growth. Therefore, it has very little value during the recession if the executive team is focused on short-term achievements. Once they are out of the ER department, it is prudent to commit to a new way for recovery, rehab, and to stay healthy. If they use the old mindset that got them in to the ER in the first place, chances are they will be back in to the hospital soon. The post-recession period is the best time to develop a strong sponsorship and alignment for innovation as a strategic tool for growth. It means committing to doing things differently, it means challenging the status-quo, it means experimenting more, it means new learning, new technologies, and new knowledge; all of which brings new clarity to help make informed choices for investments instead of  external factors dictating and forcing downward demise.
  4. For any company. There are two primary external drivers that create most amount of uncertainty for the future – technological and marketplace regularities. IT departments can play a huge role to help address both factors. Who better to help think though about what will happen to technology change, impact of technology, and adoption of products and services that use technologies then a a good IT department?
  5. So, the best outcome during this period is to at least agree to adopt innovative mindset at the top, commit to innovation as a new behavior and finally have the CEO and CIO own the innovation charter for the organization. There are at least four different ways to implement innovation in an organization, choose one (details can be found in our Innovation Roadmap whitepaper on our site at and drive it.

3)       There are companies for which IT is a prominent public facing capability (say Google, Microsoft, IBM, HP) and those where IT is a business or supporting service in the delivery of public facing products. Considering the latter types of companies, where is IT in a typical company's innovation mix? Where should it be? In other words, from what you've seen how much do companies tap into their IT departments for help in driving innovation? And what should they be doing?

  1. In most companies, IT is a support function and not a strategic function. This has always intrigued me. When most amount of changes in the world are due to automation and globalization, I cannot fully understand why most senior teams do not position technology as a strategic weapon.
  2. One of the reasons why this occurs is because organization and the senior team have not created distinctions between technology and information systems (IT departments). Most successful innovators have! Without such clarity it is hard to introduce innovation in an organization correctly, especially when most think of innovation only in terms of hard products.
  3. To be successful, IT departments must master the delivery and quality demands of information systems first. This means, they must demonstrate that they are making money (coming below the budget and helping the organization achieve a customer centric focus) for the organization and not just a cost center for the organization. Then, they have the right to own the innovation agenda for the organization.
  4. “Sales” is the practice and “Marketing” is the decision science to help business create value. Same is true for Accounting and Finance areas. I believe Technology-driven IT departments can be as valuable as Marketing and Finance departments are to the organization, once they have demonstrated the value and discipline required to be the best practice area first. Any good ‘practice’, such as a consulting company, law firm, or an accounting firm prides its self on, is a set of defined capabilities. It usually has components of professionalism, high-quality, certifications, deep subject matter expertise, continuous learning, knowledge-sharing, and collaboration as some basic methods of their success. IT departments should use innovation internally within their own organization to become the best practice area for the company, and help ‘make money’ for their internal customers first. Only then, they have the ‘right to be at the table’ and help drive the overall innovation and technology agenda for the entire organization. When IT departments can help find new insights about customers, markets, macro trends, competitors, and technology enabled new business models, they can be a strategic practice such as the Marketing and Finance departments.
  5. Most IT departments do not think it is their job to drive sales, just like most manufacturing plants don’t think it is their job to make money. I disagree! Until the mindset shifts to the only goal – to ‘make money’ - the game is difficult to win; especially for large multi-nationals.
  6. Best example of great IT departments we have seen, across sectors and continents we work in, are those clients who have strong commitment to making money for their internal customers and also to help introduce technologies in their customer’s products and services using innovation methodologies and tools. These departments also have a higher ratio of looking ‘outside’ then ‘inside’; that is they are more outside-in then inside-out.

4)       How realistic is it that IT can help drive innovation when those departments are probably understaffed more than most, not to mention all the cost cutting there is. Can you contribute to innovation when you can barely even get your regular work done? And if so, how (i.e., how can you overcome those obstacles?

  1. I don’t think IT organizations should wait for the world to change or improve. Innovation happens because fresh ideas happen. Ideas come from people! If you have people, then you can start to innovate now. Focus on ‘climate of innovation’ (video) not the ‘culture of innovation’. Manger can create ‘climates of innovation’ in his/her department much faster than a big innovation program from the corporate office.
  2. We have found there are more ideas in every organization than what to do with. Problem is they are sitting inside your staff’s head and left at the door. When brought out, they are not visible, organized, and prioritized. In other words, innovative ideas are under the ‘corporate nose’.
  3. Start by creatively asking different question to every problem. First practical step is to demand new questions, than you might get new ideas. Promote ‘The 4 Whys’ for every project discussion. That is, ask why should something be done; why now; why that way; and why not this path Vs this path? This will start to push people to get out of the ‘regular box’ and rethink possible solutions. If someone is satisfied with an answer the first time, it is probably not an innovative answer. Learn and teach to dig deeper, just to see what possible new solution(s) are to an old problem.
  4. Most obstacles for innovation are about un-learning not just new learning for each individual. This un-learning work is the work for each person. Un-learning is about removing internal-gravity and status-quo. It is our internal orthodoxies that must be uprooted. This work can easily happen during everyday activity without cost. It just needs to be promoted by the manger and embraced by each individual for the sake of innovation and growth. I believe that human beings are at their best when they are creating something new in their projects, work, careers, and life. Innovation is all about creating something new and novel.
  5. By allowing such climate at a team level, over time, many micro-climates of innovation will become visible, leading to culture of innovation.

5)       What specific steps should an IT manager or CIO, who wants to help drive innovation, take?

  1. See above about climate.
  2. Develop innovation policy that specifically defines what is innovation (video)? Why is it important? and What is being expected of each individual at all levels as behaviors of innovation?
  3. Integrate those behaviors in to HR performance management process.
  4. One method is for CIO to set up an innovation council just for IT. Set up a budget line with a small fund - say 1.0% for anyone to find ideas that needs experimentation resources. This will send a strong message to everyone about commitment to innovation and also to the future.
  5. Provide basic innovation education to as many people as possible, and provide extended training to help build intrapreneurs (50 people from a size of 5,000).
  6. CIO and the council should role model the innovation behaviors.
  7. Develop 90-day experiment plans for ideas (video) that come from teams across the IT organization. Some of these ideas will surely drive powerful outcomes for your customers.

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