Innovation goes back to top of IT's agenda

IT departments need to constantly innovate

When CIO H. James Dallas attended his first NASCAR race about 10 years ago, he learned some fast lessons -- not about driving stock cars around an oval at high speeds, but about fostering innovation within an IT department.

At that race Dallas listened to radio communications between the drivers and their pit crews as they plotted race strategies. What he found, Dallas said at Computerworld's Premier 100 IT Leaders Conference in Palm Desert, California, this week, was that NASCAR teams "are constantly striving to be innovative. They're always looking for an edge."

IT departments need to adopt the same kind of mentality, said Dallas, who is now CIO at Medtronic Inc., a maker of medical devices in Minneapolis. And it has to start from the top: "CIOs have to get back to leading," he said, noting that top IT executives need to be able to find creative and passionate people within their organizations "and give them air cover so they can go out and be innovative."

Neither part of that equation is easy, according to Dallas. IT managers have to judge the person who proposes an idea in addition to the idea itself, he said. And then they have to find the money required to fund projects.

"We're out there competing for resources in our organizations," Dallas said. "And if we don't get what we need, then it's not 'Shame on management,' it's 'Shame on us.'"

In addition, companies that want to have innovative IT departments have to be prepared to take risks with technology and accept some failures, said Bruce Goodman, chief service and information officer at health insurer, Humana. "A culture supportive of trial and error is necessary, because a lot of things are not going to work," Goodman said.

Humana has set up one group within IT that is focused on strategic innovation inside the company and another that is exploring ways to take advantage of vendor innovations. It has also established a project management office to ensure that ideas generated by the two groups are acted on promptly. And the insurer has created a formal process for trying out new ideas "very, very quickly" in small pilot projects, Goodman said.

He recommended that IT executives set part of their budgets aside for so-called greenfield projects. And instead of measuring the viability of such projects using traditional metrics, Goodman noted, companies should judge them using other yardsticks, such as how they affect customers.

Open to suggestions

Another key to fostering internal innovation is a willingness to accommodate ideas from outside the IT organization, said Steve Ellis, executive vice president of the wholesale services group at Wells Fargo & Co. in San Francisco.

For instance, about 75 percent of the enhancements made to Wells Fargo's Commercial Electronic Office (CEO) business banking portal since it was launched seven years ago have been customer-driven, Ellis said. Wells Fargo doesn't build anything on the CEO site, he added, without first getting feedback from customers. "The voice of the customer is different from the voice of the company," Ellis said.

To be effective at leading change internally, IT units first need to establish credibility with business users, said Tom Lindblom, chief technology officer at CKE Restaurants. "Users have to feel like they're not wasting their time if they're coming to you with business issues," he said.

Filippo Passerini, global services officer and CIO at The Procter & Gamble, said the Cincinnatti-based consumer goods maker folded its IT unit into a shared-services organization several years ago as part of an effort to "try to be distinctive, or unique, in what we can create" for end users.

"Instead of just running faster and faster, we decided we should change how we run," Passerini said. P&G now sets IT project deliverables in increments of 30, 60 or 90 days and gives tech workers "commercialization" training, he explained. The company even changed the name of its IT operation to Information & Decision Solutions, because the "IT" label "wasn't descriptive any longer of what we wanted it to be," he said.

P&G's CEO keeps tabs on IT cost issues, Passerini noted, "but he's equally interested in discovering what is possible through the use of technology."

In the end, using IT simply to cut costs -- without focusing on innovation -- isn't enough to achieve true business success, Dallas said.

"If it's all about cost, you won't get to heaven," he said. "You won't go to hell, but this is about getting to heaven."