CIO Insights: How to approach innovation

CIOs face a multitude of challenges in their daily roles. In the first installment of our new CIO Insights series, we talk to three leading Australian technologists about their approaches to encouraging innovation in their organisations and engaging other c-level executives in the process.

Scenario: The CIO is trying to encourage innovation and has an informal approach to people submitting their ideas to the IT department. However, the CEO or another business head wants to take a different approach and review each single idea – big and small – making the approval process time consuming. The CIO’s concern is that this might stifle creativity.

What would you do in this situation? CIO Australia talks to three CIOs who share their advice.

Ajay Bhatia, CIO at Carsales.com.au

We are surrounded by uncertain times and this is making many CEOs and execs very wary of risk so doing something small is going to be more palatable than doing something big. Conservative organisations are risk averse and starting small reduces risk. But it’s about building that small innovation into your technology process.

For example, developers could be encouraged to come up with innovative ideas through the project life cycle. Agile is very helpful here as it discourages you to define everything upfront and leaves scope for you to ‘innovate as you go’. When we define a project we don’t define all of the requirements of the project upfront; we leave a lot of room for discovery, for incidental and accidentals ideas.

These wins could then be celebrated within the organisation through peer recognition and sold tactfully to the other c-level execs, including the CEO. Once the CEO starts to see value in these small ideas, she or he should be more receptive to bigger ones. The bigger ones may still require a level of approval but that is not all a bad thing.

It’s also not a bad thing in some cases for you to make the CEO believe an idea is his or hers. Innovation for most people is about what they do, not what someone else does. If someone else is creating a really interesting idea or project, then that is not necessarily always going to be seen as innovation to another person unless they have been involved at some stage during the project lifecycle.

Organisations are either culturally innovative or they are not. I’ve seen organisations where they have tried to create an innovation department or a process around innovation and it almost inadvertently fails because the organisation and the c-level suite as a whole don’t accept innovation.

So they will always focus on the short-term priorities, “let’s do this to get short-term money”. If the CIO alone is trying to fight this battle with the CEO, there is less chance of being on the winning side so you need to be on board with all the executives when it comes to them channelling ideas.

A recent example of innovation at Carsales is we recently built our own search engine, RyvusIQ. Carsales used to be previously powered by a search engine called Endeca which is now owned by Oracle. It cost us hundreds of thousands of dollars, if not a seven-figure amount of money to implement.

One of the developers came to me and the CEO and said, “You are asking me to do all these innovative things, but I cannot do them with this search engine.” And from customer feedback, they were also asking for all these new search innovations. But we were really limited with what we could do with that search engine.

The developer, along with another team leader, offered to develop a new, better search engine so we commissioned six weeks of research for them to work only on the project and prove to us what they could do and build a prototype.

Already in six weeks, there were aspects of the prototype that were better than our search engine so that gave us the confidence to continue to commission that project. We estimated the project would take a year, but it took us two years.

The organisation that built the previous search engine that Carsales used was worth $1 billion. Therefore, at first we were scared about developing a new search engine as there are billion dollar organisations out there that build search engines and here are two developers coming to me and saying they can build one that’s better.

Carsales-owned Quicksales website is also powered by that search engine, our own proprietary search engine, and we now are starting to sell that to other organisations.

Innovation is no more something nice to have for organisations. Some organisations will spend 50 per cent of their time innovating, others 1 per cent of their time. The question is not whether you should innovate or not, it is how much time you allocate for innovation.

The best thing is to work on an acceptable level of risk taking within the organisation while educating the other executives on the value of innovation. This is why I define innovation as new thinking that creates value because all of the execs love value. At the end of the day, there is value, but there is also some risk that comes with it. It’s just balancing the two.

Alex Jones, CIO at Synergy

From a stakeholder management perspective, it’s important that the beneficiaries of any innovation (generally not the CIO) are actually involved in supporting the concept. So if you are going to run an innovation process that’s designed to benefit a certain part of the business then you really want to get that part of the business involved before you get started.

When it comes to deciding on the process you could say, “I know we haven’t done this before in this organisation but I have done some research and have sought opinions from experts and it seems that this particular process would be effective in bringing the benefits of innovation to you. What do you think?” Then you can have that conversation about who has what role in driving an innovation process.

Once having agreed on that, then you start soliciting ideas from the employees or customers or whoever you are going to get your ideas from. You have to get an agreement on what you are going to do in terms of the innovation process before you go out there asking people for ideas.

In regards to the CEO or the other business executive wanting to review and approve each single idea, if you ask yourself the question “why do people micro manage?” it’s because they don’t have confidence that the process as it stands is going to deliver the right result. Maybe they are concerned that it’s a waste of time and the team doesn’t have capacity to do all of this.

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Get those people’s buy in before you even start on what it is you are trying to do, why you are trying to do it and what you are hoping to achieve and also what’s involved because nothing is free. You don’t just suddenly get great ideas turning into projects without a number of people actually putting in a dedicated effort to making that happen.

You could say, “We are going to get all these ideas coming through and it’s going to take quite a bit of effort to filter all of them down to say 10 that could actually become a project. We are going to need people from your team to work with us in selecting ideas as you understand where the value is for your part of the business and we will be like the sponsor of all of this and deliver the end result of that pre-filtering.”

If you have an internal Facebook page where the CEO or other business head can like, comment and vote on ideas as they see fit – then that could be a way for them to be part of the review process without having to go through each single idea manually.

This is an example of how you could set up a tool to capture and pre-review ideas and any business can set that up for free. We have something similar we call an ‘ideas hub’ and it’s a link on our Intranet site.

Lastly, if you are in a situation as a CIO where you are faced with an ineffective process being forced onto you and you don’t have the influencing skills to turn it into something that is going to work, then you are in trouble.

That is evidence of a fundamental gap or issue in terms of trust and engagement, which is serious. You need to work on your influencing skills and develop a good working relationship with the people who are responsible for making the decisions whether to invest or not to invest in innovation and technology that is going to benefit the business.

Christopher Topp, director of IT at Luther College

A good way of implementing change deriving from effective entrepreneurial thinking is to categorise the ideas according to business risk, then invite the CEO or other business executives to be part of a review process dealing with each concept with an appropriate time to be allocated to it as part of a panel.

While in one sense you are diluting the business hierarchy, this is advantageous especially if you need to move away from traditional ‘accountant mentality’ thinking to a more ‘creative thinking’ approach.

Sometimes you can come up against linear thought process associated with more traditional forms of business disciplines such as accounting, and these don’t necessarily lend themselves to thinking outside the square.

An accountant’s way of learning and understanding how the world operates is different to someone who comes from a more creative, arts-based background. So breaking out from this mould within a review panel process means that you have the capacity for the attendees to properly understand the concepts put forward to a wider audience.

Another way could be instead of having a traditional ‘yes management approves – go ahead’ approach, switch it up with a pre-approval process based on a mini-review panel. In other words, all ideas are good until management says no. Whilst some might say it’s easier for people to say “no” I would assert it’s harder for people such as the CEO to say “yes”.

An ongoing dialogue is important when building trust with other business executives. I think when things fall down it’s because people are not kept in the loop and so getting a sense for where things are at and what is being worked on can help put minds at ease.

They don’t actually have to make every decision but sometimes they just need visibility rather than total control. Tapping into the ideas of people in an organisation on the ground level is fantastic for innovation, but it really does come down to communication and building trust with the other executives.

Are you facing a particular challenge and need some advice? Contact Rebecca Merrett at rebecca_merrett@idg.com.au.

For more articles in the CIO Insights series, be sure to check out: What not to do when hiring talent IT offshoring/outsourcing – how much is too much? Dealing with shadow IT Legacy systems – love them or leave them?