A 4-Step Innovation Framework for CIOs

How to transform from a CIO to a CIO. Now that I have your attention. This is not a typo – I did mean from CIO to CIO. CIOs are good with transforming the business but not so well at transforming themselves. CIOs need to transform from Chief Information Officer to Chief Influence Officer and eventually to Chief Innovation Officer.

Technology is not only enabling new business models but disrupting the old ones at an unprecedented pace. You innovate or fall by the way side. Who would have thought of Tesla of having more than half of market cap that of GM? In my opinion Tesla is a technology company that happens to make cars.  Same goes for Uber, Airbnb, Netflix and many others that don’t even have a physical product and either invented a new category or disrupted a legacy service; driven with technology.

GE CEO Jeff Immelt made a very good point during his keynote addresses at one of the Industrial IoT Mind and Machines conference when he shared his vision on creating a digital twin for every major physical asset such as a jet engine, windmill or a critical piece of equipment on the plant floor. The digital twins are created by modeling the physical world with software and sensors and mimic the real world with simulations, actual data and deep learning.

Digital twins not only create opportunity for new efficiencies such as maximizing asset up-time but also create new business models. A manufacturer now has a shot at earning the recurring service market revenue by pro-actively managing the asset in the field. An auto manufacturer can completely change the business model and sell mobility experience instead of one time auto sale. It also gives manufacturers an opportunity to have more interactions with the end consumers and share product updates and keep building a healthy new product (NPI) pipeline and backlog based on true field performance and customer preferences. In the new digital economy, data will be more valuable than the product itself.

So how does a CIO get the seat at the table? How do you become a “What” person from a “How” person? Most of the IT leaders are good at figuring out the “How” to deliver on an innovation vision that is conveyed to them, the real trick is to earn enough credibility to collaboratively define “What” new products/services the enterprise should look for, what are the emerging trends to align with that have a realistic chance to be in the path of success.

At the core, innovation is converting ideas and wisdom into creation or enhancement of a product/service beyond the continuous improvement cycle and finding new channels, alliances, geographies and customers to grow the business. Everything else is a footnote.

The first tenet to drive innovation is to speak the business language. From my personal experience this is one skill I treasure most. It really opens the door when you roll up your sleeves and ready to jump in on business critical initiatives. It earns the respect of the business leadership team, and most importantly helps in boosting the morale of your IT team. The knowledge & experience gives you the confidence of being hands on and wisdom tells you on which selected critical initiatives to focus on at any given point in time.

The next key is to create a roadmap to clear the perpetual backlog of the operational IT demand due to under investment and aged infrastructure. This is one barrier that keeps IT leadership away from Innovation discussions. It is difficult to have a credible conversation about innovation with your CMO if the IT teams take days to provision new servers and are bogged down on aged storage and networking infrastructure. Hyper Converged Infrastructure should be on every CIO’s radar and they should have an execution plan to implement enterprise and/or hybrid clouds. CIOs should think “cloud-first” and take the conversation from cost efficiencies to “cloud as a business enabler” through agility. These systems are software defined and converge compute, virtualization and network with inbuilt security & resilience to enable IT to focus discussion on application and services rather than servers, storage and networks. Some of the next generation infrastructure has built in machine learning algorithms that constantly monitor and redeploy based on the workload and SLA demands.

Become a Lego enterprise – The Lego mentality creates true agility in the enterprise. Breakdown monolith applications into smaller API/Web Services driven building blocks. This empowers the IT organization to become aggregators rather than builders – open the controlled SDK to the developer community based on your industry needs. These snippets are well tested, have defined QoS and can be strung together like a symphony. Transform the enterprise by thinking security, mobility and performance from inception rather than a bolt-on idea. Like Legos, drive simplicity for example by standardizing on HTML5 for mobile application development unless there is a distinct competitive advantage on building a feature set by using native APIs.

Productize your information assets by connecting the dots, enhancing and rebranding. A simple key to IT led innovation is how we can help sales and marketing teams in attracting new customers or becoming stickier to existing customers when all other things like pricing, quality are equal in a commoditized industry. You don’t have to be a software company to create a product – your existing assets can be enhanced in such a way that they provide a new capability such as traceability information in real time from a smart factory, help customer analyze manufacturing defects in real time, provide added analytics in narrowing down problem with regards to machines, materials or operators. Such innovative capabilities delivered via secure mobile applications can be game changers and enhance IT standing with business and customers.

Be open to bring innovation from outside in and have proper structure & knowledge transfer mechanisms within your team. I am a big proponent of AI and machine learning. As a CIO it is like being a kid in a candy store – there are so many practical applications that are emerging now. Some of the modern GPU enabled parallel computing platforms can perform deep learning by analyzing images and create programs from data with little human intervention. Imagine the applications in connected vehicles space where a system learns automatically about traffic signs under all weather conditions; or which pedestrian is actually in the path of collision and appropriately raise an alert on the ADAS. For a smart factory it could be auto detection of a defect by analyzing surface cracks or x-ray images.

IT has a tremendous opportunity to shape the future of the enterprise and the good news is that innovation is not Rocket Science unless you work for NASA !