by Michael Rosenbaum

Show innovation some love

Feb 09, 2017
IT LeadershipOutsourcingSoftware Development

Remaining nimble is important in uncertain economic times

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Credit: Thinkstock

2016 witnessed many unforeseen changes to the international economy. From Brexit to the U.S. presidential election, longstanding policies of free trade, international collaboration, open capital and labor markets, taxes, and tariffs were brought into question.

The outcome of these changes, or if they will be fully implemented, are still to be determined. But their specter has many enterprises spooked. This fear of the unknown often leads to retrenchment, as companies double down on what’s working.

This is the opposite of what companies should do. No change in macroeconomic policy will disrupt continued and increasing consumer expectations about technology. This factor should drive companies to resist focusing only on their core business and find new and better ways to become nimble. Here’s how enterprises can continue to show innovation some love in unsettled economic times.

Top-down or bottom-up?

One theory on launching innovation in an organization is that it is best managed or directed top-down by the leader creating a discrete innovation group. The rationale behind this approach, which originally grew out of ideas put forth by Clayton Christensen, is that the CEO can protect this team, establish its goals and the team can then act as a start-up inside a larger organization. The leader thus creates the space that would otherwise be consumed by the daily needs of the core, historic business.

In the context of the pressures of consumerization and technological disruption, however, this approach is based on a definition of innovation that in many cases is too narrow. By creating a team or group that is solely responsible for innovation, the necessary cultural shift struggles to permeate the entire organization. And, this approach ties innovation work directly to an individual or team, rather than to the organization. If the CEO or important team members leave, innovation as a priority can suffer.

Often, a more effective way to embed innovation and its cousin nimbleness into an organization’s culture, and to show some love to innovation as a concept, is to put developers in the same organization with business people. Having these development teams embedded in business units allows them to recommend how best to deploy technology throughout the organization. They know what technology can enable, and can be the catalysts for innovation work that demonstrates it.

Create a shared space

To create the environment for this organic innovation to take hold, you need physical space where technology and business can work side-by-side. Co-location in a shared environment will lead to better collaboration, understanding, trust and innovation between technology and business teams.

This is where a top-down directive can be very helpful in restructuring current real estate assets, or in choosing a partner with a local presence that can both share space and help the different business units navigate the sometimes-tricky process of working together.

For enterprises that have not attempted this before, there can be some growing pains as duties overlap or one group feels its domain is being infiltrated by another. This is again where an outside, independent partner can help. This neutral party can provide objective advice and find or point out opportunities for collaboration or innovation that the enterprise might overlook at first.

From innovation space to innovation culture

While it is a productive first step, putting technology and business units together and hoping for the best will not transform your enterprise into a culture of innovation. For that to occur, you must find and hire innovation-minded talent.

This requires a fundamental rethinking of identifying who is “good” at innovation. Enterprises that hire with a traditional box-checking method built on resumes are not likely to achieve the change in human capital needed for an innovation culture. This change happens when you identify, isolate, track and correlate performance metrics that correspond to innovation, nimbleness and speed. These are the best predictors of future outcomes and a way to ensure your technology leadership has the creative background to see the full possibility of what technology can accomplish for the core business.

Along with changes in hiring, to create an innovation culture, enterprises must change the ways they allocate funds. Innovation work is not driven by long-term budget planning. An agile approach to development work requires a level of budget flexibility that many companies do not currently have in place.

Benefits of showing innovation some love

It is easy to understand why some enterprises would want to remain conservative during uncertain economic times. But, if they can show innovation some love and transform their culture, they stand to benefit regardless of macroeconomic trends.

Innovation leads to new revenue streams. Industries or companies that are not “classically tech” suddenly have technology products they can use to increase customer loyalty, retention or value, or even license and sell business-to-business.

It also leads to the ability to keep up with consumer expectations. The demand for speed, ease on interaction, on-demand functionality and connectivity continue to grow. Innovation allows enterprises to adapt core business functions to meet these demands.

How nimble is your company in case of major economic disruptions, say to supply chains or movement of human capital? Innovation provides a work around. Innovative people see the possibilities for new ways of doing business, regardless of the economic climate. Find them, hire them, nurture them and reap the rewards of showing innovation some love.