The four walls trapping innovation in your IT organization

Having worked across many IT teams and organizations, the question has often struck me of what leads groups of people working on technology initiatives to innovate. While everyone wants to talk about innovation, we as IT leaders often ignore the factors that block innovation because they are more difficult for us to effectively address. The need for IT organizations to innovate is something that has long been thought of as a ‘nice-to-have’ or a strategic goal, but digital transformation now makes it something essential to do effectively in the present. As we look across the enterprise, there are four primary walls that block IT innovation – layered between a floor that represents our organizational culture and norms as well as a ceiling that represents an organization’s structural controls.

• Process: One major structural constraint is an excessive reliance on process. It is a barrier to innovation and tends to increase exponentially relative to the size of an organization. Policy and process are obviously crucial to governing the modern enterprise particularly given the risk that many organizations face from the perspective of compliance, cybersecurity, and customer service. However, being blinded by traditional controls and methodologies can mean missing major opportunities in our markets and industries. In many cases, startups can disrupt dominant players simply as ‘process plays’ by bending the rules that have traditionally defined industries or organizations.
  • Instead? Increase Process Elasticity: Take another look at organizational processes, particularly those that constrain what could be unique and innovative behavior. An example here is an IT organization’s approach to project management – start to infuse agile practices.
• Incentives: A second structural barrier is incentives – they are a significant challenge (and opportunity) to creating an environment that fosters innovation. In many companies, incentives and performance standards reward a ‘middle of the road’ and ‘follow the rules’ culture instead of supporting people and ideas that look outside the traditional operational boundaries of any organization.
  • Instead? Rethink Incentives: Companies do not have to scrap their existing incentive programs but instead look for ways to reward top performers who contribute to new ways of thinking and doing business. Don’t be afraid to stretch traditional boundaries…if it makes sense for an IT leader to report to business leader while working on a project instead of directly to the IT organization, give her a chance to do it.
• Fear: A culture of fear is perhaps one of the strongest walls that cause team members to give up on new ways of doing business. The most interesting aspect of fear is that it is a two-way street. A culture of fear is often spawned by leaders who fear disruption to the status quo yet ultimately lead the organizations that are the most disrupted. The result is an unending downward spiral for innovative opportunities and thinking.
  • Instead? Encourage Disciplined Risk-Taking: Leaders have to get over the need to centralize and control everything. While it may feel more comfortable, the only way to compete in the new digital economy is to provide a platform for employees to comfortably take risks – in a way that startups and new entrants cannot through providing insight and investment. Give employees with a platform to prototype but within constraints that do not jeopardize the strategic or financial goals of IT, and, if something shows promise, take a chance on a new product or service.
• Focus Diffusion: While innovation might require shifts in direction based on industry and customer demands, it is not about chasing every trend, hot topic or organizational crisis. Too many IT organizations allow concentration and focus to diffuse to efforts that provide limited value beyond a short time frame.
  • Instead? Establish Directional Change Thresholds: IT leaders have to be disciplined and understand that successful innovation results from creating the space for it to happen and frivolous shifts in direction are not effective. Everyone recognizes that agile organizations have to have some ability to quickly change directions but it is important to recognize when that needs to actually happen. As opposed to directional changes on a managers’ whims, organizations need to help managers understand the thresholds and criteria for what determines an urgent need to change direction…and what does not.

Taking down walls that trap innovation is not an easy proposition; however, keep in mind that even just one wall coming down may allow innovation to flow more effectively in and out of your IT organization. This can lead to gradual cultural and structural shifts that help to reshape our IT organizations to drive business value well into the future. Remember too that ‘innovation’ is not just a buzzword, it is about competing in an ever-more-demanding marketplace and about IT being a core transformation agent in that process.