Strategy: Driving Business Change

When, a few years ago, a local politician told Spencer Hamons, CIO of SLV Regional Medical Center, about an upcoming settlement with the tobacco industry, Hamons’ first thought was how he could get his rural Colorado hospital a piece of the payout. A close reading of the ballot initiative that would allocate the funds revealed a provision that would reward health organizations for data they collected about smokers, such as the percentage of patients who were current or former smokers. Hamons knew most hospitals didn’t have that information. And so, at his insistence, SLV added a field to its patient intake database to collect it. When the ballot initiative became law, SLV got the payoff. “That was a $200,000 turnaround,” says Hamons.

Definition

Innovation Agents put the highest emphasis on strategic thinking and believe strongly in IT’s ability to drive new business initiatives. They are very likely to be members of the executive committee that reports to the CEO and they are most often found in smaller and midsize companies.

Hamons’ inspiration is typical of CIOs who are Innovation Agents, according to “The State of the CIO 2007” survey. Innovation CIOs always think about business first. Compared with other CIO archetypes, more innovators (87 percent) believe that IT should proactively imagine business possibilities. The innovator is also more focused on generating revenue than her peers. Her emphasis on using IT to improve customer service and support reflects this sensibility.

Innovation Agent CIOs focus on the big picture: Among survey respondents, they spend the most time on strategic decision making. “My job is to think about where my organization is going to be 10 years from now and how technology is going to factor into that vision,” says Fritz Fekete, director of information systems at the Ohio Education Association.

Strengths

Janet Sherlock, CIO of interior decorating fabric retailer Calico Corners, says strategic thinking is her most important skill, as do 70 percent of innovators. As an example, she offers this story about her approach to deploying an ERP system for the company.

Calico Corners traditionally kept inventory in both its 115 retail stores and its distribution centers. Sherlock’s team was designing the ERP system to support both. “But we never actually sell anything from the stores,” says Sherlock, because customers always place custom orders. Instead of building a system that supported an inefficient business practice, Sherlock suggested that the company stop stocking inventory at stores. Now the company is testing the new inventory model, which has potential to save the company millions.

Innovation Agents like Sherlock also know that having a great idea doesn’t count unless they can convince the rest of the company to let them implement it. Like most CIOs, innovators cite their ability to communicate as a critical skill. What sets them apart, however, is their expertise at closing a deal. Innovators are more than twice as likely as other CIOs to have a background in sales and marketing. “I spend a lot of time pitching things to my boss,” says Sherlock, who worked in sales and marketing for the majority of her time during nearly 10 years at Mobil Oil.

Once an innovator has an idea, he is determined to make good on it no matter what. “They reject the idea of failure,” says Rob Austin, a professor at Harvard Business School who is working on a study about the characteristics of innovators. In the course of his research, Austin asked leading questions in an attempt to get innovators to admit to a past failure. They wouldn’t. Instead of conceding defeat “they’ll just try something else,” he says. Geoff Endris, CTO of Capital Assurance, laughs at the description, which he says fits him perfectly, down to the slogan on his coffee cup: “Failure is not an option.”

Weaknesses

The same can-do, try anything qualities that make CIOs successful innovators can also undermine them if these qualities are not balanced by the steadying presence of a boss or a trusted lieutenant who keeps them grounded in reality.

While keeping the lights on is a responsibility for all CIOs, Innovation Agents hate details. Among survey respondents, innovators report spending less time on compliance, budgeting, meeting with vendors and other detail-intensive work than any of their peers.

“I don’t mind projects,” says Sherlock, “But the operations and the servers and that sort of thing, blah. That’s the part of IT that doesn’t do anything for me.” This lack of interest in IT operations can get Innovation Agent CIOs in trouble if they don’t have someone dedicated to the task. John Havener, CIO of Hacienda Builders, says that keeping his small department focused on strategic projects forces trade-offs because “we end up getting behind the eight ball when things break.”

Due to their determination and ego, Innovation Agents say, they often bite off more than they can chew. “I have unrealistic expectations of what I can really pull off,” admits Hamons. He relies on his wife, Coryee Hamons, who is SLV’s director of quality services, to keep him grounded. But not every innovator is lucky enough to work with someone who knows how to interpret his intentions. The business picks up on the tone that the CIO sets, creating the potential for a clash of expectations. Not surprisingly, 62 percent of Innovation Agent CIOs—the most of any of the archetypes—report that unrealistic expectations from the business is their biggest barrier to effectiveness.

Your Best Fit

The Innovation Agent works for a company that eschews the need for IT to justify every dollar it spends. “You can’t work for a company that thinks IT is a cost to be minimized at all times,” says Endris.

Instead, the innovator needs to work for a CEO who is willing to give him the freedom to pull on the threads he is interested in, even if he can’t explain exactly why he should. In exchange for that freedom, Innovation Agent CIOs are held accountable for results: They are more likely than their peers to be solely responsible for delivering the ROI on IT projects.

Gaining the freedom to innovate doesn’t necessarily require finding a new job. But it does take stable day-to-day operations and strong personal relationships between the CIO and her company’s other executives. Innovators are more likely than their peers to report to the CEO (55 percent) and to be a part of the executive team (77 percent).

When Fekete began his job at the Ohio Education Association, the IT group was in shambles. All management wanted was for him to turn it around. Once he did, he got support for more ambitious projects, such as using the Internet to change how the association communicates with its members. Similarly, Sherlock was hired to be a caretaker, not an innovator. But she took it upon herself to expand her role, writing white papers pitching how different technologies could help the business.

The companies where Innovation Agents work span every industry. However, according to our survey, 83 percent of innovators work for companies with less than $1 billion in revenue. A possible reason, says Austin, is that innovators thrive when they face resource constraints. Among survey respondents, innovators have the smallest budgets—a classic limitation.

As for the Innovation Agent himself, there is one other requirement: Passion. “I love my job,” says Chris France, CIO of the architectural firm Little. “I told my wife if I retired I would probably do this.”