The 2007 Boston Consulting Group’s
innovation survey of 2,468 senior executives worldwide
found that although companies are spending more on
innovation, many are dissatisfied with the return on those
investments. And although innovation may seem like a
strictly business concern, IT has a crucial role to play. So
says James P. Andrew, who leads BCG’s innovation
practice. How can IT become a true innovation partner?
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True innovation partners, what Andrew calls IT superstars,
have secrets that the rest of IT should know. He shared them
with CIO.com’s Associate Online Editor Diann Daniel.
CIO: The BCG survey found that many executives were
frustrated with their innovation spend. What is the main cause
of that frustration?
Andrew: The biggest problem in innovation
today has to do with money. In other words, how do I generate
return on my innovation spending? In the survey, only 46
percent said they were satisfied with the return. One cause can
be traced to this: There’s a lot of fuzzy thinking about
Problems occur when people confuse invention with
innovation. Invention is new and clever; innovation is a
process that takes knowledge and uses it to get a payback.
Invention without a financial return is just an expense. Ideas
are really the sexy part of innovation and there’s rarely
a shortage of them. If you look at the biggest problems around
innovation, rarely does a lack of ideas come up as one of the
top obstacles; instead, it’s things like a risk-averse
culture, overly lengthy development times and lack of
coordination within the company. Not enough ideas, on the other
hand, is an obstacle for only 17 percent. At the end of the day
all that creativity and all those ideas have to show on the
bottom line. That’s why we called our book Payback [2007, Harvard Business School
Press]. The goal of innovation is to make or save money, and
IT should never lose sight of that central fact.
CIO: You said innovation is a process. Can you
describe in the simplest terms what that process looks
Andrew: Innovation is a three-step process:
1. Generate an idea. 2. Commercialize it. 3. Realize the
CIO: Why is IT important to innovation?
Andrew: Information is the jet fuel of
innovation, and IT is about providing information and making
sure it’s in the hands of the people who need it. It is
extremely difficult to do innovation well with bad information
or no information, so IT is critically important.
CIO: How well is IT enabling
Andrew: It depends on the company. Some do
it well and IT is a great innovation enabler. In those
companies, IT is great at handling and providing information.
In companies where IT is not an innovation enabler, IT at best
doesn’t contribute and at worst, actually stands in the
way of innovation.
CIO: What must IT do to become a part of innovation
and strategy conversations?
Andrew: First, be brilliant at the basics.
It’s quite hard to be a credible business partner if you
are not doing what you’re core job is. And you need to
not just do a brilliant job, but you must be perceived as doing
a brilliant job. A lot of IT professionals run into some
challenges because that perception is not there.
Second, have a business view of IT. You need to be able to
articulate to someone with a P&L how IT can help the
business make more money. Everyone who runs a P&L is
looking for any way to save or make money. When I talk to CIOs
who say they can’t get the time of business leaders, it
is because the rest of the business doesn’t think IT is
doing the basics well or IT doesn’t understand the
business from the perspective of the business leaders. You need
to be able to translate technology into money-making
opportunities. What I encourage IT execs to do is whenever you
talk with a head of business, you should have ready two or
three specific money-saving ideas or new ways to make money.
And that puts a burden on IT to be able to understand the
business side and translate technical knowledge into
money-making business activities.
If IT is not seen as executing well or brilliantly on what
they are supposed to be doing, the business is not going to ask
them to do more. Moreover, many IT professionals don’t
make the link that their job is to help someone make more
money. If that is not the perspective you bring, then you
won’t be a part of the business organization and its
conversations. In companies where CIOs are seen as business
enablers, they have no problem being invited to the right
Read a copy of Boston Consulting Group’s reports,
“Innovation 2007” by clicking here, and “Measuring Innovation
2007,” by clicking here. Both reports are based on
the consulting group’s surveys of senior
CIO: How can IT become a true innovation
Andrew: Beyond being brilliant at the
basics and becoming a true business partner, IT must do three
1. Know what’s on the agenda of business leaders and
what goals for the business they have.
2. Know what the current information gaps and deficits are.
A lot of times IT already has ways to meet gaps; there’s
often information needs that aren’t being met but can be
easily met with the technology already in place or with simple
3. Become proactive about offering the capabilities IT has
that the business may not even be aware of. As the CIO or IT
executive you are tech-savvy, on the leading edge of technology
and know what capabilities already exist. If you understand
business goals you can use that knowledge and say we have this
capability and it might be used here or a certain capability
would be possible, but you have to know the business well
enough to do that. Again, you should always be carrying around
three ideas you can pitch to the right business leaders and
help them realize you are thinking about business and seeing it
from their perspective.
CIO: Why is innovation so important
Andrew: There are three ways you can grow:
You can grow because the market grows through mergers and
acquisitions, or you can grow organically, which is where real
growth lies. And really, innovation is the only way to do