Innovation and Strategy

    I’ve been reviewing the numbers from our latest State of the CIO survey that have to do with IT innovation. This year we defined who is an innovative CIO based on how respondents answered questions about their involvement in innovation at their companies.  Nearly all CIOs say innovation is an aspect of their jobs. However, there’s a group that not only counts innovation as a major part of their role, but also reports business innovation to be the most important contribution IT makes to their companies.

    We looked at how the overall answers of these CIOs stacked up against their peers. The most revealing statistic in the whole survey is the importance innovative CIOs place on strategy. No less than 70 percent of the innovators said strategic thinking and planning is the personal skill most pivotal to their success – significantly more than the respondents as a whole. They also spend more time on strategic planning and decision making than other CIOs.

    It’s no surprise then, that finding the time for strategy work is far less of a hurdle for innovative CIOs. Most respondents cited lack of time for strategic thinking and planning as their top hurdle—tied with an overwhelming backlog of requests & projects. And yet, the innovators feel they are even more burdened than their peers by demands from the business.

    It can’t be that the innovators are better than other CIOs at managing their time. I think the difference comes down to the emphasis companies—and the CIOs themselves–place on IT as a strategic contributor to the business. The survey results bear this out: Innovative CIOs are more likely to report to the CEO, more likely to be members of their company’s executive team and significantly more likely to believe that IT should proactively envision business possibilities.

    If we’re going to define innovation (and I do) as the creation of a product or service or process that creates new value, to be an innovator you have to be deeply connected with the value proposition of your business. And I would argue that it’s impossible to be truly connected unless you are in the room when that value proposition is being developed. Another finding from our survey that I think is related is that a significant percentage of the innovative CIOs have held jobs in marketing. The point here isn’t that they know how to promote IT; rather, they bring to their jobs hands-on experience in defining their company’s value to customers.

    I also think that it’s very difficult to be an innovator if you work at a company where IT is viewed merely as a cost of doing business. Companies are going to invest the most in whatever drives growth. You can’t innovate with IT unless you have some freedom to spend money on new projects.  Granted, these projects have to have strategic value. But if it’s all you can do to keep the lights on, you’re not going to have much left for R&D.

    This doesn’t mean, by the way, that you have to have a huge IT budget or work for a big corporation. The vast majority of the innovators in our survey work at companies with less than $1 billion in revenue, and their IT budgets are not larger than the average as a percent of revenue. According to Rob Austin, a professor at Harvard Business School who studies innovation, the way big companies are structured, and the importance large organizations place on predictable outcomes, may work against innovation. I’ll cover that topic more in a subsequent post. Now, however, I’d like to know what you think about these numbers.