What Is “Practical Innovation”?

The need to innovate is inescapable. It’s nearly conventional wisdom these days (judging from the number of books on the subject) that corporate survival depends on creative ideas. Not just having them, but making them happen.

This is hard, of course. A lot of great ideas go nowhere. I was talking recently with a CIO for a brand-name financial services company. He was lamenting how easily employees’ creative notions can be stifled. “Management teams aren’t out there committed to stifling innovation,” he observes (you’d never do that, would you?). “However,” he goes on, “they send these subtle signals that make people feel like banging their heads against the wall.” An employee comes up with an idea for a better business process, or a new, IT-enabled product, and is told by his boss, “Hey, great thought, let’s put that on our list,” or, “Yeah, we tried that already.” Not exactly inspiring.

And yet, IT departments are the incubators for a lot of the innovation that’s happening in companies these days. About year ago, we published a survey we did of IT executives on their role as innovators. Nearly two-thirds said innovation was a significant or dominant aspect of their roles. More than half said the IT department, alone or in partnership with business units, led the innovation initatives within their companies. (You can still read the complete survey online.)

Which means CIOs not only have to be good at recognizing and promoting innovative ideas, they have to be able to turn them into reality.

Let’s take the first part, first. What constitutes an IT-enabled innovation? Tell me what you think about this as a working definition (consultant Geoffrey Moore’s new book, Dealing with Darwin, How Great Companies Innovate at Every Phase of Their Evolution, got me thinking along these lines):

An IT-enabled innovation is a new product, service or business process, created with or supported by technology, that enables a company to differentiate itself and create competitive advantage.

In other words, not every bright idea constitutes an innovation. Just the ones that provide a demonstrable competitive benefit.

Furthermore, how do you communicate to your staff what you (and your company) are looking for from innovation? Are they shooting at a target (create new products, find ways to cut costs, etc.), or randomly, hoping they hit on something the boss wants?