I am presenting at a session on Innovation at MR's Enterprise conference at Pebble Beach in October. I will be be moderating two CIO guests - John Dean of Steelcase and Dave Watson of Kaiser Permanente who will be presenting on the CIO view of Tech innovation.
CIOs, like most executives, are under intense pressure to innovate as global competition intensifies. But as I talk to John, Dave and other CIOs it is becoming clear that their views on innovation are very different from those of tech vendors and VCs. They do not want to be "spoon fed" innovation - they want building blocks they can adapt to their own vision of innovation. They bristle at the premium and large spend expectations around vendor innovation.
I have pieced together 5 elements - what I am calling the MAGIC framework - of what CIOs like John and Dave are using to define tech innovation and deliver it within their enterprises
Mashups - in the CIO world, there is a clear recognition there is no silver bullet. Mashup to them is about exploring every nook and cranny of the Doblin innovation framework - business model changes, channel optimization, product improvement and more. Also, most CIOs are looking at wide array of promising technologies from mobility to sensors to grids to web services. They want basic building blocks in each area and then have their teams do the mashup.
Vendor tip: Curb your enthusiasm. You may think your technology solves world hunger (like many Web 2.0 companies do right now), but few vendors can dream of or service the wide ranges of innovations CIOs are looking at. Present your capabilities rationally and knowing it individually is a small part of the CIO's innovation portfolio.
Alpha technology - a quiet revolution is taking place in CIO budgets. After years of vendor consolidation, the top 10 vendor share of their wallets is now shrinking. CIOs realize they have to take more risk to deliver innovation and are willing to give younger vendors and technologies much more of a chance. Also, many CIOs are having to scratch out innovation budgets from "utility" spend with incumbent, large vendors. The confrontional re-negotiations are not encouraging CIOs to listem to innovation pitches from such vendors. Besides, having outsourced R&D to vendors, many CIOs are disappointed only 5 to 10% of that spend actually has gone over the last few years to vendor R&D and innovation.
Vendor tip: The number of patents you have is not that important. Innovations in release 8 of a product are just as unimpressive. Early, but usable, technology in the hands of the CIO team is what counts.
Global inspiration - While globalization is affecting every business executive, in the last couple of years I have seen CIOs travel more and become more fascinated with global sourcing. Mobile applications from Korea. Open Source from Scandinavia. BPO ideas from India. Manufacturing innovation from China. CIOs are becoming global faster than many of their executive peers. And global in another sense - willing to look outside their own verticals. They do want learn about web services at banks, telematics at distribution companies.
Vendor tip: Every buyer has historically told vendors to show them relevant, industry specific citations and applications. They will continue to, but you will be surprised how open they are to new ideas from wherever.
Intensity- CIOs assign small "tiger teams" to innovation projects. Short time frames. Stingy budgets. Constrained based innovation. The old dream of huge Sabre like "competitive advantage" projects is gone. It is about tactical, but significant, payback projects.
Vendor tip: Think big, execute small and intense. Talk
quietly and carry a big stick. Necessity is the mother of invention.
Cliches I know- but each points to constraint based thinking and focus
on high payback areas. CIOs also want to hear how you have innovated
your own sector's business model. It could be through different
licensing, delivering software as a service. They want to understand
the risks, but they do not want "same old".
Collaboration with LOB - Many of their tech innovation ideas are coming from their non-tech executive peers. Business execs, helped by reading materials (yes even airline ones) and peer sources, see several technologies as facilitating innovation. Yes, many do believe the I in CIO is Innovation. CIOs in turn see it as their job, not just to ensure security and compliance, but to deliver applications to delight business users, not to impress technologists. The bond between CIO and LOB is being strengthened on the back of innovation projects.
Vendor tip: Would a business executive understand your pitch? If not, leave out elegant architecture, methodology and other materials. Focus on what the CIO needs to delight the LOB.
CIOs are under huge pressure to help their businesses innovate. Their next generation of vendor partners will be brimming with ideas, will be intense and will themselves be innovating their own business models, channels etc.. The Chief Innovation Officer should expect no less from his/her supply chain.