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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Serie: Wiley CIO
- Sprache: Englisch
A must-read leadership guide for CIOs and executives whose careers depend on creating value and growth through continuous innovation Innovation is the hot topic. Everyone's talking about it, but there seems to be a lot of misperceptions about getting it done. Innovating for Growth and Value is aimed at CIOs and other technology leaders in the modern enterprise. This insider's guide to innovation presents repeatable processes, detailed methodologies, and robust frameworks for innovation and continuous transformation in today's fast-paced business environments. It provides actionable programs for developing and successfully executing profitable and repeatable innovation strategies. * Focuses on specific critical areas where innovation is imperative * Features real-world stories and revealing anecdotes * Presents interviews from international companies such as Netflix, IBM, Cisco, Boeing, Facebook, Intel, Microsoft, McKesson, Flextronics, and more Without innovation, your company cannot compete and cannot survive. So the real question isn't whether to innovate or not. The real question is how to innovate and make innovation strategies work in the modern enterprise. Thoughtfully written and carefully researched, Innovating for Growth and Value grasps the central truth about innovation with a wealth of information made truly valuable for IT leaders and CIOs.
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Seitenzahl: 320
Veröffentlichungsjahr: 2013
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Contents
Cover
Contents
Praise
Title Page
Copyright
Dedication
Foreword: Innovating for Continual Growth and Prosperity
Acknowledgments
Introduction
The Other Side of the Firewall: Understanding Your Company's Markets
It's All about People
Making the Case for Continuous Business Transformation
Chapter 1: The Innovation Challenge
The Psychology of Innovation
An Expanding Range of Influence
Speed and Failure Are Essential in Continuous Innovation Strategies
Fail Fast and Fail Smart
The New Speed of Change
Focus on the Business Challenge, Not on the Technology
In the Modern Enterprise, True Innovation Takes Many Shapes and Forms
Notes
Chapter 2: Governance Trumps Process
Being a Leader of Innovation at an Innovative Enterprise
Great Companies Avoid the “Me Too” Syndrome When Innovating
Cycles of Innovation and Adoption
Good CIOs Are Leaders at All Stages of Innovation
From Enabler to Innovator: The Evolving Image of the CIO
Replacing Up and Down with Left to Right
Creating a Culture of Innovation
Converting Ideas into Successful New Products and Services
Notes
Chapter 3: Leveraging Multiple Skill Sets
Networking and Connecting
Overcoming Obstacles to Innovation
Two Types of Thinking
Overcoming Habits
Breaking Through and Moving Forward
Professor of Innovation
Leveraging the Cloud and Thriving on Innovation
Notes
Chapter 4: Accelerating Innovation
In the Modern Enterprise, IT Is the Backbone of Innovation
Underlying Principles of Innovation
A Practical Taxonomy of Innovation
The Mouse in the Maze
Managing Innovation Across the Enterprise
Eight Action Steps for Driving Innovation
Notes
Chapter 5: Innovation Begins with Business Strategy
The New Face of IT Executive Leadership
Improvisational Skills Can Elevate Innovation Leadership Capabilities
Blending Innovation and Operations
Innovating in the Battle Against Cancer
Focusing on Value Creation, Improved Margins, and Staying Ahead of the Trend Curve
Escaping the Pull of the Past
Chapter 6: Evolving Relationships Across the C-Suite
From Captain to Coach, from Controlling to Enabling
Connecting the Dots Between Innovation and Analytics
Digging Deeper into Big Data
Innovation in the Age of the Industrial Internet
Moving Toward the Customer
Lining Up the Innovation Roadmaps
Designing Practical Innovation Strategies
Managing Between Extremes
Three Complementary Pairs of Roles
Note
Chapter 7: Why Credible Leadership Matters
Do Not Hesitate to Be a Leader
Sometimes Getting Out of the Way Is the First Step to Achieving Innovation
Innovation Conundrum
Accelerating Innovation Through Partnerships
A Shifting Mindset
Leading Innovation and Driving Transformation
Managing the Merger of Culture and Technology
Two Tiers of IT Innovation in the Modern Global Enterprise
A Role Model for Innovation and Leadership
The Next Big Wave: IT Value Creation
Where Innovation Begins: Understanding the Goals and Objectives of the Business
The Four Dimensions of Continuous Innovation and IT Transformation
Building a Hybrid Platform for Continuous Innovation
Making the Case for Top-Down Innovation in the Enterprise
Avoiding “the Emperor Has No Clothes” Syndrome
Note
Chapter 8: Leveraging Social Collaboration to Drive Innovation
Tangible Results Through Social Media
Embracing the Social Workforce
Putting Innovation in the Hands of Users
Innovation and Social Collaboration
Note
Chapter 9: Living with Uncertainty
Keep Your Eyes on the B2B Internet
Trust, Freedom, and Responsibility: Keys to Transformational Leadership and Continuous Innovation
Key Traits of Innovative IT Leaders
Security Is Integral to IT Strategy
Maintaining Credibility: You Have to Know When to Get Down in the Weeds
Think Multiregional Before Committing to Global Markets
Walking the Talk
For Many Reasons, Now Is the Perfect Time to Be the CIO
Revisiting the Relationship Between Innovation and Entrepreneurship
The Emerging Ecosystem of Continuous Innovation and Transformation
A Historic Moment
Notes
Recommended Reading
Meet Our Sources
About the Author
About HMG Strategy, LLC
Index
End User License Agreement
List of Tables
Chapter 4: Accelerating Innovation
Table 4.1 Innovation and Execution
List of Illustrations
Chapter 1: The Innovation Challenge
Figure 1.1 Characteristics of Leadership
Figure 1.2 The CIO's Circles of Influence
Chapter 2: Governance Trumps Process
Figure 2.1 IT Life Cycle in Value Creation: Perpetual Pendulum
Figure 2.2 IT Life Cycles—Another Version: Virtuous Cycle
Guide
Cover
Contents
Start Reading
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Praise for Leading the Epic Revolution: How CIOs Drive Innovation and Create Value Across the Enterprise
Modern markets are changing and evolving at an ever-increasing pace. Future success will require a culture that embraces continuous improvement and rapid innovation. The stories and advice in Hunter's new book will definitely help those who read it optimize and refine their innovation strategies.
—Hunter W. Jones, VP, Enterprise Services, and CIO, Cameron International Corporation
Great stories, excellent advice, and timely, practical strategies as companies and executives manage through the transition to social, mobile, and cloud. This is a book worth reading from cover to cover.
—Tony Zingale, Chairman and CEO, Jive Software
Leading the Epic Revolution details the processes behind the innovation cultures at highly successful companies such as GE, IBM, AT&T, Box, Facebook, Netflix, and many others. I recommend this book for all forward-thinking executives.
—Mike Kail, VP, Information Technology, Netflix
LEADING THE EPIC REVOLUTION
How CIOs Drive Innovation and Create Value Across the Enterprise
HUNTER MULLER
Cover image: Nikada/iStockphoto Cover design: Wiley
Copyright © 2013 by Hunter Muller. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
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Library of Congress Cataloging-in-Publication Data:
Muller, Hunter, 1960– Leading the epic revolution : how CIOs drive innovation and create value across the enterprise / Hunter Muller. pages cm. — (CIO series) Includes bibliographical references and index. ISBN 978-1-118-34047-9 (cloth); ISBN 978-1-118-43189-4 (ebk.); ISBN 978-1-118-43193-1 (ebk.); ISBN 978-1-118-43194-8 (ebk.) 1. Information technology—Management. 2. Technological innovations—Management. 3. Diffusion of innovations—Management. 4. Chief information officers. I. Title. HD30.2.M84947 2013 658.4'038—dc23 2013002822
For Sandra, Brice, and Chase
FOREWORD: INNOVATING FOR CONTINUAL GROWTH AND PROSPERITY
All companies have different needs and priorities. What all companies have in common, however, is the need to grow. And growth, to an investor, is best measured by increased value.
There are a relatively small number of ways to generate enduring value. Companies can introduce new products or services, attract new customers, and open new markets. They can also improve the quality of their existing products, raise their level of efficiency, and leverage economies of scale.
Accomplishing any of those objectives requires innovation. Companies cannot simply stand still and keep doing the same things they were doing yesterday. The world is changing continually, and companies have to keep pace or risk falling behind.
At McKesson, we fully understand that we live in changing times. We are not a consumer brand, but our presence is extraordinary. We are the largest pharmaceutical distributor in North America, distributing one-third of the medicines used every day.
We also develop and install health-care IT systems that eliminate the need for paper prescriptions and paper medical records. Our software and hardware are used in more than 70 percent of the nation's hospitals with more than 200 beds. Our hospital information system solutions include electronic health record system (EHR) and clinical decision support systems, 3-D radiology imaging systems, and analytics designed for health care. Our Healthcare IT division also serves diverse areas within the health industry by offering solutions such as pharmacy automation and medical claims management software. And we handle the majority of health-care claims transactions—tens of billions of them—in the United States.
We touch virtually every stakeholder in health care—physicians, manufacturers, hospitals, providers, and consumers. That's a big universe of stakeholders. In fact, we are unique in the breadth and depth of services we offer to health care. We want to keep them happy, and we want to serve their needs better than anyone else can.
I think most of us would agree that innovation happens close to the customer. The better we understand what our market wants, the better we understand what our current customers and our potential customers need; and the closer we are to their world, the better we can apply our unique perspective to see the gaps between what is and what could be.
Typically, a company's relationships with its customers happen far away from IT. They happen close to sales, close to marketing, and close to customer service, but far from IT. That perceived distance can be a disadvantage for IT.
How does IT overcome that disadvantage? I would submit to you that we can take on a consulting role—if we develop the capability, the intimacy with the business, and the awareness of the key business drivers that earns us a seat at the planning table. Then we can work side by side with business leaders to craft solutions that will help the business prosper and grow.
Those solutions, in many instances, will be the result of experiments. That's how innovation occurs, through experimentation. We aren't talking about massive IT projects or multiyear, multimillion-dollar initiatives, we're talking about experiments with mobile devices, with tablets, with cloud services, with social media.
But here's a critical point: IT isn't going to control those experiments tightly. Instead IT will participate, advise, and consult. Most important, IT will be aware of the hundred or so experiments that are happening at the same time across the entire span of the business and will begin threading common technologies through those experiments, linking them to existing systems, building or leveraging common platforms, and minimizing rework and reinvention.
For example, at McKesson we saw more than 20 different development organizations that were each beginning to experiment with mobile computing. By being aware of and helping with these experiments, we were able to put together a single mobility infrastructure and a mobile platform development team that allowed each of the businesses to participate fully and at very low cost, instead of mounting their own one- or two-person development capability or outsourcing that capability somewhere else.
Over and over again, we see that our presence in these businesses, through direct relationship management, through ties into their strategic planning organizations, allows us to encourage and support innovation across the company.
Some of those innovations become real products and services, and they create a competitive edge. When they become truly successful, they are likely duplicated by competitors, and eventually they begin to look more like commodities. During this evolution, IT's job shifts from innovation enablement to operational rigor, and then finally to compressing the costs out and operating at the highest level of efficiency possible.
By embracing that cycle and allocating part of its effort toward each segment of the cycle, IT continually feeds the business and helps it thrive.
This isn't magic. It's discipline—the same discipline required to manage any successful business. You make sure that you're collaborating with the stakeholders at every level. You make sure that you have good governance in place so that you can tie these efforts together across the many divisions of your organization. You make sure you have the right talent and capabilities for each of the jobs to be done. And you make sure you operate at competitive levels of cost and quality.
But you cannot possibly sit at that table unless you have established your credibility. If you can't demonstrate the ability to execute well on basic IT functions, you aren't going to be seen as a credible leader. The best path to credibility is by operating IT like a business. Measure what you do, relentlessly apply the basic principles and leadership concepts of any service organization. Experiment, learn, and, when necessary, kill your experiments quickly. Move with velocity and confidence and humility.
I came into the job of CIO seven years ago. I'm probably the only CIO of a Fortune 15 company who had never been a CIO before. I was running several of our health-care technology businesses when our CEO asked me to apply the same principles we used in the businesses to the IT function. He wanted me to run IT like a business.
The first thing I did was try to figure out who my customers were. The customers were the 12 major divisions of McKesson. I brought together the presidents of those organizations and formed a governance board, and then brought together the IT leaders of those organizations and set up a CIO council. We then brought in their key technologists and set up a technology council. Essentially I said, “My job is enabling you. I need to be working on what you need.”
We turned IT into an organization that exists to fulfill IT demand. By working together across each of our businesses, and by holding ourselves accountable to the presidents and IT leaders of each of the organizations, and by planning only in collaboration, never in conflict, we were able to achieve some pretty dramatic results on every front. At the same time, the maturity of governing other shared services also expanded, and our presidents now oversee more than $3 billion of shared expense through this overall governance process.
Unquestionably, new technologies are important. We need to master and manage them. But the real challenge for IT is building new capability, leadership talent, business relevance, connections, and relationships with business leaders. IT needs to stay on top of the trends and shifts impacting the company and its customers. That's how IT delivers value to the modern enterprise: by understanding how to help it prosper and grow in a continually changing world.
—Randy SprattEVP, CIO, and CTOMcKesson Corporation
ACKNOWLEDGMENTS
This is my third book, and like its predecessors, it is primarily a work of collected knowledge. The concepts and frameworks contained in this book are derived primarily from the experience that I acquired over three decades as a consultant in the IT industry. But this book also represents two years of persistent research, involving dozens of interviews. I could not have completed this book without leveraging the collective wisdom of many expert sources. I thank them sincerely for their time, their energy, their intelligence, and their generosity.
I am deeply grateful to Rich Adduci, Thaddeus Arroyo, Bruce Bachenheimer, Ramón Baez, Linda Ban, Puneet Bhasin, Whitney Bouck, Greg Buoncontri, Tim Campos, Mike Capone, Tim Crawford, Sameer Dholakia, Tim Dilley, John Engates, Carol Fawcett, Jay Ferro, Thomas Fountain, Peter High, Kim Hammonds, Doug Harr, Donagh Herlihy, Daphne E. Jones, Sheila B. Jordan, Mike Kail, Jim Knight, Dr. William R. LaFontaine, Jonathan Landon, Françoise LeGoues, Ralph Loura, Tony Leng, Arthur McAdams, Chris McGugan, Todd McKinnon, Michael Minelli, Gordon Payne, Don Peppers, Steve Phillips, Mark Polansky, Bruce Rosenstein, Bill Ruh, Brian Queenin, Doug Schneider, Tony Scott, Frank Slootman, Dave Smoley, Randy Spratt, Tim Stanley, Kimberly Stevenson, Don Tapscott, Patricia Titus, Jim Tosone, John Yapaola, and Tony Zingale.
While researching and writing this book, I received invaluable assistance and ongoing support from my colleagues at HMG Strategy: Cathy Fell, Kristen Liu, Melissa Marr, and Amanda Vlastas.
I also extend my sincere thanks to Sheck Cho and Stacey Rivera, my editors at John Wiley & Sons, who had faith in the value of the project and were patient when I missed my deadlines.
I owe a special debt of gratitude to Mike Barlow, the coauthor of Partnering with the CIO (Wiley, 2007) and The Executive's Guide to Enterprise Social Media Strategy (Wiley, 2011). Mike served as project manager for this book, and his guidance was truly invaluable. In addition to being a talented writer and editor, Mike is a genuinely nice guy. Thank you, Mike!
Most of all, I want to thank my wife, Sandra, and our two sons, Chase and Brice, who put up with long nights of writing, endless phone calls, and lost weekends of heavy editing.
INTRODUCTION
If you believe, as I do, that technology is a primary driver of wealth and prosperity, then it's hard to imagine a better time to be alive. Yes, we are living in a time of great change. But much of the change we see around us is genuinely positive. People are living longer, enjoying their families more, and spending more time following their passions. When you take an inventory of the pros and the cons of modern life, there's no question that we're better off today than we were 100 years ago.
Our health, our material wealth, and our leisure time can all be traced back to technological innovation. In truth, it's hard to overestimate the positive impact of technology on our world.
But all change requires credible leadership. When good leadership is in place, innovation follows. Innovation sets the stage for transformation. Leadership, innovation, and transformation aren't merely words. They are stages in a natural process of change and evolution that elevates us, as individuals and as organizations.
One of the main reasons that I love my job is because it enables me to meet regularly with the world's top CIOs and IT leaders. Talking to brilliant people, listening to their stories, and sharing ideas is inspiring and fulfilling.
As human beings, we learn by sharing stories. Like my previous two books, this book is essentially a collection of stories told by extremely bright people at the peaks of their careers. I truly believe that the work we do at my firm, HMG Strategy, is part of a larger process by which critical information is shared and distributed across a global network of people united by a genuine passion for elevating the role of information technology.
We've reached an interesting moment in the history of IT. Everyone seems to agree that information technology is important and indispensable. But there is a growing debate over which part of the enterprise should be in charge of information technology. The debate isn't trivial. Careers are at stake, to be sure. But perhaps more important, a new vision of the future is crystallizing. The modern enterprise is reshaping and transforming itself into something new and different.
The role of the CIO in that transformed enterprise isn't entirely clear. What does seem clear, however, is our collective responsibility to define that role, explore its potential, and map its dimensions.
I strongly believe that the CIO must be a leader of innovation and transformation, and not a follower. As a group, CIOs have knowledge and experience that are exceptional and unique. Who else but the CIO can “see” across every functional unit and division of the enterprise, understanding and perceiving all of the technology that enables the modern corporation to survive?
I urge CIOs to embrace change and become proactive champions of continuous transformation. CIOs have earned their seats at the executive table. Now we need to show the world what we can do.
The key to becoming a successful leader in any business is understanding the business. By understanding their business, CIOs can use that knowledge to create the optimal alignment of technology and strategy.
Ideally, CIOs should understand their company's customers and competitors even better than the company's chief marketing officers and vice presidents of sales understand the company's customers and competitors. CIOs with deep knowledge of external markets are well positioned to talk strategy with their peers in the C-suite.
Additionally, CIOs should focus more on bringing innovation to market. Innovating within IT generally creates efficiencies and reduces costs. Innovating for external markets, however, has the potential to produce revenue and increase shareholder value. From my perspective, strong CIOs focus on both internal and external innovation. Focusing on external innovation means focusing on the needs and desires of customers.
The Other Side of the Firewall: Understanding Your Company's Markets
Do you have a clear understanding of your company's markets? Do you know what customers want and what drives value on the other side of the firewall?
Those are the kinds of questions that should be keeping you up at night. By now, most of the critical technology challenges—the daily blocking and tackling—should be under control and manageable. Today's successful CIOs focus on creating value and driving business growth. They are more than stewards of the company's IT investments—they are innovators, pioneers, and transformational leaders of the epic revolution. They build open and trusting relationships across the C-suite, enjoy truly bidirectional dialogues with their peers, and keep watch on what's going on in the world outside.
Their primary focus has shifted from internal to external. They scour the Internet for news about changes in markets. They know how the competition leverages technology, and they make sure that their IT team is ready to support similar or better technology. They scout the horizon for new ideas and innovations that can be put to use to create competitive advantages. They are no longer the people who keep the servers running—they are the men and women who help the company stay ahead of the pack in a hypercompetitive global economy.
In other words, they are leaders. They are indispensable executives with skin in the game. Their success is measured in economic terms, rather than in purely technical terms. Earnings per share is their key metric, and their performance is judged by their ability to work smoothly and effectively with the C-suite to achieve the company's strategic goals.
Again, it all comes down to focus. If the focus is internal, the best you can hope for is an IT shop that delivers great service to the enterprise. But when the focus is external, the sky is the limit. CIOs who understand the needs of their companies' external customers are worth their weight in gold. They are the transformational leaders who support collaboration and communication across business silos to deliver fabulous service and great products to external markets and external customers. They fundamentally understand the economics of capitalism. On a deep level, they understand the truth of how business works. They know in their hearts that markets and customers—the people who live outside the firewall—determine which companies succeed and which fail.
The modern CIO did not spring into existence overnight. Today's CIO is the result of three decades of evolution. It seems entirely natural that the CIO's focus has shifted from internal to external. Outside is where the money lives. If you believe in following the money, it makes perfect sense to keep your eyes and ears trained on what's going on in the world around you.
It's All about People
CIOs must also strive to become trusted partners and consultants to the business. CIOs must inspire confidence, through words and actions. Most of all, CIOs must be champions of people. When the people are on your side, anything is possible. Technology will get cheaper, faster, and more powerful. But it will never fully replace people. Having the right people will make you; having the wrong people will break you.
Do you have a strong team? Have you surrounded yourself with smart people? Have you earned their trust and loyalty? Have you provided the strategy, direction, guidance, leadership, and mentoring they need to elevate their game and produce superior results? Do they have your support? Have you given them the freedom they need to succeed?
I believe that people will always trump technology. That's why I write books about people. As it happens, the people I write about are executives whose jobs involve making decisions about technology. I am fascinated by their stories, their insights, and their opinions. I hope that you enjoy this book and find it a valuable source of new ideas.
Making the Case for Continuous Business Transformation
As I mentioned, this is a book of stories and anecdotes. The style of my writing is conversational and informal. I think that's the best approach for a modern business book. I would like to begin by recounting a conversation I had recently with Mike Hill.
Mike has been with IBM for 35 years, and like many other executives at IBM, he has held a variety of positions within the company. His current title is vice president of enterprise initiatives. Essentially, Mike leads a team that is responsible for taking new ideas with great potential and building them into businesses that can be rolled back into the core IBM business.
In the past year, I have interviewed Mike several times. Each time we've spoken, he has shared valuable insights gathered over the course of his long career. In one of the interviews, I asked Mike to explain how a large company like IBM pursues a strategy of continuous innovation and transformation. Here's a condensed version of what he told me:
We know a lot about transformational leadership here at IBM. We've been on a path of continuous transformation for the past 20 years. We can execute on our strategies today because we transformed—and continue to transform—our organization and our businesses. We take the idea of transformational leadership very seriously.
I really appreciate how Mike makes the case for an integrated approach to leadership, innovation, and transformation. Here is another portion from our conversation about leadership:
We are in a new era. Today's markets are dynamic and volatile. Traditional leadership models can't keep up with the accelerating pace of change. Remaining competitive requires continuous business transformation and tight operational alignment. CIOs are perfectly positioned to provide the guidance, expertise, and leadership needed to navigate smoothly, safely, and effectively through this new and exciting world.
Our experience with cloud computing here at IBM is a good example of the kind of transformation and alignment that creates a path for success. For many years, we had relied on our Business Leadership Model to create and nurture new businesses within IBM. That model of developing and supporting new businesses had proved very successful for us.
But when we looked at the cloud, we saw as a multibillion-dollar business opportunity, and we knew that we needed a different kind of model to bring that business to fruition. Sam Palmisano, who was our CEO from 2000 to 2011, created a new strategy team called Enterprise Initiatives. That's the team that I lead. Our mission is taking new ideas with great potential and building them into businesses that can be rolled back into the core IBM business.
What does that mean? It means watching over them, developing their portfolios, protecting their funding, and driving initial sales. It means helping them scale up and nurturing their leadership. Our job is building and installing all the plumbing that those new ventures will need to survive and succeed in a fiercely competitive business environment.
For Sam and his successor, Ginni Rometty, it made perfect sense to create and support an innovative approach for building and scaling new initiatives within IBM. They truly believe in transformational leadership, and their business decisions reflect that sincere commitment.
From my perspective, it seems clear that leadership, innovation, and transformation are inextricably woven together. They are strands of a larger tapestry, and they are absolutely critical to the continuing success of organizations such as IBM.
I asked Mike for his perspective on the current state of cloud computing, since that is also one of his passions. Here is what he told me:
Sometimes I worry about the word “cloud,” because it makes people think of something magical. But there's nothing really magical about cloud computing. It won't suddenly make your company more agile or your IT team more efficient.
Cloud computing can be very useful, and it offers many tangible benefits to the modern business. But the cloud represents a genuine change from the past, and as we all know, change is always difficult. Change takes years, and it involves real work. There are no magic wands or incantations to speed the process along. You've got to map your existing systems and infrastructure onto a new frame of reference, and that takes time and effort.
The cloud grid is different from the legacy grid. It's a whole new world, complete with peril and opportunity. Getting there requires leadership, and CIOs will play a huge role in the transformation from legacy to cloud computing.
In my current role, I am responsible for delivering the 2015 P&L [profit and loss] roadmap for cloud computing within IBM. From our perspective, the cloud is an integrated value proposition, not just a set of parts. So we put together a team to drive our cloud initiatives, and my job is leading the team.
We don't expect cloud computing to replace traditional computing in the near term. We expect that in 2015, about 90 percent of the typical IT budget will be spent on legacy systems. But we expect to see more and more cloud-enabled and cloud-centric workloads. Our research shows that moving workloads into the cloud can generate greater efficiency and agility. We're betting that when businesses see the potential value in cloud computing, they will naturally gravitate toward it.
That gravitational attraction will surely have an impact on CIOs. Faced with demands for greater agility, faster turnarounds, and lower costs, CIOs will naturally look to the cloud for potential answers. They will also look to other promising technologies, such as mobile, social, and big data analytics. Harnessing all of those newer technologies, and making sure they work together effectively to produce real business results, will require transformational leadership.
At the end of one of our conversations, Mike reminded me that even the greatest of strategies can fail unless you have also got great execution. In the final analysis, execution is what counts. In an era of continuous change and rapid evolution, the ability to execute on a vision is the key to success. From my perspective, the role of the CIO in leading innovation and transformation change has never been more important.
Chapter 1The Innovation Challenge
A brilliant editor once told me that all news is local. In other words, unless the news has a direct impact on you or someone you know, it is largely irrelevant.
His observation also applies to IT innovation. A new tool or solution qualifies as innovation when it delivers a tangible benefit that helps you perform a task or achieve an objective faster, better, and more cost effectively than before. When it does not deliver a tangible benefit that leads to some kind of measurable improvement, I do not think it qualifies as innovation.
It is quite possible that a particular innovation can deliver tangible benefits to some people and to some organizations, but not to all people and to all organizations. And it is also quite possible that a particular innovation might be great for a large organization, but prove impractical for a small organization.
If you accept the idea that innovation has to provide some tangible benefit, it becomes apparent that global innovation does not necessarily translate into local innovation. Scale and location matter. They are variables that must be taken into account when considering the potential value of innovative projects.
My research into innovation has convinced me that successful innovation models are complex and multidimensional. They are neither simple nor linear. Like physics, innovation seems to work differently at different ends of the scale. As a result, small organizations and large organizations are likely to approach innovation in different ways.
Innovation can appear dramatic or mundane. It can be sustaining or disruptive. It can have a large audience or a small audience. It can result in high-margin gains or low-margin gains. It can be embraced and adopted quickly, or over time.
Will a standard model for innovation emerge? Possibly, but it will not be a simple model. It will look more like a network or a bundle of synapses. It will not be reduced into a binary equation. In fact, I see at least six distinct capabilities required for continuous innovation in the modern enterprise:
1.
Multidirectionality.
The modern innovation model will take multiple paths and explore multiple options. It will combine internal and external resources. It will have focus and structure, but it is also flexible and resilient. It will assume a certain level of risk, with the understanding that risk is proportional to reward.
2.
Inside and outside balance.
Successful innovation strategies will leverage a blend of traditional research and development (R&D) and external resources to find creative solutions and serve new markets.
3.
Redefined teams.
