The Technologist’s DilemmaRefocusing on Innovation and Growth

26 June 2014

DISTRIBUTION COPY

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SPEAKER

Todd RayEVP of Strategy, Blue Rooster

toddr@bluerooster.com

Blue Rooster is a Seattle-based Microsoft Gold-Certified partner

that develops innovative solutions to meet the needs of modern,

digital enterprises

…specializing in social, mobile, responsive and business process-

specific applications

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Introduction

• Initial Idea: discussion of strategies for making people more productive using

information technology

• Based on a recent paper:

X?

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Innovation

Re-Focus:

How architects can help

develop "innovation"

capabilities in their respective

organizations

“Innovation”

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TOPICS

Part I: Business Context

Part II: Innovation Today

Part III: Innovation Mandate

Discussion/Q&A

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PART I – Business Context

GDP

Jobs

Cash

Cost of Capital

Forecast

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Sluggish GDP Growth

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Jobless Recovery

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Cash Reserves

http://www.seeitmarket.com/2013-cash-reserves-ranking-apple-u-s-corporates-lead-way-13574/

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Low Cost of Capital

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Capital Allocation Forecast

• Dividend increases,

share buy-backs

• M&A

• Hiring, technology,

plants and equipment

Re: technology – which business priorities should

we be targeting?

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PART II – Innovation Today

Innovation Types

Capitalist’s Dilemma

Re-thinking IT’s Role

Current Investment

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Investment in Growth and Innovation Lacking

“Capitalist’s Dilemma” – doing the right thing

for investors is the wrong thing for long-term

prosperity

Need: shift from “efficiency” thinking towards

growth and “market-creating” innovations

• 5 years post-recession, economy still

sputtering, corporations still stuck,

disappointing growth and job numbers

• Corporations sitting on piles of cash

• Investments (and markets) favor the

wrong types of innovation

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Re-Thinking IT’s Role

(https://www.pwc.com/en_US/us/increasing-it-

effectiveness/assets/it_spending_creating_valu

e.pdf

2007

• <15% IT budgets on

transformative innovation

• Competitive advantage

through IT = rethinking

spending on innovation

and value creation

• CEO, CFO, COO all

have roles

<15%

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Re-Thinking IT’s Role

(https://www.pwc.com/en_US/us/increasing-it-

effectiveness/assets/it_spending_creating_valu

e.pdf

20072012 – about same

• <15% IT budgets on

transformative innovation

• Competitive advantage

through IT = rethinking

spending on innovation

and value creation

• CEO, CFO, COO all

have roles

<15%

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Innovation Investment –

Current

Lower cost

production and

distribution of

existing products

and services to

existing

customers

Production of new and

better, mostly

evolutionary

products

Production of new classes of

disruptive products, markets and

customers

Market-Creating

Innovations

Sustaining Innovations

Efficiency Innovations

More

Jobs

Fewer

jobs

15%

20%

65%

Some

jobs

Investm

ent

Transfo

rmatio

nSo

me

Som

eM

ore

Mo

re

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Innovation Type Drill Downs

• Raise productivity

(net effect of raising

GDP/employee)

• “Low-end disrupters”

(e.g. WalMart)

• Process

improvements (e.g.

Toyota’s JIT

production)

• IW Enablement

• Free up capital for

other forms of

innovation

EFFICIENCY

• Replacement of old

products with new

and better models

(e.g. MSFT Office)

• Mostly evolutionary

• Typical focus of

incumbent firms'

resource allocation

strategy (repeatable,

consistent, etc.)

• Creation of fewer jobs

because they’re

substitutive

SUSTAINING

• More disruptive and

transformative

• Disrupts current

paradigm of scarcity

or high cost

• Dependent on tech.

breakthrough

• New business models

and customers

• New internal job +

upstream and

downstream jobs

• High capital

MARKET- CREATING

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PART III – INNOVATION MANDATE

Process Examples

Recommendations

Top 10 Dynamics

BKMs

Solution Complements

Sol’n Considerations

Capability Model

Pkg’d Solutions

Portfolio Rationalization

Impact Measurement

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Recommendations – What Can Be Done

What can be done to address the "Capitalist's Dilemma" and

re-purpose available capital and resources to promote

growth and innovation?

What is the

technologist/architect’s role in all

this?

What does a typical approach

look like?

What does a real-life example

look like?

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• Promote portfolio rationalization

methods that address long term

growth and innovation needs

• Focus on capabilities and

systems that address all three

forms of innovation, especially

those targeted at market-creating

innovations

• Leverage learnings from past

innovation efforts from other

firms

• Adopt best practices for ideation,

innovation and commercialization

Business and Technology Mandates

• Promote education of these

dynamics within business

schools and with experienced

business and IT management

• Re-set capital allocation rules

to promote long term market-

creating efficiencies

• Develop innovation

scorecards to complement

short-term operational ones

• Manage the company to

maximize the value of the

enterprise in the long term

Business

• Shift CIO (and overall IT)

thinking towards how it

contributes to innovation, growth

and value creation

• Engage the CEO, CFO and COO

to actively participate in aligning IT

initiatives with overall strategy, IT

value management, and customer-

facing business innovations.

• Understand your user base and

how "innovation happens" within

your company, both from a

technology and culture perspective

Technology

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• Promote portfolio rationalization

methods that address long term

growth and innovation needs

• Focus on capabilities and

systems that address all three

forms of innovation, especially

those targeted at market-creating

innovations

• Leverage learnings from past

innovation efforts from other

firms

• Adopt best practices for ideation,

innovation and commercialization

Business and Technology Mandates

• Promote education of these

dynamics within business

schools and with experienced

business and IT management

• Re-set capital allocation rules

to promote long term market-

creating efficiencies

• Develop innovation

scorecards to complement

short-term operational ones

• Manage the company to

maximize the value of the

enterprise in the long term

Business Technology

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Top 10 Innovation Dynamics

Market Forces/

CompetitionIndustry

Business Priorities

CultureFinancial

Condition & Commitment

Things impacting your innovation mandate, approach to innovation or innovation success:

Leadership (Vision,

Sponsorship, etc.)

Org Structure/

Model

Governance(Roles,

Processes and Rules of

Engagement)

Organizational Capability

(creative agility, abrasion,

resolution)

Innovation Processes and

Enabling Technology

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Ideation, innovation and commercialization

process and solution BKMs

Essentials:

• Learn from mistakes

(and successes) of

past

• Align best known

methods (BKMs) with

an organization's

overall innovation

process, culture and

business landscape

• Technology: focus design on

making the organization

successful relative to its:

(a) goals

(b) processes

(c) organizational/cultural profile

(d) OCM dynamics (e.g.

willingness to change)

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Typical Process

Key early stage activity:

Learn more about the organization's existing

innovation process, to the degree that one exists

(most large companies have one by now)

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Real-World

Examples

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Solution Considerations

• Having a pre-defined understanding

of goals and outputs has a

significant impact on any innovation-

related solution design.

Goals and

Desired

Outputs

• Formal, structured,

vs. informal,

unstructured

• Many organizations wish to pursue a more structured, directional, multi-stage idea

campaigns/competitions in a controlled fashion - with specific filtering goals (e.g. 200

ideas down to 5 to be funded).

• An organization may also choose to pursue unstructured, ongoing idea sharing along

with more punctuated campaign efforts.

• Innovation-type solutions vary in

terms of the sources of inputs

• Topics for discussion/development

may be determined up front or truly

crowd-sourced

Participation

and Topic

Selection

• Internal, external,

selective

participation by

experts only, etc.

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Solution Considerations

Innovation solutions can provide

for:

• Longer-lived, sustained ideation,

discussion and development; or

• More punctuated, time-blocked

campaigns run on either an ad-hoc

or periodic basis

Timeline and

Lifecycle

• Closely related to

the goals and

desired outputs

• Critical for success and will vary

considerably depending on ->

• Defines: rules, gates, workflows,

incentives/reward systems, review

cycles, reporting, funding criteria,

etc. implemented accordingly.

Governance

and Rules

• Closely related to

goals, desired

outputs,

timeline/lifecycle,

etc.

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Innovation Solution Capability Model

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Packaged Solutions – Considerations

• Been around for a while

• Gartner coverage started

in 2002

Basic idea management

tools focused on

collection and

prioritization of ideas

Value prop: alternative to

email, spreadsheets,

and “suggestion box” for

high volume efforts

Vendors (current):

Standalone (~20) and platform (e.g.

SharePoint -~3)-based

~20% dedicated to innovation products

(only)

Most use in NA/EMEA

~60% <5,000 users (internal)

~30% >5,000 users (internal)

~10% external users

~40% on-prem, ~60% cloud

Most vendors cover most capability

sets (gamification, social, execution,

portfolio management, integration and

mobility represent the greatest differences)

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Solution Alternatives and/or Complements

• Innovation and IP marketplaces

• Crowdsourcing sites

• Voice of the customer

• Prediction markets

• Team meetings and brainstorming

• Storytelling and scenarios

• Focus groups

• Customer-centric design

• Problem solving (Triz)

• Patent exploration

• Pattern based modeling

• Social monitoring and analytics

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Portfolio

Rationalization

• What is our vision for further innovation in the future to move closer to our needs in the areas of things like market-creating innovations?

• What do we need to change in terms of technical and organizational capabilities to meet our future state vision?

• What is our strategy to address future state needs from a technical standpoint

• What sort of specific programs of change are needed over what time frame?

• What is the state of our ideation/innovation capabilities today? Are they enterprise-level or business-specific?

• How do we deliver these capabilities from a technical standpoint?

• How are they performing in terms of information worker and business capability enablement?

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Impact Measurement and Communication

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Case Study

Major Oil Company

• Technology Management and Architecture Org (incl. EA

Function)

Global Innovation Group

o Ideation Campaign – late 2000s

– Social Computing Strategy

– Looked at existing business, user base, capabilities and

portfolio and made recommendations for programs of

change at enterprise level

– Exec-level recommendations on innovations enabled by

social computing opportunity space (including prediction

markets, virtual worlds, social collaboration, etc.)

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Conclusion

Technologist’s Dilemma

Just like with the “Capitalist’s Dilemma”, whereby there’s investment gravity

towards efficiency innovations and “running the business” innovations (which

limit job growth and economic recovery), there’s a “Technologist’s Dilemma”

whereby the same dynamics impact IT investments!

Biggest impact opportunity: technologies that grow and transform the business

E.g. market-creating innovations (<15% of IT budgets overall)

EAs can help!

Influence strategies -> growth and market-creating innovations

Portfolio rationalization methods that address long term growth and innovation needs

Recommendation of best practices for ideation, innovation and commercialization processes

Develop innovation measurement and scorecard capabilities

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Re-thinking the original concept

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GETTING STARTED

Strategic Innovation Discovery Workshop• Review of current

environment,

challenges and plans

• Assessment of high

impact focus areas

• Review of alternatives

Deliverable:

Recommendations and

prioritized action planContact strategy@bluerooster.com

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Additional Information

Blogs:

• Re-Launching Your SharePoint Strategy for the SoMo

Generation (June 2014)

• Critically Re-thinking Governance, Again: Modernizing

How You Manage SharePoint (May 2014)

• Re-thinking Adoption, Again – Novel Ways to

Modernize SharePoint (April 2014)

• Avoiding Social Entropy – Getting out of your Social Silo

and Into the Big Tent (March 2014)

• What’s Your Altitude? Navigating the 5 Levels of

Strategy (March 2014)

• Productivity is Not Just a Buzzword (January 2014)

• An Un-radical Vision for Intranets in 2014 – Back to

Basics, Dialing Back the Hype (December 2013)

• Adapting Social Solutions to Modern Workstyles

(October 2013)

• Developing Agile UX Strategies (September 2013)

• A Case for Agile Digital Strategy (September 2013)

Papers: (available upon request)

“What’s Your Altitude? Navigating the 5

Levels of Strategy Relevant to the Modern

Digital Enterprise”, February 2014

“Strategies for Delivering Productivity and

Value with Information Worker Technologies”,

December 2013

“An Un-Radical Vision for Intranets in 2014 -

Back to Basics, Dialing Back the Hype”,

December 2013

“Adapting Social Solutions to Modern

Workstyles”, October 2013

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Discussion

create. build. experience.