Build Your Enterprise Innovation Program

Transform your business by adopting the culture and practices that drive innovation.

Why is innovation so challenging?

Most organizations want to be innovative, but very few succeed.

• Bureaucracy slows innovation: Innovation requires speed – it is important to fail fast and early so you can iterate to improve the final solution. Small, agile organizations like startups tend to be more risk tolerant and can move more quickly to iterate on new ideas compared to larger organizations.
• Change is uncomfortable: Most people are profoundly uncomfortable with failure, risk, and unknowns – three critical components of innovation. Humans are wired to think efficiently rather than innovatively, which leads to confirmation bias and lack of ingenuity.
• You will likely fail: Innovation initiatives rarely succeed on the first try – Harvard Business Review estimates between 70% and 90% of innovation efforts fail. Organizations that are more tolerant of failure tend to be significantly more innovative than those that are not (The Review of Financial Studies, 2014).

Based on surveys of global innovation trends and practices:

75%

Three-quarters of companies say innovation is a top-three priority.

Source: BCG, 2021

30%

But only 30% of executives say their organizations are doing it well.

Source: BCG, 2019

The biggest obstacles to innovation are cultural

Source: Harvard Business Review, 2018

The most common challenges business leaders experience relate to people and culture. Success is based on people, not ideas.

Politics, turf wars, and a lack of alignment: Territorial departments, competition for resources, and unclear roles are holding back the innovation efforts of 55% of respondents.

FIX IT

Senior leadership needs to be clear on the innovation goals and how business units are expected to contribute to them.

Cultural issues: Many large companies have a culture that rewards operational excellence and discourages risk. A history of failed innovation attempts may result in significant resistance to new change efforts.

FIX IT

Cultural change takes time. Ensure you are rewarding collaboration and risk-taking, and hire people with fresh new perspectives.

Inability to act on signals crucial to the future of the business: Only 18% of respondents indicated their organization was unaware of disruptions, but 42% said they struggled with acting on leading indicators of change.

FIX IT

Build the ability to quickly run pilots or partner with startups and incubators to test out new ideas without lengthy review and approval processes.

Source: Harvard Business Review, 2018

Use this research to outperform your peers

A seven-year review showed that the most innovative companies outperformed the market by upward of 30%.

Innovators are defined as companies that were listed on Fast Company’s list of the World’s 50 Most Innovative Companies for 2+ years.

Innovation is critical to business success.

A 25-year study by Business Development Canada and Statistics Canada (2006) showed that innovation was more important to business success than management, human resources, marketing, or finance.

Executive brief case study

Culture is critical.

INDUSTRY

Healthcare

SOURCE

Interview

This Info-Tech member is a nonprofit, community-based mental health organization located in the US. It serves about 25,000 patients per year in community, school, and clinic settings.

This organization takes its innovation culture very seriously and has developed methodologies to assess individual and team innovation readiness as well as innovation types, which are used to determine everyone's role in the innovation process. These assessments look at knowledge of and trust in the organization, individuals’ innovation profile, and their openness to change. Innovation enthusiasts are involved early in the process when it’s important to dream big, while more pragmatic perspectives are incorporated later to improve the final solution.

Results

The organization has developed many innovative approaches to delivering healthcare. Notably, it has reimagined patient scheduling and reduced wait times to the extent that some patients can be seen the same day. The organization is also working to improve access to mental health care despite a shortage of professionals.

Developing an Innovative Culture

• Innovation Readiness Assessment
• Coaching Specific to Innovation Profile
• Innovation Enthusiasts Involved Early
• Innovation Pragmatists Involved Later
• High Success Rate of Innovation

What is “innovation”?

Innovation is the practice of developing new methods, products, or services that provide value to an organization.

This does not have to be a formal process – innovation is a means to an end, not the end itself.

What does “new” mean to you?

• New application of an existing method
• Developing a completely original product
• Adopting a service from another industry

What does “value” mean to you? Look to your business strategy to understand what goals the organization is trying to achieve, then determine how value will be measured.

Innovation is often easier to recognize than define.

Align on a useful definition of innovation for your organization before you embark on a journey of becoming more innovative.

Info-Tech Insight

Some innovations are incremental, while some are radically transformative. Decide what kind of innovation you want to cultivate before developing your strategy.

Innovation program taxonomy

This research uses the following common terms:

Innovation Operating Model

The operating model describes how the innovation program delivers value to the organization, including how the program is structured, the steps from idea generation to enterprise launch, and the methodologies used.
Examples: Innovation Hub, Grassroots Innovation

Innovation Team

The innovation team may vary depending on the operating model, but it generally consists of the individuals involved in facilitating innovation across the organization. This may be a dedicated innovation department but does not have to be.

Innovation Methodology

Methodologies describe the ways the operating model is carried out and the approaches used in the innovation practice.
Examples: Design Thinking, Weighted Criteria Scoring

Innovation Program

The program for generating ideas, running pilot projects, and building a business case to implement across the enterprise.

Chief Innovation Officer (CINO)

This research is written for the person or team leading the innovation program – this might be a CINO, CIO, or other leader in the organization.

Pilot Project

A way of testing and validating a specific concept in the real world through a minimum viable product or small-scale implementation. The pilot projects are part of the overall pilot program.

Insight summary

Innovation is about people, not ideas or processes

Innovation does not require a formal process, a dedicated innovation team, or a large budget; the most important success factor for innovation is culture. Companies that facilitate innovative behaviors like growth mindset, collaboration, and the ability to take smart risks are most likely to see the benefits of innovation.

Very few are doing innovation well

Only 30% of companies consider themselves innovative (BCG, 2019), and there’s a good reason: innovation involves unknowns, risk, and failure, three things that people and organizations typically do their best to avoid. Counter this by addressing the barriers to innovation.

Culture is the greatest barrier to innovation

In a survey of 270 business leaders, the top three most common obstacles were politics, turf wars, and alignment; culture issues; and inability to act on signals crucial to the business (Harvard Business Review, 2018). If you don’t have a supportive culture, your ability to innovate will be significantly reduced.

Innovation is a means to an end

It is not the end itself. Don’t get caught up in innovation for the sake of innovation – make sure you are getting the benefits from your investments. Measurable success factors are critical for maintaining the long-term success of your innovation engine.

Tackle wicked problems

Innovative approaches are better at solving complex problems than traditional practices. Organizations that prioritize innovation during a crisis tend to outperform their peers by over 30% and improve their market position (McKinsey & Company, 2020).

Innovate or die

Innovation is critical to business growth. A 25-year study showed that innovation was more important to business success than management, human resources, marketing, or finance (Statistics Canada, 2006).

Blueprint deliverables

Each step of this blueprint is accompanied by supporting deliverables to help you accomplish your goals:

Sample Job Descriptions and Organization Charts

Determine the skills, knowledge, and structure you need to make innovation happen.

Innovation Ideation Session Template

Facilitate an ideation session with your staff to identify areas for innovation.

IT Digital Plan Prioritization Tool

Evaluate ideas to identify those which are most likely to provide value.

Prototyping Workbook

Document prototyping plans and feedback to refine subsequent iterations and develop a strong business case.

Key deliverable:

Innovation Program Template

Communicate how you plan to innovate with a report summarizing the outputs from this research.

Measure the value of this research

US businesses spend over half a trillion dollars on innovation annually. What are they getting for it?

• The top innovators* typically spend around 5% to 15% of their budgets on innovation (including R&D).
• This research helps organizations develop a successful innovation program, which delivers value to the organization in the form of new products, services, and methods.
• Leverage this research to:
  • Get your innovation program off the ground quickly.
  • Increase internal knowledge and expertise.
  • Generate buy-in and excitement about innovation.
  • Develop the skills and capabilities you need to drive innovation over the long term.
  • Validate your innovation concept.
  • Streamline and integrate innovation across the organization.

* Based on BCG’s 50 Most Innovative Companies 2022

30%

The most innovative companies outperform the market by 30%.

Source: McKinsey & Company, 2020

Info-Tech offers various levels of support to best suit your needs

DIY Toolkit

"Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful."

Guided Implementation

"Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track."

Workshop

"We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place."

Consulting

"Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project."

Diagnostics and consistent frameworks are used throughout all four options.

Guided implementation

What does a typical guided implementation (GI) on this topic look like?

A GI is a series of calls with an Info-Tech analyst to help implement our best practices in your organization.

A typical GI is 8 to 12 calls over the course of three to six months.

Workshop overview

Contact your account representative for more information.
workshops@infotech.com 1-888-670-8889

Phase 1

Define Your Mandate and Select Your Operating Model

Phase 1

1.1 Define mandate

1.2 Define ambitions

1.3 Define value proposition

1.4 Assess cultural readiness

1.5 Align with innovation operating model

1.6 Customize model

This phase will walk you through the following activities:

• Set your innovation north star by aligning on the goals, level of ambition, and focus of your program.
• Select an operating model archetype and customize it to represent your working situation.

This phase involves the following participants:

• Senior leadership involved in the innovation leadership team
• IT leadership that will be involved in supporting innovation
• Other organizational leadership crucial to the process

Build Your Enterprise Innovation Program

Case study

ArcBest

INDUSTRY

Transportation

SOURCE

Interview

ArcBest is a multibillion-dollar shipping and logistics company that leverages innovative technologies to provide reliable and integrated services to its customers.

An Innovative Culture Starts at the Top

ArcBest’s innovative culture has buy-in and support from the highest level of the company. Michael Newcity, ArcBest’s CEO, is dedicated to finding better ways of serving customers and supports innovation across the company by dedicating funding and resources toward piloting and scaling new initiatives.

Having a clear purpose and mandate for innovation at all levels of the organization has resulted in extensive grassroots innovation and the development of a formalized innovation program.

Results

ArcBest has a legacy of innovation, going back to its early days when it developed a business intelligence solution before anything else existed on the market. It continues to innovate today and is now partnering with startups to further expand its innovation capabilities.

“We don't micro-manage or process-manage incremental innovation. We hire really smart people who are inspired to create new things and we let them run – let them create – and we celebrate it.

Our dedication to innovation comes from the top – I am both the president and the Chief Innovation Officer, and innovation is one of my top priorities.”

Michael Newcity

President and Chief Innovation Officer ArcBest

1.1 Understand your innovation mandate

Before you can act, you need to understand the following:

• Where is the drive for innovation coming from?
  The source of your mandate dictates the scope of your innovation practice – in general, innovating outside the scope of your mandate (i.e. trying to innovate on products when you don’t have buy-in from the product team) will not be successful.
• What is meant by “innovation”?
  There are many different definitions for innovation. Before pursuing innovation at your organization, you need to understand how it is defined. Use the definition in this section as a starting point and craft your own definition of innovation.
• What kind of innovation are you targeting?
  Innovation can be internal or external, emergent or deliberate, and incremental or radically transformative. Understanding what kind of innovation you want is the starting point for your innovation practice.

What is “innovation” and what role does the CIO play?

Innovation is the practice of developing new methods, products, or services that provide value to an organization.

This does not have to be a formal process – innovation is a means to an end, not the end itself.

What does “new” mean to you?

• New application of an existing method
• Developing a completely original product
• Adopting a service from another industry

What does “value” mean to you? Look to your business strategy to understand what goals the organization is trying to achieve, then determine how value will be measured.

In this organization, the CIO is accountable for leading/supporting innovation.

Replace with your organization or company name.

Choose one of leading/supporting

Innovation is often easier to recognize than define.

Align on a useful definition of innovation and understand the role of the CIO in the process before you embark on a journey of becoming more innovative.

The source of your mandate dictates the scope of your influence

You can only influence what you can control.

Unless your mandate comes from the CEO or board of directors, driving enterprise-wide innovation is very difficult. If you do not have buy-in from senior business leaders, use lighthouse projects and a smaller innovation practice to prove the value of innovation before taking on enterprise innovation.

To execute on a mandate to build innovation, you don’t just need buy-in. You need support in the form of resources and funding, as well as strong leadership who can influence culture and have the authority to change policies and practices that inhibit innovation.

For more resources on building relationships in your organization, refer to Info-Tech’s IT Leadership Career Planning Research Center

We can categorize innovation in three ways

Evaluate your innovation goals in terms of focus, funding, and potential to transform.

What are your ambitions?

1. Develop a better understanding of what type of innovation you are trying to achieve by plotting out your goals on the categories on the left.
2. All categories are independent of one another, so your goals may fall anywhere on the scales for each category.
3. Understanding your innovation ambitions helps establish the operating model best suited for your innovation practice.
4. In general, innovation that is more external, deliberate, and radical tends to be more centralized.

Activity 1.1 Understand your innovation mandate

1 hour

1. Schedule a 30-minute discussion with the person (e.g. CEO) or group (e.g. board of directors) ultimately requesting the shift toward innovation. If there is no external party, then conduct this assessment yourself.
2. Facilitate a discussion that addresses the following questions:
   1. What is meant by “innovation”?
   2. What are they hoping to achieve through innovation?
   3. What is the innovation scope? Are any areas off limits (e.g. org structure, new products, certain markets)?
   4. What is the budget (i.e. people, money) they are willing to commit to innovation?
   5. What type of innovation are they pursuing?
3. Record this information and complete the “IT’s innovation purpose” section of the Innovation Program Template.

Download the Innovation Program Template