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IT + IC = Innovation


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IT is ever more available and affordable. But IT alone does not drive innovation. For that, you need to build an ecosystem around IT. We call this ecosystem intangible capital (IC). This presentation by Mary Adams of Smarter-Companies at the Microsoft WinDays14 conference contains lots of ideas and inspiration to drive innovation in your own organization.

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IT + IC = Innovation

  1. 1. IT + IC = Innovation Mary Adams, Founder
  2. 2. This project re-built 14 bridges during 10 summer weekends and shows the potential for innovation even in traditional industries.
  3. 3. Smarter-Companies Inc. We’re living a seismic change Industrial Era Knowledge Era Agricultural Era As we endeavor to increase innovation, we are often hampered by our industrial roots. This presentation highlights some of the basic management concepts of the industrial era and the knowledge-era equivalent.
  4. 4. Inspirirani ljudima. IT (information technology)
  5. 5. Making things Solving problems We still make and use city buses but some of the most interesting innovation comes in the use of open data from GPS in the buses that changes the experience of finding and catching a bus.
  6. 6. Efficiency Effectiveness Kahn provides on-line mini-lectures that can be used for individualized learning. Each student can achieve mastery of each topic rather than everyone moving at the same pace in an “industrial” classroom.
  7. 7. Cost/Quality Experience Illustration by Loulou & Tummie Sysco, known for industrial food, is testing the provision of locally- grown organic produce to the U of Michigan. IT fuels all these projects.
  8. 8. Inspirirani ljudima. IC (intangible capital)
  9. 9. Tangible Intangible Fedex owns huge numbers of tangible assets but the essence (and value) of the company comes from intangibles like people, processes, data, partnerships, brand and culture.
  10. 10. Scarcity Abundance One of the most exciting thing about intangibles like software, data and knowledge is that they are not subject to the economic laws of scarcity—which is how a company like WhatsApp can build an app that attracts 450 million users with just 55 employees and earn a $19 billion price from Facebook.
  11. 11. Accounting ICounting WhatsApp also illustrates a key challenge with intangibles: how to measure them. We advocate a new approach to complement accounting that identifies financial potential based on how well a company creates value for its stakeholders.
  12. 12. Inspirirani ljudima. Innovation
  13. 13. Top-down Bottom-up/Outside-in Innovation is important to business because the shift to the social/knowledge era requires a constant flow of information and learning in all directions. The answers rarely reside just at the top.
  14. 14. Strategy Innovation Innovation is the knowledge-era complement to traditional, top-down strategy. It creates an environment where new strategies and solutions emerge.
  15. 15. Control Collaboration Amazon’s marketplace shows how collaboration with other vendors creates much more value (for customers, partners and for Amazon) than keeping their network closed.
  16. 16. Inspirirani ljudima. Toolkit
  17. 17. Chief Innovation Officer study Main areas of CIO focus (process) Strengthening innovation processes Developing research capabilities Greatest CIO challenges (ecosystem) Getting the right people and partnerships Obtaining funding for initiatives Making the corporate culture more innovative This survey by my firm of 25 Chief Innovation Officers in the U.S. demonstrated the need for understanding the IC components of the innovation ecosystem.
  18. 18. Innovation process Idea Generation Selection Development Commercialize A process like this simple one can be very helpful to encourage and manage innovation.
  19. 19. Innovation ecosystem IC But as the study showed, successful innovation also needs to cultivate a healthy intangible capital ecosystem.
  20. 20. Measuring IC ecosystem strength ICounting measures the strength of the intangible capital that makes up the ecosystem connecting IT and innovation.
  21. 21. Inspirirani ljudima. Challenges/Opportunities
  22. 22. The industrial model is not sustainable Industrialization is losing its power as a management approach. It guides us to do the wrong things in the wrong ways. We must keep the strengths of the past but create new strengths and capacities.
  23. 23. Luckily, innovation thrives on constraints Aravind shows us that new constraints can be a powerful driver of innovation. Their focus on cataracts as a leading cause of blindness in India has enabled them to provide surgeries for $20 that cost up to $5,000 in the U.S. Constraints are our friends
  24. 24. Constraints • Poverty • Jobs • Pollution • Waste • Energy use • Health • Education The Opportunity Making everyday life happier, healthier and more productive—how will you help?
  25. 25. Inspirirani ljudima. IT + IC = Innovation What’s your innovation equation?
  26. 26. Questions? Mary Adams 781-729-9650