Deloitte The ‘Ten Types of Innovation’ for CIOs

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Published on The Wall Street Journal – CIO Journal

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Deloitte The ‘Ten Types of Innovation’ for CIOs

  1. 1. CONTENT FROM OUR SPONSOR Please note: The Wall Street Journal News Department was not involved in the creation of the content below. Deloitte Deloitte Insights Video Distinguishing PC Usage Reality from Rhetoric Larger screens and keyboards and more processing power haven’t translated into stronger sales growth for PCs relative to tablets and smartphones lately. But that doesn’t mean people have abandoned their PCs. In fact, they’re still using them a lot, for both work and leisure. What LTE Networks Mean for Users
  2. 2. Wireless operators are rolling out LTE mobile networks, and device manufacturers are offering compatible smartphones and tablets. For users, it’s evolution, not revolution. Expect higher speeds that make it faster to send or download large attachments, like photos or video. Also look out for new offers from operators designed to relieve the limitations of capped data plans. Set the Right Expectations for Enterprise Social Networks By now, most CIOs probably realize that “build it and they will come” doesn’t apply to enterprise social networks. There appears to be a natural ceiling on the number of users who will actively participate; however, these networks are typically still worth the modest investment they require. To promote widespread participation, networks will need to be integrated into everyday workflows and processes. Related Deloitte Insights What CIOs Can Learn from Venture Capitalists Many of the customer-facing applications CPG and retail companies now deploy are being developed by startups, prompting some companies to fund these startups directly or set up their own incubation labs. CIOs can use this opportunity to redefine their traditional role, and take the lead in sourcing the innovation being fueled by these external incubators. Augmented Reality in Government Imagine threat profiles of individual passengers appearing, as if by magic, in the vision fields of airport security agents wearing Google Glass. This scenario may sound like science fiction, but in the near future augmented reality technologies could, indeed, transform the way government employees engage with citizens and one another. But first, public sector CIOs may need to boost agency analytics and data management capabilities. 3D Printing: Data, Data Everywhere Press a button and a fully formed pair of shoes emerges from a “printer.” The 3D printing technologies that make this possible are poised to transform manufacturing companies. Yet the demands they place on IT could be significant. CIOs will be called upon to The ‘Ten Types of Innovation’ for CIOs The “Ten Types of Innovation” offers CIOs (and other executives) a structured framework for understanding and pursuing innovation in ways that add real value for their organizations. Despite lingering uncertainty over the state of the U.S. and global economies, many U.S.based businesses have shifted their strategies from cost-cutting to growth. Their renewed focus on expansion has led them to turn their attention to innovation. In fact, the number of companies that discussed innovation during their third quarter 2013 earnings conference calls jumped to 197 from 99 during the same quarter of 2007, according to The Wall Street Journal.
  3. 3. “In the post-Steve Jobs world, good leaders are starting to ask, ‘What’s our innovation agenda?’” says Larry Keeley, a director with Doblin, the innovation practice of Monitor Deloitte within Deloitte Consulting LLP. “It’s rare to find CEOs these days who don’t count innovation among their top 10 priorities and, frequently, among the top three.” Brian Quinn, a principal with Doblin, says innovation plays a more significant role in many companies’ corporate strategies these days due to the accelerating pace of technology-driven change and the exhaustion of other value creation moves. “Optimization, for example, no longer provides step-change growth for companies that have already focused on efficiency improvements, and success with mergers and acquisitions is far from guaranteed,” he notes. “That creates a push for organic growth, and innovation is one of the best disciplines for driving it.” Yet according to Keeley, who co-founded innovation consultancy Doblin, the drum beat surrounding innovation leads to a significant problem: Most companies struggle to define and execute innovation strategies, so how can they realistically count on innovation for growth? “We realize most innovations fail, and we want to change that,” says Keeley. To that end, Doblin created the Ten Types of Innovation™ framework to help companies practice the discipline of innovation. The ten types of innovation include: • profit model (how companies make money) • network (how they connect with others to create value) • structure (how organizations align their talent and assets) • process (how they use signature or superior methods to deliver their offerings) • product performance (how they employ distinguishing features and functionality) • product system (how they create complementary products and services) • service (how they support and enhance the value of their offerings) • channel (how they deliver offerings to customers and users) • brand (how companies represent their offerings and business) • customer engagement (how they foster distinctive interactions) Doblin’s goal with the “Ten Types” framework is to provide an approach that demystifies the process of innovation and makes it easier, less risky, and more reliable and replicable. To help companies get started, Keeley, Quinn, and others published a new book by the same name that provides practical insights and multiple case studies. Inspired by Software Development Keeley says object-oriented programming inspired the creation of the “Ten Types” framework. Doblin sought to make innovation easier for organizations by “modularizing” the process in the same way that object-oriented programming modularized software development. In object-oriented programming, developers create, use, and reuse “objects,” or modules such as data, files, and other common computing elements, to make the process of developing software more efficient and repeatable. While studying the characteristics of successful innovations, Doblin researchers discovered the 10 distinct types of innovation that form the basis of their framework. Organizations can carefully integrate multiple types to produce one game-changing innovation. From the 10 types, Doblin identified more than 100 innovation tactics—modular ways to achieve each type of innovation—as well as ways to combine the 10 types into stronger, more sophisticated innovations that are harder for competitors to copy because they’re so differentiated. The tactics and combinations are analogous to the elements of objectoriented programming and, taken together, they essentially form a playbook for innovation. Ryan Pikkel, a specialist leader with Doblin, and co-author of the “Ten Types of Innovation” with Keeley and Quinn, says the framework helps to bring structure and discipline to an activity that many organizations have long treated as a mysterious art. “By identifying and modularizing proven types of innovation and ways to innovate, the framework may lead to better outcomes, while lowering the costs and risks associated with bold innovation,” he says.
  4. 4. And by removing some of the risk, the authors hope more executives, including CIOs, will embrace innovation. The CIO’s Role in Innovation Because innovation in many industries is tied up with technological advances, CEOs are increasingly asking their CIOs to help with enterprisewide innovation efforts, according to Keeley. As technology stewards and strategists, CIOs are poised to understand the practical implications of emerging hardware and software and ways their companies could harness them to innovate. “The better CIOs are often quasi-futurists: They have some sense of what’s coming around the corner,” says Keeley. “That’s still a relatively rare skill for CIOs, but they are increasingly expected to have it.” The role of visionary or “quasi-futurist” contrasts with the role some CIOs have traditionally played in innovation. Quinn says CIOs with whom he’s worked have frequently served as either “sounding boards,” providing feedback to innovation teams regarding the company’s ability to deliver a proposed innovation, or “administrators” who put in place the systems that manage the innovation pipeline and portfolio. “We need CIOs to tell us if we’re inventing science fiction, and companies need systems that help them understand the range of innovation initiatives an enterprise is either contemplating or actively pursuing,” says Quinn. Both of the roles Quinn describes remain essential, but, he adds, they don’t position the CIO to serve as an agent for innovation and growth. “CIOs need to help their companies identify what’s next.” Adds Pikkel: “We hope the ‘Ten Types of Innovation’ gives CIOs a sense of how they can approach the discipline and think more systematically about the types they can—and should—influence and create.”

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