This document discusses how combining information technology (IT) and intangible capital (IC) can fuel innovation. It provides examples of how IT has enabled innovation in industries like transportation and food provision. The value of companies increasingly comes from intangible assets like brands, data, and culture rather than physical assets. Nurturing an innovative culture requires bottom-up collaboration beyond top-down strategies. Constraints can also drive innovative solutions, as demonstrated by Aravind which provides low-cost eye surgeries using India's poverty and health challenges.

1. IT + IC = Innovation
Mary Adams, Founder

2. This project re-built 14 bridges during
10 summer weekends and shows the
potential for innovation even in
traditional industries.

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. Inspirirani ljudima.
IT (information technology)

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. 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. 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. Inspirirani ljudima.
IC (intangible capital)

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. 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. 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. Inspirirani ljudima.
Innovation

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. Strategy Innovation
Innovation is the knowledge-era
complement to traditional, top-down
strategy. It creates an environment
where new strategies and solutions
emerge.

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. Inspirirani ljudima.
Toolkit

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. Innovation process
Idea Generation Selection Development Commercialize
A process like this simple one can be
very helpful to encourage and
manage innovation.

19. Innovation ecosystem
IC
But as the study showed, successful
innovation also needs to cultivate a
healthy intangible capital ecosystem.

20. Measuring IC ecosystem strength
ICounting measures the strength of
the intangible capital that makes up
the ecosystem connecting IT and
innovation.

21. Inspirirani ljudima.
Challenges/Opportunities

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. 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. Constraints
• Poverty
• Jobs
• Pollution
• Waste
• Energy use
• Health
• Education
The Opportunity
Making everyday life
happier, healthier and
more productive—how
will you help?

25. Inspirirani ljudima.
IT + IC = Innovation
What’s your
innovation
equation?

26. Questions?
www.smarter-companies.com
Mary Adams 781-729-9650
adams@smarter-companies.com