IT innovation -- once a nice-to-have -- is now considered a necessity for gaining competitive edge. With globalization, changing customer behavior, the spread of consumer technologies and cloud capabilities lowering the barrier of entry to new competitors, organizations are increasingly looking to technology-induced innovations to distinguish themselves in the market.
But we're not talking about one-off great ideas, says Chip Gliedman, an analyst at Forrester Research. "Companies need to instill processes, governance and incentives to support a continuously sustained innovation program," he says. Otherwise, it's all too easy to revert to day-to-day operational concerns and avoid the risk of failure that is a faithful companion to creative pursuits.
There is no one-size-fits-all approach to jump-starting an innovation program. Some organizations, like CapitalOne and MasterCard, create "digital labs" to foster new ideas and bring them to fruition. Others, such as the American Cancer Society, form steering committees to guide smaller core groups. Still others, like Grange Insurance, take a skunk works approach, while organizations like Equinix choose a decentralized model of innovation.
We spoke with those five organizations to find out how they are building their futures on innovation.
Where do you position the innovation group, organizationally?
• Equinix: Innovation at this global data center provider happens in pockets around the company, with support from top leadership. "Instead of centralizing innovation or having a badged team, we have smart engineers, applying a concentrated effort to real business opportunities," says CIO Brian Lillie. Small teams periodically submit ideas and, when approved, are given resources to pursue innovations. A challenge of this approach is freeing people from day-to-day work. "We have to be clear in our minds that we're putting our best engineers on our best opportunities, not our biggest problems, and we don't hammer them when they drop the ball on something else while they're innovating," Lillie says.
• American Cancer Society: At the nonprofit health organization, a cross-functional steering committee sets the rules of engagement for innovation and provides executive-level "air cover," as well as support, motivation and engagement, says CIO Jay Ferro. Meanwhile, a core innovation team works at an operational level. All employees are invited to submit ideas through an innovation management platform, and the core team manages the entire process, from submission through approval. "With 12 divisions and hundreds of locations around the world, it was important to approach the ideation process in a unified way rather than having different sets of ideas aimed at different goals," Ferro says.
• CapitalOne: The financial services company set up three innovation labs in New York, the Washington, D.C., area and San Francisco, all intentionally placed in the middle of technologically innovative cultures, according to CTO Monique Shivanandan. "We combine technology people, data analysts, marketing people, brand managers and product managers in the labs to be sure we're focused not just on cool technology but innovative products and services to delight the customer," Shivanandan says. She points out that the emphasis of the innovation lab approach is more about establishing an innovation "ecosystem" than it is about setting up a physical facility.
"You could get a conference room, put a paper sign up and designate it as 'the lab,' and you'll have a structure in place," she says. "Even with just a handful of people, you can foster a culture of creativity, as long as they're not operating in a vacuum but with the right folks across and outside of the business, to drive results that are valuable to the business and its customers."
• MasterCard: The payment industry giant formed MasterCard Labs in 2010 as a global R&D arm focused on developing innovative payment solutions. Labs are located in New York, St. Louis, Dublin and Singapore. Additionally, MasterCard Labs works closely with business owners to spread the innovative spirit across the company, says Garry Lyons, chief innovation officer.
• Grange Insurance: A core group of business and technology professionals meets monthly at the $1.3 billion insurer to brainstorm opportunities to move the business forward with new technology and then uses agile practices to explore the feasibility of ideas and bring them to fruition.