The CIO as innovation czar

Computerworld - Many CEOs today are asking CIOs to play a bigger role in innovation and enterprise integration. In this month's Harvard Business Review, James I. Cash Jr., retired senior associate dean at Harvard Business School, and co-authors Michael J. Earl and Robert Morison discuss how that shift is playing out in 24 major corporations. Cash, temporarily sidelined by oral surgery, explained these new IT roles to Kathleen Melymuka via e-mail.

Why is the CIO's role shifting? The change is based more on the capabilities of specific individuals than something inherent in an IT organization in a large company. For broad-based individuals that have used their time as CIO to demonstrate an ability to think and act systemically and in an integrative manner across the entire enterprise, companies have asked them to take on additional responsibility. The primary drivers of this trend are the need for the enterprise to pursue growth and innovation initiatives in addition to the intense focus on productivity/efficiency/compliance during the first half of the decade.

You write that two key groups leverage technology. The first is a distributed innovation group (DIG). What is that? This group only gets established if the company has committed to a belief that the source of creativity is more likely to occur outside the company boundaries than inside. This group is established to facilitate collecting, evaluating, monitoring and, in some cases, providing initial funding for the idea.

How does it work? DIG scouts for new ideas and untapped potential in current technologies, scans the external environment for emerging technology, facilitates participation in idea forums, acts as a center of expertise for support of innovation and creativity, communicates and publicizes promising ideas, and provides initial funding and scarce specialized skills that may be required for the early evaluation/testing of the idea. DIG does not act like a dedicated R&D group, have exclusive responsibility for all phases of the innovation process, or sit in an office developing policy and anointing winners in the fine tradition of many staff functions.

The second team is the enterprise integration group (EIG). What is that? A group responsible for transforming the corporation into an efficient participant in an industry ecosystem, primarily as a result of an external and internal business process redesign. An "outside-in" perspective on this work distinguishes this group from pure process improvement work. The key measures for this work focus on breakthrough business integration projects that radically improve the organization's performance in the eyes of customers or key suppliers. This may lead to a change in the traditional business model.

What does the EIG do? It's responsible for enterprisewide business process management and improvement. [It] manages the corporate portfolio of integration initiatives, serves as center of excellence for skills required in process improvement and is responsible for new ideas on future-oriented enterprise architecture. It frequently has a major education and training responsibility.

What can it accomplish? Gary Reiner's Corporate Initiatives Group at GE was responsible for companywide implementation of Six Sigma and Lean, which eventually provided the foundation for outside-in projects that reduced lead-time for customer financing decisions from 63 days to "same-day" [financing].

What can a CIO do in his own company? Collect data and examples of how these changes have benefited other companies and sell the idea to your executive suite. Do not accept responsibility for managing the cultural change required; that belongs to the CEO or COO. (Exception: If you become the COO, then it's your responsibility.) But quickly accept the responsibility to implement these groups in support of the new approach to growth and innovation.

This version of this interview originally appeared in Computerworld's print edition.