Consider the following scenario: A prospective customer walks into your store to buy an air conditioner. He evaluates several models and then buys one - but not from you.
Innovation / Case studies
If you want to understand the key driver of the cloud computing revolution, you owe it to yourself to read Microsoft's new white paper The Economics of the Cloud. In it, authors Rolf Harms and Michael Yamartino lay out an analysis of the economics that underlie cloud computing, and demonstrate in a convincing fashion why the shift to this new technology platform is inevitable. A copy of the paper is available as a download from the blog posting by the authors.
After a brief introduction, the authors lay out a central thesis: despite initial concerns about shortcomings in new technology offerings, "historically, underlying economics have a much stronger impact on the direction and speed of disruptions, as technological challenges are resolved or overcome through the rapid innovation we've grown accustomed to."
For too long now innovation has been viewed as a black art. Business journals, such as Business Week and Fortune, that regularly publish their lists of the most innovative companies, select top performers based on surveys of CEO/business executives, not hard data of performances.
Similarly, few managers have the required metrics to make informed decisions about their innovation programs. Therefore, managers of all types, and IT managers especially (since they are often out of the strategy decision-making loop), have only a vague sense of the innovativeness of their company and their department; they have little or no means to assess the effectiveness and efficiency of a particular innovation program. Over the last decade, however, many organisations and their IT departments, have successfully implemented enterprise-wide as well as localised innovation programs. Along with their successes, and some pioneers' failures, we now have a more thorough understanding of what and how to measure an organisation's innovation program.
It would be unusual to find a C-level executive who does not have at least a glancing admiration for companies such as Apple, Google, Amazon or Intel. All are highly successful and known for their innovative cultures.
However, many organisations often act unwittingly in extinguishing the flame of creativity. Despite this, even in organisations better known as followers than leaders, it is possible for individual managers to create a fertile ideas factory within their sphere of influence. Ideas are like seeds that need fertile soil, ultra-violet light and sufficient irrigation to permit germination. Good ideas won't thrive in a hostile environment. Yet the culture in many organisations repudiates good ideas:
A recent corporate study revealed that companies are in a dilemma on how to remain competitive by innovating while at the same time focusing on running the business. At the heart of this dilemma, which the study referred to as the "innovation gridlock", is, as expected, cost.
The study, commissioned by HP and done by Coleman Parkes Research, showed that one out of every two business executives felt that their organisation suffered from innovation gridlock.
Sonya Crosby, managing director of Auckland-based research company Datamine, can explain much of what her company does with a simple diagram. She draws a generic sales graph on a sheet of paper and circles the bottom end, where the curve pinches down on the axis.
"These people are costing you the same amount in marketing dollars as these people [at the top end], but they're spending nothing."
A research paper on New Zealand’s innovation performance from 1998 to 2008 reveals that while some industry sectors have performed reasonably well; the country’s overall rate of innovation has remained virtually flat for nearly a decade.
The report, Innovation Index of New Zealand, reveals that after rising by 13 percent between 1998 and 2000, the whole-of-economy index was flat for the next seven years.
At least 22 retailers in the US have been driven into bankruptcy protection during this recession, including RedEnvelope and Eddie Bauer, or gone out of business altogether, like Circuit City. Blockbuster, Virgin Megastores and many more have closed stores. Survivors, suffering deflated profits and slow sales, warn of bleak holidays: The National Retail Federation predicts a 1 percent sales decline for the season compared to last year. Even Wal-Mart feels the slump, with same-store sales down 1 percent in its second quarter—its first such drop in years.
But smart retailers are going where it's warm: the hot little hands of cellphone—and laptop—toting consumers who want to shop right now, wherever they happen to be sipping their lattes or watching their kids' soccer games. Technology-backed projects to increase revenue include mobile e-commerce, coupons by text message, even storefronts on social networks. As enablers of these projects, CIOs are moving ever closer to the customer.
Innovation is an important adjunct of a competitive market position; indeed it could be seen as necessary to effective competition. If you compete merely by doing what has been done before, then almost by definition you are catching up.
To take a truly novel step, something that offers the customer a facility they cannot get from any competitor, is a powerful and longer-lasting competitive weapon.
The boss of the latest no-frills carrier to tackle the Australian aviation market insists she has the correct flight plan.
History suggests Tiger Airways Australia boss Shelley Roberts has the odds stacked against her. Traditionally those who've tried to move in on Australia's cosy domestic aviation market, dominated by incumbent Qantas, have crashed and burned. In the contrails are the failures of the likes of Compass, Ansett and Impulse. Yet the backers of Singapore-based parent Tiger Airways hired the 34-year-old former Macquarie Airports executive to do exactly that.
There are two ways to approach the time when the economy turns around from its current slowdown, says Jim Davis, senior vice president and chief marketing officer of SAS.
The first is to wait for the recession to end and then do business as usual. The second is to use this opportunity to retool the organisation and acknowledge the fact that “when we emerge from this current downturn, the world will be different. There is no going back to normal”.
Uncertainty is the defining characteristic of any boxing match. It is also the defining characteristic of business competition today. As they fight their way through the current global turbulence, business leaders can learn much from two distinct approaches to mastering the uncertainty of the ring: Agility and absorption. Companies can employ agility to spot and exploit changes in the market. Alternatively, they can rely on their powers of absorption to withstand market shifts. In unstable times cultivating and using both capabilities in combination can help companies not only survive, but emerge as true market leaders.
Scientists and technicians can be an ornery bunch. Heads bent over arcane machines or swirling solutions in test tubes, they are not easily impressed by the management fads of the "suits" who come and go over the years that it takes to turn an idea into a winning product.
But when the board of 3M hired its first outsider as chief executive in 2000, it was a revolutionary change for the 100-year-old company.
Caesar Augustus chastised generals who rushed into battle: Festina lente! (Make haste slowly!). In these confounding days, with banks collapsing around us, global markets spinning into oblivion and the shadow of greed darkening the promise of capitalism, this admonition is good advice in such times. Translated into the realm of enterprise IT management, Caesar Augustus is telling us to hold up on projects, IT spending and staffing decisions, determine how far ahead we can see, avoid knee-jerk reactions and take stock of what we have. Acting too quickly without sufficient rationale, may expend precious resources in the wrong direction and thus inhibit our ability to react when needed.
Even though some organisations will feel greater impact from the tightening economy than others will, this is a good time for all to assess IT spending choices. By continuing to invest wisely during a downturn, an organisation strengthens its long-term future. Thanks to virtualisation technology and outsourcing, there are some obvious ‘easy wins’ in the datacentre. Collaboration technologies make it easier to be productive without being co-located. Deep within the IT infrastructure, costs can be contained by reducing the number of moving parts and redundancies. In addition, as people and partners move into, out of and within an organisation with greater frequency, well-designed identity management and other security controls for the virtual enterprise add considerable value.
In the continuing quest for business growth, CEOs are turning to their CIOs and IT organisations, because technology is essential to two compelling sources of growth: Innovation and integration.
Innovation, of course, is doing new things that customers ultimately appreciate and value, not only developing new generations of products, services, channels and customer experience, but also conceiving new business processes and models.
Innovation is mandatory in today's ultracompetitive corporate landscape, especially for a tech giant like Microsoft. As CIO of Microsoft,Tony Scott must create a culture that encourages experimentation andinnovation while simultaneously creating clear guidelines about which creative ideas are worth pursuing. That the company is filled with talented technology professionals makes balancing those two forces-freedom and control-even more difficult. CIO.com's Editor in Chief Brian Carlson sat down with Scott to hear how the CIO tackles such challenges, whether Microsoft uses open-source tools, and why he advocates for internal customers.
CIO Asia: What would you say are key attributes of an innovative enterprise leader? What's different about an innovative leader's management style?
Gerry Davis: Innovative leaders seek insight and first mover advantage through the development and application of new ideas, and improved processes. They are also gifted communicators, not just in getting their message out, but in soliciting and acting on feedback from employees and clients. They also have a clear vision to guide their company's direction; they are therefore able to accommodate storms and reduced visibility by continuing to focus on their strategic direction and goals.
Four years ago, Thorkil Sonne realised his young autistic son possessed an extraordinary memory and a remarkable eye for detail. Those traits are prevalent among people with autism and Sonne saw an opportunity to help individuals with the disorder find productive employment. As the technical director of a Danish software venture, he knew those qualities were critical in software testers. So he launched Specialisterne (Danish for “The Specialists”), a Copenhagen-based software-testing firm that now has 51 employees, including 37 with autism, and revenues of US$2 million.
Q: You started your company to improve the lives of people with autism. Why not just create a nonprofit focused on research or job training?
High-performing organisations must look beyond power silos to foster fresh perspectives, shared ideas and leadership inside and outside the workplace. Organisations face an entirely new environment for innovation and getting things done. The days of the lone genius quietly toiling away in pursuit of that "eureka" moment are all but over. Today, we must listen to our customers and work with them in our innovation cycles.
Innovation demands collaboration, but collaboration is a rarely taught skill. In addition, an organisation's ability to support collaboration is dependent on its culture. Some cultures foster collaboration while others stop it dead.
All sorts of ideas looking for funding cross the desks of the nation's chief financial officers. Often, these are in conjunction with a slogan along the lines of "creating an innovative organisation". The accepted wisdom is that new ideas are the lifeblood of any entity, but where to start, and more importantly, how much will it cost?
The problem with innovation is that many business leaders think it is all about big ideas. And with the much-vaunted federal government 2020 summit stealing the limelight, it would be easy to think there's time to spare to come up with plenty. After all, aren't we in a decade-long boom?