IT's Star Turn

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Where is IT in the innovation conversation? With IT being so essential to the innovation equation, and with so much riding on the IT department's ability to build and maintain the systems that will drive customer delight, you'd think there would be more talk about the role of IT in innovation strategy.

But let me ask, how engaged are chief information officers in innovation initiatives? Are members of your IT department full-time members of innovation project teams? Or do they exhibit a "call me when you need me" approach? Or worse still, a "Put your request in the queue, I'll get to it when I can" attitude?

Based on my research, the majority of IT departments sit on the sidelines of innovation discussions when they should be central players. Systems consultants as well as corporate representatives say that, typically, IT departments are tactical rather than strategic, reactive rather that proactive, and isolated rather than integrated. Few in the IT ranks speak "business model," which is unfortunate given that so much customer and shareholder value is dependent on IT solutions to facilitate critical network connections.

Is the chief executive accountable for this predicament? Or the CIO or human resources? It doesn't really matter, as long as it's corrected. The situation is reminiscent of the drive toward fast cycle times in new product development in the early '90s, when marketing and engineering functions had to emerge from their silos and learn how to work together in parallel. That change was driven by senior management who demanded both speed and quality.

Rethinking the equation

Whether you are a product company, a service company, or somewhere in between, IT is central to your innovation success. This idea has never been more important than now due to a variety of factors. Systems-centric disruptive technologies abound. On-demand availability of software and storage is relatively cheap by comparison with yesterday's capital intensive tools, allowing average entrepreneurs to build complex business solutions large companies can't even dream of. Demand for user-friendly solutions has never been higher. Current examples like the iPhone show us that user experience nirvana is possible—and we want it, now!

Savvy companies like Medtronic, Zipcar, and IBM (IBM) that have come of age in the past decade or have instituted major systems overhauls are doing well in their sectors because they have put IT at the core of their operations. By comparison, many old-line companies are struggling with legacy know-how and systems that impede their ability to act quickly, much less provide direction and leadership for the innovation leaders who are so dependent on them. This is an acute problem; many corporate innovation executives I know no longer consult their IT departments. Despite the risk of exposing new business strategies to potentially untrustworthy third parties during the "fuzzy front end" stage, they simply go outside. "You get tired of hearing, 'no, we can't do that' all the time," said one practitioner at a Peer Insight forum recently.

In order to support the robust innovation pipelines that many corporations aim to build, we have to rethink how we integrate IT into our organizations, particularly as it relates to driving innovation. Start with the IT leadership team, where more executive bench strength will be needed. IT managers should be well-versed on managing cross-functional initiatives, and should understand the company's business end-to-end. These managers will need to guide innovation teams in regular technology road mapping and system architecting sessions. Interaction design and rapid prototyping of customer touchpoints will be the standard, not the exception. Iteration and user testing of new software concepts will be a core capability. Likewise, IT must be engaged and mentored by business managers as the opportunities to learn and collaborate go both ways.

More IT resources required? You bet. Getting to world class in this domain is worth the cost. But better strategy and prioritization would also help in making current budget dollars stretch to accommodate the types of organizational development matters outlined here.

Cultivating an IT capability that can meet the challenges thrown at it by your newly developed innovation capability can be difficult given today's environment. Suffice it to say, these two capabilities will be inextricably linked for the foreseeable future.

Rae is the co-founder and president of Peer Insight, a research and advisory firm focused on service innovation and customer-experience design for S&P 500 firms. When not researching, consulting, or writing, she teaches executives in client companies and MBAs at Georgetown University's McDonough School of Business how to structure and manage innovation.