The Art and Science of Innovation
Author(s): VFTE Editor, Posted on November 5th, 2014
In this session of Views from the Edge, we caught up with Andrew Harsch, Director of Product and Portfolio Management at Unisys, discusses innovation and how Unisys assist clients in this area.
Editor: Everyone wants their service provider to “innovate.” But very few say they get it. Why is innovation so difficult?
Harsch: This is probably due to the fact that most people do not really know what innovation is and what they have been asking for is more in the areas of process improvement and cost optimization.
Innovation is about stepping out of the norm and taking risk, and most IT leaders have been looking at how to reduce costs vs how to fund a new business. To really drive innovation they would have to think more like a VC, what new area are we going to invest in, build the business case and invest the necessary time, money and people to create something new.
If you look at companies that have radically changed an industry by new innovation, it was usually a significant change to the existing model. Southwest to the airline industry, Apple to smartphones, Amazon to retail, Tesla to automobiles. They changed not only the business model, but the expectations of the users.
Editor: How do you define innovation?
Harsch: Innovation is about stepping out of your comfort zone and looking at new ways to accomplish a task. It can really be that simple. Optimization is going to look for a 5, 10, 20% improvement in the way you are currently doing things. Innovation is about doing something completely different. And this is where it gets uncomfortable for IT leaders. If they do not understand it, this new idea, how can we feel comfortable putting 5 of our best people and a million dollars behind it? The risk aversion gene kicks in and the idea dies………but then they complain that there is no innovation.
Look at another source of innovation, university or enterprise research (R&D). Millions of dollars are spent just thinking and looking for new ideas. Some may be in areas that are already established lines of businesses; others can be a completely new market. Remember the old 3M post it notes story, a product is derived from the failed experiment. How many IT departments have a sunk cost R&D budget and culture that they are willing to support?
Innovation is about culture. You can’t just add a bullet point to a PowerPoint chart and say we are going to do more innovation this year, or increase our innovation by 20%. Innovation is about breaking the rules, thinking different, going against the norm. If you don’t have a culture that supports this, and this can be just at a department level, then it will send signals that it really isn’t important; it was just another new year’s resolution and corporate fad.
Editor: What kinds of innovation do the buyers want? Do they differ from what you want?
Harsch: In general it would probably be a safe bet that most customers don’t know what they want in terms of specifics, but they know they want something and that is the first step. It is really tough to think about innovation and really new ideas when you spend 60 or more hours a week just trying to stay afloat. This is why partnering with a service provider and incorporating out tasking as well as complete outsourcing is a really good idea. We don’t know all the ins and outs of say the retail, coffee or insurance business. But we are really good at IT and that allows us and our clients to take advantage of that expertise so we can allow them to apply their IT skills to their unique businesses.
It is no longer about can you do my mess for less, how can you help me improve the operation of my business? What skills do you bring to augment and enhance my team?
If we compare IT to a factory, in the past the large cost reductions involved just closing an old underperforming plant or product line or just we need to reduce output, so close several plants. That gets you a macro reduction in costs. So now what do you do with the factory you currently have? How do you get the most out this investment; past, present and future? How do you get the most out of the people, out of the processes? This is a great capital asset that you don’t want to go to waste. So how do you find the creative thinkers? The opportunities for automation to increase speed, quality and lower cost. How many processes have been in place for more than 3 years and is it time to rethink them.
Innovation and cost cutting are really diametric and opposing forces. If you put out a mandate that you want new ideas and innovation to further reduce costs 20%, well you are just looking to tighten the belt some more and probably make painful cuts to already thin services, and people. If you are looking to innovate, you have to send a different message.
What do we want? We want challenges. To work with clients as partners and to go out and do new and great things. Taking something as established as a service desk and create a completely new customer experience, to make it more like retail than IT. To take advantage of all the technological change occurring in terms of mobility, apps, cloud and data and be able to internalize and digest this to increase their competitiveness and success.
Editor: What do clients do to help or hinder the changes you want to make that lead to innovation?
Harsch: Most likely it is that management is trying to lead and do all the innovating. To really innovate, you probably need to push that down and get the people involved who are doing the day to day work. Ask them for new ideas on how to do things better. Who best to look at their job and find ways to get faster, cheaper or come up with a completely new idea? Probably those folks who are talking to the customers all day long, hearing the issues they face, seeing the trends.
Editor: What can service providers do to make it easier to innovate?
Harsch: The two main things that we can provide is a way to extract some of the waste out of the current systems and processes to allow an organization to invest that time and money back into the business.
Let’s look at that first part which can create the internal funding. If we can free up say 3 FTEs and $1M, what would you do with it? Take it directly to the bottom line and claim victory or invest that directly back into the business. Move those FTEs into a more challenging role to free up then three of your more senior people and then use the money as seed money. Tell them to think, talk, and come back with 4 new ideas that you will invest $250K each to. Challenge them to create the full business plan and see what you come up with. Take a page from the world class business plan competitions that several of the top universities such as Rice hold each year and create that framework internally.
The second part is to bring an outside source and expertise around innovation with an establish process. We can this process CSIIP or Continuous Service Improvement & Innovation Program.
This is unique in that this is delivered from your service provider, however with a world class innovation methodology. Customers can then choose to utilize it to come up with better ideas around the way they do things today, the process innovation previously discussed and a great place to start and then can move to the next step on how to break the mold and come up with new services, business ideas ( which need IT support) etc.
By working with their service provider partner, we can not only take the outside perspective to challenge the organization to stretch their thinking, while as a partner, we can be there to assist them into turning it into reality. We understand not only their business and also the business of IT and can immediately move to an implementation and transition plan to ensure this is not just a once a year brainstorming session. How many of those have you experienced and can you recall a single idea or business plan that came out of any of those.