There are two things that always seem to be in great demand within corporations: becoming more innovative and agile. There is an ever-increasing desire of corporate managers to make their ‘elephant’ organizations dance. In corporations around the world, business executives now speak of the need for ‘innovation’ and ‘agility’ for them to win in the marketplace.

Even companies with a solid history of developing new products feel under pressure to show they are capable of innovating at a rapid pace. Take Procter & Gamble, which in a recent statement following a soft financial quarter talked about : ‘increasing our agility, improving cost efficiencies, improving our speed to market and relentlessly focusing on innovation in every part of our business. ‘  Perhaps this widespread urgency can be chalked up to the previous demise of Kodak, preceded by Borders, and Blockbuster, and subsequent failures at Nokia, RIM and many others. Business leaders are racing to ensure they do not get caught in a digital wave, tumble about, and lose in their marketplace.

But applying the latest management technique is a bit like going on a fad diet. It may yield short-term improvements, but it likely won’t deliver a sustainable advantage. It is far better for organizations to focus on more substantive approaches. Here we map out how business and IT management can respond effectively to the urgent desire to increase agility and innovation — especially given IT can be a major contributor and help step into the breach.

Let’s start with ‘agility’. It is often viewed as the antidote to ‘bureaucracy’ or slowness to market. The latest agility technique is the ‘standing meeting’, a surefire way to eliminate bureaucracy within your organization, become agile, and improve your time-to-market. Agile originated as an excellent software development methodology. There are terrific project practices that can and should be leveraged from the Agile methodology including an ‘incremental’ or continuous delivery stream, very tight, even daily, turnarounds and deliverables with tight feedback loops. Rather than make the leap to apply agile project practices to how the business is run, instead use agile judiciously. From my experience, agile methods are best utilized when:

• requirements, particularly user interfaces, are not well-defined or likely to be fluid
• rapid turnaround provides significant market advantage
• incremental delivery is desired (versus one major release or rollout)
• improving and changing the business process will be done in tandem with the systems development
• and most importantly, the business analysts and product owners are part of the ‘agile’ team – and everyone is focused on making the customer journey better

I think a good ratio for the typical corporate IT shop is where nearly all of your ‘interface’ projects are leveraging agile project approaches and your core systems projects are run in an iterative and highly disciplined to ensure highest queslity. But remember: agile is a build methodology, not a run methodology. Apply a mix of lean, continuous process improvement, and CMMI approaches to your run functions. Treat these run activities or operational areas as the factory that they are (or should be). Successful run approaches emphasize service definition, clear metrics and accountability, effective root cause, and incremental process improvements.

An area where companies can easily improve agility and time to market is management processes – and a perfect example is approvals. If you pull the cycle time for just about any routine company transaction (paying expenses, provisioning new servers, starting a new project etc.), you’ll find that management approvals take up 25% to even 40% or 50% of the total time. Why? Because most companies have myriad approval processes, all done differently, many with manual or cumbersome interfaces and incomplete information. Further, it’s easy for managers to say no, or instead require everyone to say before moving forward. This lack of risk-taking or clear accountability where a manager can easily take action in his/her area often contributes most to the corporate slowness. I have seen approval times on a new projects take up 25-50% of the total time to get the project delivered. Have clear criteria for approval (e.g. ROIs, etc) and enable managers to make the calls in their area, and then hold them accountable.

Equip managers to make quicker decisions by investing in an intranet or mobile ‘manager approval page’ that is a portal that interfaces with all the approval systems, enables one interface for the manager where they can see what is to be approved and either approve it directly or easily link to analyze and approve. Invest in modern departmental workflow systems for the manual processes in HR, and Finance and elsewhere so the work flows without manual intervention. And you can use these systems to set approval(or rejection) time SLAs for the managers to meet. These investments will speed up dozens of corporate processes affecting many of your employees, and set an agile pace.

Another area that consumes time is often requirements definition or elicitation. Poorly defined requirements or requirements defined after multiple, elongated sessions cause serious delays (and defects) for most projects. Work to resolve this by addressing both the tools and techniques your teams uses and, with your business partners, ensuring that there is adequate business expert resources with dedicated time to complete the requirements.  Excellent requirements management tools, such as IBM’s RequisitePro and Borland’s Caliber, can improve your definition time and quality. Also, work with your partners to ensure there’s enough expert staff (business and technical) dedicated to timely completion of the requirements. Use proven best practices such as Rapid Requirements to gain further advantage.

By tackling these areas, you can start to help your organization become more nimble and yet deliver with as much quality and reliability as before.

Moving on to innovation, what are some of the ways that you as an IT leader can contribute?

Put in place the base capability: First, given the technology is becoming an increasing percentage of the content of nearly every service or product, you must ensure that your IT team stays on top of the trends in technology and its application in your market. And you must package and discuss these trends regularly with your business partners. Second, you should identify those key technology competencies that your company must master in order to compete, and ensure that you have those skills onboard and engaged. It is much more difficult to innovate and implement and win in the market if you do not have internal experts who can team with your business leads to figure out the new product or feature.

With the base capability in place there are two ways for most companies to be successful:

• Build a Separate Team: One reason companies succeed is because they focus on delivering quality products predictably. Their operations, product, and technology divisions all strive to eliminate variation and improve efficiency. But innovation, by its nature, is discontinuous and causes failures. Many innovation case studies point to setting up separate innovation teams, either as incubators or as autonomous groups launching entirely new businesses. IBM, Dow Chemical, Shell, and others have taken this approach successfully for years. Companies need to set well-defined innovation goals and sponsorship. Sponsorship should be at a senior level, with both line-of-business and technology members. Companies should view their innovation initiatives as an investment portfolio, where diversity is good and poor investments are traded out quickly. Recall that innovation has a high rate of failure; the most successful groups are ruthless about stopping efforts that won’t succeed. And most of the company still must drive ongoing incremental improvements, innovation in their own right, that are important to the main business. This improvement pace must be supported and just as focused and energized.
• Leverage A Culture of Tinkering: Companies that foster a culture of ingenuity, curiosity, and experimentation can accelerate innovation faster than companies that don’t. But for companies to be able to set aside the time and space for people and teams to engage in “tinkering” requires that they first master the base disciplines of quality and operational excellence (current delivery must be close to flawless). You’ll find such companies in many industries, their ongoing success attributable not only to their ability to innovate, but also to out-execute their competitors. At 3M, scientists famously spend 15% of their time on projects they find personally interesting. Some of their greatest successes (e.g., Post-It Notes) didn’t result from some innovation session or project, but instead came together over years as ideas and failures percolated in a culture of tinkering. Historically, one of the best places for innovation, Bell Labs, shared many of the same characteristics: outstanding operational excellence; the willingness to invest in a culture of tinkering; and encouraging scientists, engineers, and even factory teams from multiple disciplines to work in an open environment with clear goals. The results were legendary, from the transistor to Unix to fiber optics.

With these approaches to agility and innovation, perhaps the elephant can dance. But most importantly, the elephant (your critical IT and business operations) will also be able to continue handles reliably the enormous loads they handle every day while supporting the spark of innovation and incremental improvements that can lead to market and competitive advantage.

Have you had innovation successes in your organization? Share them here.

Best, Jim