Competing With Data & Analytics
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Any large or midsize company runs the risk of becoming stale and losing market share without tens, or more likely hundreds, of innovations under consideration and development at any given time. But with so many simultaneous projects, the company also needs to minimize duplication of effort, control the allocation of resources and ensure that it funds an appropriate mix of low-risk/incremental and high-risk/potential-breakthrough ideas.
For Unilever, the answer is Inoplan, a homegrown information system that aggregates and summarizes data from individual projects, providing a high level of control and review for upper-level management. For The Procter & Gamble Co., one solution is a web-based service called InnoCentive, which connects some 120,000 technical professionals from more than 175 countries.
Examples such as these are not rare, but they are not as common as one might suppose. Though scientists, designers, engineers and other innovators are used to working with computers to analyze their data and visualize their designs, the number one response to the question “How can IT help you?” tends to be some variation on “Keep it away!” That is, the IT department is generally seen as less of a help and more of a hindrance to innovation efforts.
The trouble is that information systems are traditionally designed to impose structure on processes, achieve predefined goals, produce metrics of progress and minimize the need for human interaction, while innovation activities are highly unstructured and emergent. They require tolerance for ambiguity and failure and the flexibility to redefine goals when opportunities or roadblocks arise. It is not surprising, then, that many innovators believe information systems will hamper their work and present barriers to their creativity and productivity. IT managers are no less frustrated. From their viewpoint, as a senior manager from E.I. du Pont de Nemours and Co. told us, one of the biggest issues is “IT getting a place at the [innovation-activity] table versus being a utility.”
The Leading Question
How can organizations use information technology to increase the payoffs of their innovation investments?
- IT departments should support innovators’ activities by developing capabilities critical to the innovation process.
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1. The concept of a “capability” or “competency” (a collection of routines and processes that direct company resources toward unique and valuable outcomes) has evolved from the strategy literature on the resource-based view of the company. See D.J. Teece, G. Pisano and A. Shuen, “Dynamic Capabilities and Strategic Management,” Strategic Management Journal 18, no. 7 (1997): 509-533.
2. The structure and process have been simplified for presentation purposes.
3. O.M. Bjelland and R.C. Wood, “An Inside View of IBM’s ‘Innovation Jam,’” MIT Sloan Management Review 50, no. 1 (2008): 32-40.
4. K.J. Sharma and B. Bowonder, “The Making of Boeing 777: A Case Study in Concurrent Engineering,” International Journal of Manufacturing Technology and Management 6, no. 3/4 (2004): 254-264.