Moving the Business Forward (Part 5)

1. Innovation Killers
Like Shackleton, whose undertaking was criticized for being too “audacious” (no one had done what he had done and it took nearly 40 more years before the expedition was tried again) and who was disappointed time after time by promised grants of financial aid which failed to materialize -- IT needs to manage innovation killers. If Shackleton had listened to those around him, he would never tried a trans-Antarctic expedition. Likewise, if IT listened to those innovation killers who reside in every company – policy hawks (i.e., those that state the project/initiative is inconsistent with established corporate polices), metric misers (i.e., those that de-rail projects/initiatives because they cannot be measured using established budget metrics), penny pinchers (i.e., those that oppose projects because they cost money and have questionable ROI’s), and devil advocates (i.e., those that promise to support the project/initiative but cannot be found when the project/initiative is launched – much less as it proceeds) – innovation would be stopped before it gets started.

2. No Constraints
Secondly, IT needs to make sure that no constraints are placed on innovation. Shackleton’s expedition was at least 40 years too early. The technology needed – air support, motorized vehicles, telecommunications – simply did not exist. Yet, this did not stop him.

Likewise, IT can only be innovative if we eliminate all constraints. Borrowing from Jack Bergstrand and his book, “Reinventing Your Enterprise”, we need to ask questions like:
· “If you could start from scratch? What would you do?” (Clean Sheet)
· “What would your company look like with no fixed assets?” (A new asset structure)
· “If you cut your transactions in half, what would your company look like?” (Fewer moving parts)

IT needs to have a passion for something different. We need to think (and encourage) unconventional thinking. We need to challenge people to go beyond what they think they can accomplish so that they can be a catalyst to generate innovative ideas. That is, we need to facilitate the very alteration of the organizational mindset.

3. A New Business Model
Thirdly, we need to recognize that innovation is more than just achieving a positive ROI. It is more than being transformational. Innovation is creating a new model of business. It is creating a new line of business. Shackleton’s expedition was not just a faster, more efficient accomplishment of what had been done before. It was something new – it was a new challenge never undertaken. It was not making the race horse run faster. It was the introduction of a horseless carriage!

Likewise, innovation demands that IT do more than make the customer portal faster. It is more than virtualizing servers. It is more than moving applications to the cloud. It is more than displaying KPI’s on smart phones. It is more than replacing laptops with tablets. IT cannot be truly innovational until it creates a new business model, a new line of business, or a new source of revenue.

To be innovational, IT must create a mobile app that allows pizza to be ordered on a telephone. IT needs to make it possible to print labels on a truck so that the vehicle can pick up returned merchandise that is now considered hazardous (Did you know that hairspray is considered hazardous when sent for disposal?).

Andrew Isaacs, a professor at UC Berkeley’s Haas School of Business has stated that there are three types of innovation. The easiest is a product or service innovation. The second type is a process innovation which involves a cultural change. The toughest type of innovation is business model innovation (the one we are discussing) because it changes the way an entire industry/company works. That is the type of innovation that IT needs to deliver.

4. Execution
Fourthly, we need to recognize that innovation is more than just a set of ideas. Shackleton had a great set of plans for his expedition. He spent months acquiring the countless items of equipment, stores, and gear that would be needed. Sledges were designed and tested in the snow-covered mountains of Norway. A new type of ration intended to prevent scurvy was tried out, as were specially designed tents. But innovation is more than just a set of ideas. And Shackleton had to execute a plan based upon those ideas.

Likewise, we need to not fall into the trap of placing too much emphasis on ideas and not nearly enough emphasis on execution. There are more than 10,000 climbers each year who attempt to reach the heavily glaciated summit of Mount Rainier in the Northwest. It is perhaps the world’s most difficult climb that is accessible to novices, so long as they are accompanied by expert guides.

The first hour of the climb is easy. Each subsequent hour is harder. At dawn, the climbers get their first glimpse of the summit – majestic and inspiring. With each step, however, their labors become more excruciating. Muscles ache. The air becomes thinner. Some of the climbers become dizzy. In fact, nearly 50% of those that start out, turn back failing to achieve the summit. For those that persevere, the summit brings jubilation and exhilaration. Months of preparation comes to fruition. To be atop Mount Rainier is to sense that you are on top of the world. The city of Seattle lies more than fourteen thousand feet below.

But their adventure has only begun. They still have to get back down. And the descent from Rainier’s summit is actually the most difficult part of the expedition. Climbing a flight of stairs may be harder than descending but this is not the case with a descent from Mount Rainier. It is a dangerous mountain, one that claims a few lives each year. The snow on the surface of the glacier can collapse into interior caves and tunnels, and climbers can slip into deep crevasses. As each hour passes, sunlight and rising temperatures soften the snow and increase the risk. Added to these risks is the fact that climbers are deeply fatigued and prone to mistakes. No matter how many times they are told of the dangers in advance, climbers naturally relax at the summit. The glamorous part of the quest is over. The big aspiration – the big dream – has been fulfilled. The trip down is an afterthought.

There is a Rainier-like summit in innovation. It occurs when an organization says yes! That’s a great idea! Let’s take it to market! Let’s make it happen! Getting to the summit can be difficult. The challenge of reaching the summit lures many. It captures the imagination. It is easy to get others excited. Getting to the summit can seem like the fulfillment of a dream, but it is not enough. After the summit comes the other side of innovation – the challenges beyond the idea – execution.

5. Risk-Taking
Finally, innovation requires that we take risks. Shackleton would never have saved the crew of the Endurance without taking on risk. The 800 mile boat ride in an open boat with only a sextant and a map is ridiculous. Climbing a mountain without adequate gear and one that only experts try – is insane. But spectacular success requires taking risks.

Likewise, innovation requires that IT takes risks. The interesting thing about this is that risk-taking is not in the DNA or makeup of most IT leaders. According to an article in CIO Magazine in November, 2010 innovation lags in IT departments because:
· Of a fear of failure
· Only 20% of CIO’s consider themselves as innovational
· IT became a cost center

We need to break this cycle of fear. To become innovative, IT must take risks. It must demonstrate an obsessive quest for results that create/allow a climate for risk taking and innovation. We must (within reason) tolerate failure since each failure can be used as a learning event, or a step in the right direction. And we must have a relentless commitment to deliver specific, quantifiable outcomes. This will assist the organization in achieving a “breakthrough” strategy. The best IT shops never stop learning.

Abraham Lincoln’s personally reviewed every letter requesting that the government purchase a particular invention that would shorten the war. He was astute enough to realize the importance of gaining new and effective weapons as soon as was humanly possible. As a result, Lincoln oversaw the implementation/rollout of pontoon bridges, hot-air reconnaissance balloons, ironclad ships, and breech-loading rifles amongst others.

The ability of IT to entertain innovative ideas and ask for help/permission in implementing them may seem to be obvious. But the sad fact is that too many IT shops resign themselves to the limits imposed on them by flawed systems rather than re-thinking those systems. Given the pace of technology change, IT simply must create a climate of risk-free entrepreneurship necessary to foster effective innovation. (Donald Phillips -- "Lincoln on Leadership")

Where is Safety-Kleen in this journey? It is a very interesting question. As I prepared this presentation, I was forced to look myself in the mirror. I was forced to hold myself up to the standard that I was creating. This is what I found:

· We have built a firm foundation. We have a multi-year plan that lays out a business, application, and technology blueprint. This multi-year plan is at its core, business-driven technology enablement. It is consistent in both timing and focus to that of the company’s 3/5 year plan. We are seen by the business as being credible. Our solutions are highly customer-centric.
· We have been transformational. The business-driven technological solutions have addressed real business needs. They have yielded increased efficiency, higher revenues, lower costs, and lower risks. They have introduced practices that fit best within S-K. They have assisted in building a culture of continual improvement.
· We aspire to be innovational. While we have navigated the “shark-infested” waters past innovation killers, while we have removed most constraints from our employees imploring them to “think about the box”, while we have proven to be very good at execution, and while we are more than willing to take on risks – we have not yet introduced technology to create a new line of business or a new model of doing business. That is our next goal!

I tell you this for transparency purposes. I, S-K, have not arrived. We have built a firm foundation. We have been very transformational. But the mountain to be scaled to be innovational is a very high standard. I hope that this presentation provides you with a picture of how you can become innovational and the things you need to do along the way to make it possible.