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How To Drive Digital Culture To Innovate: IEF San Francisco 2016 Edition

Innovation Executive Forum | Posted on April 25, 2016 by Tobin Dalrymple

It doesn’t matter what industry you are in, if you don’t have a digital culture, you won’t be able to innovate.

This was perhaps the one theme that tied together our discussions at the first Innovation Executive Forum of the year in San Francisco.

We saw how technology leaders need to actively work to create the time, space and context to transform their business. We also witnessed a changing tide in the way IT leaders are hiring fresh talent – a moment in time when the candidate’s heart is far more valuable than the credentials on his or her CV. And lastly, we saw a concrete example of how culture and innovation are sometimes at odds, namely with the battle to adopt cloud technologies. While the cloud revolution is certainly in tact, a shortfall in digital understanding might be the last foe standing in its way.

What follows below are insights and advice gathered from the discussions between top technology executives, hosted by Softchoice in San Francisco on March 9, 2016. (Identities have been kept anonymous.)

Part 1. Tips for creating and maintaining a digital culture

It’s become almost cliché to say “every business is a technology business now.” But clichés happen for a reason – they’re true.

Still, as we saw at the IEF event, several technology leaders continue to struggle with business leadership stuck in the past, set on old ways. “If I told my CEO we were a technology business,” said one CIO, “he would probably disagree.”

Even more interesting, “younger businesses,” born of the digital age, are also forced to constantly innovate. It’s not enough to create something new, shatter old business models, and profit. You need to keep doing it. The technology director at an enterprise software business – one which has disrupted paradigms of online storage and gained a passionate following in the process – explained how his business is now forced to follow up with a “second act.” Even the most progressive businesses need to constantly change, in other words.

So, whether you’re in a legacy business in need of change, or you’re already in a digitally-minded environment in search of your next great “act”, how can you – a technology leader – create, and maintain, a culture of innovation?

Several powerful pieces of advice were shared by the executives during the event.

1. Build the glue, not the plumbing:
Uber owns no cars. AirBNB has no hotels. The list goes on. In today’s modern digital climate, businesses are free to stop focusing on building the plumbing and infrastructure, and focus instead on how they can “be the glue” that holds everything together in a unique way.

Where would Uber be without iOS, without its map and geolocation API’s? Could they have built those things? Sure. Should they have? Probably not.

“Their value comes from glue code,” said one IEF member. “It’s what everyone should do. Focus on creating amazing experiences (with all the pieces), not building the plumbing.”

A technology leader from a hospital perfectly illustrated this point. He mentioned how his hospital already had a strong Bluetooth network, as well as a great sound system, which played music in patient rooms. One day, someone had the bright idea to tie the two together, and now, when a patient enters a room, the system knows their preferences and starts automatically playing personalized music. It’s a small tweak that makes an enormous impact on the user experience – and no plumbing had to be built to make it.

2. Make time for innovation
Speaking of plumbing, far too much of our time is spent fixing and maintaining, when it would be far better to focus on innovation. One example is with data scientists. They spend up to 60% of their time just “being janitors,” cleaning up and prepping data.

But there is something you can do to fight this. IEF members called it “programatizing innovation.” You need to employ tactics to carve out more time to focus on what really matters, and less on the janitorial domain. A few tactics suggested to make time for innovation include “automating the heck out of everything” or simply knowing when to outsource the lowest value, most repetitive tasks.

Whatever you do, it’s clear that blocking out a few hours each day for innovation on your calendar isn’t enough. IEF members said that approach is bound to fail, due mainly to what they called “switching costs” and distractions.

3. Tie individual outcomes to digital success
You want individual workers to contribute to the overall digital success of the business. So why not make it official? One IEF leader talked at length about the value of tying an individual’s performance back to concrete, measurable business outcomes.

For people to innovate, they have to be tied to business outcomes, he said. Whether they are in engineering, sales, or IT, we need to find a way to have zero gap between what that person does to what the potential outcome is that is meaningful to the business.

4. Give your team the freedom to innovate
Among the most popular legends of modern business is Google’s famed “20% time” that gave employees a significant chunk of weekly hours to work on whatever they wanted. But the idea originally came from 3M, said the IEF facilitator, and lead to other major breakthroughs such as the Post-it Note. A more recent example comes from Facebook, and the regular “hackathons” the company holds for its employees.

This is something many technology leaders should take to heart, said the CIO of a healthcare provider. “You should give them the freedom to dream – it’s incredibly powerful what they can come up with.”

In fact, it was this approach that lead to the creation of the Bluetooth-music example mentioned above, which is now offering healthcare patients a delightful, differentiated experience.

5. Make change frictionless and transparent
An innovative company runs on innovative technology. But often, getting your team to change and adopt new tools is incredibly challenging.

Especially if you are the IEF member who runs the IT department at a law firm. He says the legal industry is one of the most resistant to change.

“We literally had to pry typewriters out of attorney’s hands when we made the switch to PC’s and Word,” he said. And though that example was years ago, the lesson is still as relevant as ever. “That’s why it’s so important to make the change transparent,” he said.

6. Embrace outside perspectives and solutions
With a name like Shadow IT, it’s hard not to feel a little fear about it. But one IEF member at the table couldn’t disagree more. “I see Shadow IT as quite the opposite of a threat,” he said. “I embrace it.”

That leader looks to outside solutions, and what his users are begging for, as inspiration. He uses them to guide his strategic vision and pin-point where issues are that he can help resolve.

Another leader mentioned embracing the outside world in a different way: with new hires. He says that someone new to the company possesses that “magical” quality of simply being new. They haven’t yet been brainwashed, so to speak. He makes sure he speaks with all new hires at the start, and makes sure they know how important their feedback is to him. If they see something broken, he wants to hear about it.

7. Rally around a purpose
One of the most powerful drivers of innovation is passion.
IEF leaders were in agreement that giving their team a sense of meaning has the potential to drastically improve their engagement, dedication and output.

This line of thinking was backed up in a recent Forbes article, which highlighted one key thing that all of America’s Best Employers do. They create meaning for their workers.

And while the IEF member, who runs the IT for a shipping company, said it’s tough to find an over-arching purpose to what they do (they don’t save lives, for example), the whole idea of innovation, and experimentation, is having a powerful impact on his team’s motivation. “It’s the beginning of a new way of thinking,” he said. “It’s exciting.”

Part 2. New skills needed for a digital culture

IT leaders today are confronted with the demand to completely change the way they are used to getting work done. It’s no longer about building the infrastructure, or keeping the lights on. Instead, it’s about aligning technology with business outcomes, and paving the way for an innovative future.

And none of this can be done by relying on the old set of rules. This reality is having a massive impact on the way IT leaders are hiring new talent.

One CIO mentioned how his business is transitioning from “a brick and mortar one” to a more technologically driven company. And he put it starkly when discussing who he needs to hire to accomplish that feat.

“We weren’t born digital. The skills that helped us build our analytics, our networks, the skills that got our infrastructure built – these aren’t the skills that will make us successful going forward,” he said.

Indeed, in this “glue code” world, where everything from servers, to storage, to applications, can come ready-made in a box and maintained by someone else – for less cost – the kinds of people on your small internal team will certainly need to fill in other roles.

And with the rise of automated intelligence, it appears not even the CEO’s role is safe from automation.

So, what exactly do IT leaders need from the workers of the future?

It all comes down to soft skills, said one IEF member. You need a team that has the relationship-building abilities needed to engage with business leaders. As we have seen above, business outcomes are increasingly the measure of successful technology – so your tech team needs to be able to understand, and help, with those needs. Similarly, you need your technologists to have a deep appreciation for the end user, whether it’s internal or outside customers, as we enter an era of “user centric IT”.

And since “soft skills” aren’t exactly something you can decipher from the candidate’s resume, it falls on you to learn how to suss these out during the interview process. One IEF member suggested you look for empathy – if they have empathy, he said, they will likely have the soft skills needed to effectively collaborate with the business. Ask probing questions about issues they have confronted, observe how they talk about working with people, to see if your candidate shows empathy – or a total lack of people skills.

Part 3. Digital culture key to cloud adoption

The cloud is obviously no longer just a hype-fueled buzz term. It is a fast, trusted way for businesses to operate in the digital world.

In fact, 93% of IT leaders say they have at least one workload in the cloud today.

But there was a time when everyone at the boardroom table, from the CIO to CEO, were weary of the cloud — particularly when it came to security. This is no longer the case.

“Can we all agree now that we no longer have to pick between cloud and security?” said one IEF member.
Indeed, as the leader explained, businesses and IT leaders are far more trusting of the cloud’s security capabilities. And in most cases, they will readily admit that the cloud provider – whether it be Azure or AWS – is even better than the security teams and processes they would be capable of with their limited resources. The thinking goes that Microsoft has just a little bit more money and resources to put into it than the average IT budget.

Still, this doesn’t mean that the cloud is completely trusted. There are significant hurdles ahead, especially for a variety of highly regulated, scrutinized industries, such as health care, financial, and legal firms (remember the typewriters.)

What the security issue helps illustrate, though, is the importance that culture and subjective ideas have to play in the adoption of new technologies such as the cloud. The issues that slowed down cloud adoption for so many years weren’t, in reality, actual threats.

They were perceptions of danger; they were opinions. And those things change over time, said one IEF leader.

“There will always be subjective and objective reasons for not going to the cloud,” he said. “With time, those subjective reasons fade away.” If you extrapolate from that thought, then you still come face to face with the objective barriers to cloud adoption. Those are the things that make cloud unfeasible to your company, and will continue to do so, no matter how much your feelings change.

“There is always going to be some reason to keep some workloads on-premise,” the same leader said. Whether it be economical, regulatory, or otherwise, the important thing is to understand what forces are keeping you from exploring innovative technologies such as the cloud, and make your strategy based on the facts. Not the subjective opinions.

As such, it couldn’t be more important to have an educated, knowledgeable culture when it comes to innovation. As IT leaders, it falls on you to be the ambassador to new technologies, finding case studies, building business models and working feverishly to battle misconceptions that are holding you – and your company – back from success.

Conclusion

If you had to take one thing away from our IEF event in San Francisco it’s this: The only way to successfully innovate is to build a digital culture.

This notion has several implications for IT leaders. One, it means that you have a responsibility to help create that culture. From changing your focus on what you create (glue not plumbing), to freeing your colleagues to be able to dream, there are numerous ways to do this.

Secondly, a new digital culture is demanding a new kind of IT talent. Today, it is less important to have the technologically skilled, and more essential that the people we work with have the ability to foster relationships with the business, and deeply understand its needs. Look for empathy in your candidates when hiring.

Lastly, we see how culture and knowledge play out in the adoption of a major technology, such as the cloud. Given that you have some level of control on how these new technologies are perceived, it’s your duty to manage the subjective fears holding back your company, and to pay heed to the objective pit-falls. Managing those two things effectively will make all the difference in the success of your digital transformation.

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