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Know Thy Customer: Innovation Advice from IT Leaders in Toronto

Innovation Executive Forum | Posted on July 11, 2016

There is no silver bullet when it comes to successful innovation. But there are quite a few best practices, and inspiring case studies, which can help you get there, no matter what industry you are in.

At the IEF roundtable in Toronto, for example, technology leaders provided ample pieces of advice that can inform and improve CIO’s struggling to move forward. We learned that most of innovation comes down to approaching problems in cross-functional groups. And we saw that understanding the needs of customers and end users is mandatory in order for the solutions you build to be effective. We explored a variety of useful best practices, helping us understand “how” great IT occurs. Finally, we saw the enormous power of data to disrupt an entire industry – and how some leaders are scrambling to prevent this.

Part 1: Want to innovate? Get a group

We all know the saying, “two heads are better than one.” But after witnessing the discussions at the IEF in Toronto, one would be forgiven for thinking this mantra should be written on the walls of every CIO office.

During the Toronto IEF meeting, three IT leaders – one from a marketing conglomerate, another from a property management corporation and a third from a local school board – all touched on the idea that groups are essential to innovation. However, what was more interesting than what these leaders had in common was the way in which they applied this “group strategy” in distinct, contrasting ways. Specifically, we saw that groups can be used to evaluate emerging technologies; to think outside the box to drive new revenue; and even to unearth the customer’s needs.

To straddle emerging tech:

The first story on this topic we heard, centers on the experiences of a vice president of technology at a global marketing conglomerate, with headquarters in Asia. He discussed how the business, coming from a very distinct culture, was struggling to deliver the best experience possible for its employees, especially those in recently acquired companies, including one major online retailer in Toronto.

“We found that small groups worked really, really well,” said the leader. For the 18,000 person company, it all came down to splitting IT teams into tiny groups of a handful of people to deep dive, evaluate and execute on specific technological projects. Thanks to the groups, the IT team has made huge strides in delivering virtualization, cloud and other productivity tools that have helped unite the company and improve the culture.

To break out of the norm:

The next example comes from a firm managing the property of several North American malls. Faced with increasing pressure from e-commerce, they needed to find innovative ways for their tenants – retailers – to sell more and stay alive. The CIO at this company also turned to small groups, this time for something much different.

“We found the only way we could innovate our customer’s business was to bring different groups together,” he said. In each group, three or four individuals come together and are given freedom, and budget, to explore ideas, no matter how wild or out of the norm. One major result was what the leader deemed “Reinventing Santa,” capitalizing on a huge draw for malls, the annual Santa visit, and boosting it with an immersive mobile experience. They were able to reduce end customer frustrations and incentivize more time spent shopping, a win-win result.

To better serve customer and clients:

The third story came from the chief technology officer of a local school board. He discussed many IT organizations take a top down approach to spreading solutions, investigating options in isolation and then rolling out to the ultimate end users. “This is a terrible idea,” he argued. Instead, he suggests you go about it in the opposite way: start with your end customers and go from there.

A few years ago, his team started assembling groups of teachers who were interested in technology, and started asking them how IT could help them do their jobs, better. “They became our think tank,” the CTO said. The impact has lead to numerous innovative ideas to improve education, which would never have been discovered by the IT team members alone, he said.

Part 2: Always put the (internal) customer first

Speaking of learning from teachers, that same CTO doesn’t just take his end-clients and bring them together in a focus group. He also sends his IT staff “out into the field,” to learn and observe, first hand, exactly what their clients go through.

“These are your clients, with pains,” he said. “Go out there, and learn. The more you understand your clients the better our solutions will be.”

He said the approach has not just been enlightening, it has helped shift his organization from always being reactive, “putting out fires,” to getting ahead of issues and building credibility as a truly innovative department. It has also led to new solutions that are saving the organization money, such as the shift to iPads and cutting down on printing costs.

He was not the only one to identify the power of deeply understanding your internal customers – your colleagues – in order to better serve their needs and grow the business. We also heard from the vice president of technology of a national automobile club. That leader said speaking with the users is crucial to the way his company innovates on workplace productivity solutions.

“If you don’t actually go and sit down with the customer, and understand their needs, your work is useless,” he said. “I have guys who think everything is fine, but then they go out there (with customers) and come back and say ‘Oh my god! We have a problem.’”

He said the process of observing how users adopt (or fail to adopt) technology has led to several improvements, including speeding up painfully slow-loading apps, simplifying user experience, and so on.

Another leader argued much the same thing, saying his organization decides on objectives almost exclusively based on customer and end-user feedback.

“Technology is the last thing we think about,” he said. “It’s always more about what the customers care about.”

Similarly, he creates cross-organizational groups, who are given the freedom to go out into the field and spend days, or even weeks, with customers, to understand their needs. The feedback will drive the IT strategy and investments.

He said it took some getting used to, as his team was not used to being focused on customer needs. But when they ended up delivering much more effective technology solutions as a result, everyone was much more motivated and supportive of the approach.

Part 3: How to innovate: 4 views from Toronto

In no particular order, here are four perspectives that stood out during the IEF. Each of them details a unique take IT leaders have on what it means to innovate, and – perhaps more importantly – how to do it.

Strike a balance between cutting costs and innovation:

In our last IEF meeting, the idea was raised that innovation can happen in two ways – you can either use it to cut costs and increase efficiency, or you can use it to surface and exploit new revenue opportunities. The forum in Toronto unveiled a third approach: walking the middle line. His point was that an organization cannot move forward if it relies solely on one or the other.

“Ultimately you are in the middle,” he said. “Where both approaches are being achieved through technology.”

Create a two-way street between IT and the business:

“In my organization, we want to build a two-way street,” said another leader. “You (end-users), know what you want. And we know what we can offer. How can we get together?”

His argument is that IT innovation is impossible in isolation. IT simply doesn’t have the intimate knowledge of what users need to be happy. Bridging this gap is essential.

Understand the objective first:

The same leader from the automobile club said that technology success never comes down to dumb luck. Instead, it more often than not comes from clearly identifying the objective upfront, and then working on the most practical, innovative solution to solve it. Any other approach is bound to lead you astray, he said. This is a powerful way for IT to stay grounded, even as new technologies pop up over the years.

“The technologies might change over time, but that doesn’t matter. Your objective still comes first.”

Staying alive:

Even monopolies need to stay innovative. One leader reminded us of the risk of being too comfortable, and the ongoing need to stay on the cutting edge, or else risk being displaced by more efficient, effective start-ups.

He represents a natural resources mining company in the Canadian prairies – one that holds a near monopoly on the production of a certain resource.

He reminds all leaders, even if you practically own the market, you will still suffer if you don’t find out how to use technology to keep getting more efficient and better at serving your customers.

Part 4: How Google will take over the world (of insurance)

It’s not news anymore that the rush is on to unleash automated cars into the mass market – and that Google will be one of the leading vendors. What might be news is the fact that Google will likely offer up its own insurance on those cars when the time comes, said the CIO of an insurance group. And they aren’t going to stop there.

“The odds of them just stopping there, at cars, is unlikely,” he said. “They have more data than anyone. If they start extending insurance across other industries, how are we going to compete?”

His business is rightly concerned that major data driven businesses, such as Google, may one day disrupt the traditional insurance market. While Google will certainly have all the data it needs to underwrite insurance contracts for its self-driving cars, what is to stop them from pushing that same data-driven insight into more effective, and accurate insurance rates on other verticals, like health or home.

This prospect has sent the CIO’s team into action.

“We are gathering as much data as we can – even if we don’t know how we are going to use it.”

The complicated part, he said, will be developing the aptitude to do something with that data. This is something the big players such as Google will certainly be far more comfortable with. But if they don’t change now, he said, the future of his industry is bleak. Which, for any human sales person working in the field, it is most certainly going to be challenging as automated and data-driven intelligence start to take over.

“My CEO has asked me if we can run this company without actual underwriters,” he said, “I told him, ‘Yes, I think so.’”

Conclusion

For IT leaders struggling to bring innovation to their organizations, the following points should be kept in mind:

• Using groups can unlock the potential of your team to identify new approaches and efficiently focus on specific problems

• Reaching out and understanding your end-users is not just powerful, it is essential, to any IT strategy

• Always have your objective defined, before you start planning the technology

• No matter how big you are, you are always at risk of disruption

To download the report click here

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