In my upcoming new book, Leading the Epic Revolution (Wiley, 2013), I examine the many ways in which smart companies – and successful CIOs – innovate successfully.

The book is based on 12 months of in-depth research. Overwhelmingly, my research uncovered numerous strategies for innovating. Additionally, my research strongly indicates that “one size fits all” solutions for innovation do not exist. Company size, culture, maturity, vertical and region are among many factors that must be taken into account when developing practical strategies for continuous innovation.

In a recent post on the Harvard Business Review blog network, Ron Ashkenas offered some great insight about the innovation challenges facing many organizations. Ron is a senior partner at Schaffer Consulting and an internationally recognized consultant and speaker on organizational transformation, acquisition integration, and simplification.

In his HBR post, he observes that a quick overview of Fast Company’s list of the world’s 50 most innovative companies suggests that established firms have a harder time innovating than start-ups. Is there something about the start-up mentality that makes it easier for them to innovate? Why do established companies often find it difficult to innovate?

Ron’s post features an interview with Steve Blank, the Silicon Valley serial-entrepreneur, author and academician. In the interview, he explains that established firms tend to focus primarily on execution and efficiency because they already have existing products and services. Start-ups must focus not only on developing new products and services, but also on finding customers and developing valid business models. Here’s a brief quote from Ron’s excellent post:

“Finding a viable business model is not a linear, analytical process that can be guided by a business plan. Instead it requires iterative experimentation, talking to large numbers of potential customers, trying new things, and continually making adjustments. As such, discovering a new business model is inherently risky, and is far more likely to fail than to succeed. Blank explains that this is why companies need a portfolio of new business start-ups rather than putting all of their eggs into a limited number of baskets. But with little tolerance for risk, established firms want their new ventures to produce revenue in a predictable way – which only increases the possibility of failure.”

I think that Ron’s post hits the nail squarely on the head. And I genuinely like the idea of companies creating portfolios of new business start-ups. That is certainly one way for some firms to mitigate the risks that invariably accompany innovation.

The larger message, I believe, is that innovation and risk are inseparable. You simply cannot have one without the other. Established companies are inherently more risk averse than start-ups, where risk is clearly part of the culture. That being said, it is difficult to see how even an established company can hope to stay ahead of its competitor without innovating.

The challenge, as I see it, is developing strategies that enable larger firms to tolerate risk. I do not think that we can expect large firms to suddenly begin acting like start-ups, but it is possible for large firms to create or acquire smaller start-ups that function as innovation incubators.

The path to innovation is still not entirely clear. But I am certain that the more we discuss and examine the challenges of innovation, the more we will learn and discover.

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Thaddeus Arroyo, Chief Information Officer, is responsible for AT&T’s information technology. He was appointed to his current position in January 2007, following the close of the merger between AT&T, BellSouth and Cingular.

In his role, he is responsible for directing the company’s internal information technology organization and infrastructure, including Internet and Intranet capabilities, developing applications systems across the Mobility & Home Solutions markets, Business & Network Solutions segments, and AT&T’s corporate systems. He also oversees AT&T’s enterprise data centers.

Under Arroyo’s leadership, AT&T was recognized by Computerworld as one of the 100 best companies to work for in IT for 2012 and by the American Business Awards as the 2009 IT Department of the Year for innovation and contribution to AT&T’s business goals. In addition, AT&T has been an Information Week 500 Award recipient for five consecutive years and a CIO Top 100 award recipient in five of the last six years, honoring companies transforming business through innovation and execution. Arroyo has been recognized by leading publications including Hispanic Executive (“Top 10 Líderes,” 2012); HITEC (“Estrella Award,” 2012; “100 Top Hispanic IT Executives,” 2008); Billing & OSS World (“Industry’s Top 25 Most Influential,” 2011); Hispanic Engineer & Information Technology Magazine (“Top 200 Influential Hispanics in Technology,” 2011); Hispanic Engineer and Information Technology (“Most Important Hispanics in Technology and Business,” 2004, 2005, 2006 and 2010); Computerworld (“Premier 100 IT Leaders,” 2009); Hispanic Business (“Profile of 100 Influentials,” 2009); HENAAC Promoting Careers in Science, Technology, Engineering and Math (“Executive Excellence Award,” 2008); Latina Magazine

(“Latinos Of The Year,” 2007); and Business 2.0 (“Business 2.0 Dream Team,” 2004). He received the 2011 “Oracle Excellence Award for CIO of the Year” and the 2002 “Georgia Global CIO of the Year Award” in recognition for technology leadership demonstrating innovation and creativity in planning and deploying enterprise systems.

Arroyo has a bachelor’s degree in mathematics from the University of Texas at Arlington, and a Master’s of Business Administration from Southern Methodist University.

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Posted to The Transformational CIO - Leadership and Innovation Strategies for IT Executives

Posted to The Transformational CIO - Leadership and Innovation Strategies for IT Executives

Posted to The Transformational CIO - Leadership and Innovation Strategies for IT Executives

In a time of extremely rapid change and transformation, CIOs are central to the health and well being of the modern corporation. Can you think of an important business process that isn’t enabled by IT? CIOs have unique expertise and relevant knowledge that enables them to “see” across the many units, silos and functional areas of the 21st century enterprise.

From their singular vantage point, CIOs provide resources of immeasurable value to the business. Quite simply, their insight helps drive the innovation that results in business dynamism and real growth.

I was absolutely thrilled and humbled to present the 2012 Transformational CIO Leadership Awards at the 2013 CIO Summit of America, held last week at the Harvard Club in New York. It was an honor and a privilege to share the podium with such an amazing array of top executives. The energy and enthusiasm of the audience was truly uplifting and inspirational.

The honorees represent the absolute best of world-class IT leadership. We are so incredibly proud of our collaboration with an elite group of CIOs and IT leaders from such a broad range of industries and organizations.

Here is the list of 2012 Transformational CIO Leadership Award winners:

• Puneet Bhasin, SVP & CIO, Waste Management, Inc. and President, WM Logistics
• Brian Bonner, VP & CIO, Texas Instruments
• Gregory Buoncontri, EVP & CIO, Pitney Bowes, Inc.
• Timothy Campos, CIO, Facebook
• Robert Dixon, SVP & Global CIO, PepsiCo, Inc.
• Donagh Herlihy, SVP eCommerce & CIO, Avon Products, Inc.
• Jeanette Horan, VP & CIO, IBM Corporation
• Mario Leone, EVP & CIO, Ingram Micro
• Steve Phillips, SVP & CIO, Avnet, Inc.
• David Smoley, SVP & CIO, Flextronics International
• Randy Spratt, EVP, CIO & CTO, McKesson Corporation
• Ed Steinike, VP & CIO, The Coca-Cola Company
• Kimberly Stevenson, VP & CIO, Intel Corporation
• Carl Wilson, former EVP & CIO, Marriott International

This is singular group of amazing corporate leaders who serve as role models for the IT community. Working alongside people with such talent, wisdom and expertise has been a magnificent experience.

As mentioned, the awards were announced last week at the 2013 CIO Summit of America. The annual summit drew a record attendance of more than 320 top-level executives. The scope, range and depth of the presentations, panels and discussions were truly epic and unparalleled. The summit and the awards ceremony demonstrate the strategic relevance of the modern CIO as a transformational leader and indispensable corporate officer.

Our West Coast awards ceremony will be held at the upcoming 2013 San Francisco CIO Executive Leadership Summit on March 12. For more information about the summit, please click on this link.

From my perspective, the message of the awards is crystal clear: The CIO/IT leader is absolutely critical to the long term success of modern companies. IT is everywhere in the enterprise, and its strategic role continues to grow.

We’ve traveled a great distance over the past 30 years. Together, we are riding a great wave of transformation and career elevation. In my opinion, the size and power of that wave is still building. We’re in the early innings of a long game, and the best is yet to come.

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You could feel the incredibly high levels of energy, enthusiasm and engagement at Monday’s 2013 CIO Summit of America at the Harvard Club in New York. The annual summit, described as “the industry’s most genuinely effective and dynamic peer-to-peer networking event,” drew a record attendance of more than 320 top-level executives. The scope, range and depth of the presentations, panels and discussions were truly epic and unparalleled.

I was extremely gratified to see such a large group of CIOs, IT thought leaders and industry experts gather in one venue to share their knowledge, experience and wisdom. Most of them sense that we’re at an inflection point, and that the role of the CIO has never been more important or more relevant to the well-being of the enterprise.

Rapid advances in cloud, social and mobile technologies have fundamentally changed the IT landscape. The CIO is the single best person to navigate the complicated path ahead and safely guide the enterprise to success in a shifting economy. We cannot afford to minimize the risks of newer technologies, but we also need them to compete in global markets.

The CIO is perfectly positioned to leverage newer technologies, mitigate potential risks and gain the maximum ROI from new IT investments. The CIO is the ideal choice for leading the journey from older to newer technologies, responsibly and effectively. From my perspective, the summit drove home a key message: the strategic relevance of the CIO is crystal clear and absolutely critical to the success of modern companies.

We heard visionary keynote presentations from Tim Campos, CIO, Facebook;  Steve Harvey, Global Analytics Leader, IBM Global Process Services; Julie O’Brien, Industry Marketing Director, Box; Dr. Howard Rubin, Rubin Worldwide, MIT CISR Research, Professor Emeritus, Hunter College of NY; and Ajay Waghray, SVP & CIO, Verizon Enterprise Solutions.

Panelists and other speakers included Snehal Antani, CIO, Enterprise Architecture, GE Capital Americas; Shawn Banerji, Managing Director, Russell Reynolds Associates; Kurt Brungardt, CIO, MSD Capital L.P.; Gregory Buoncontri, EVP & CIO, Pitney Bowes, Inc.; Rick Farnell, Co-Founder and President, Think Big Analytics; Jon Harding, Global CIO, Conair Corporation; Donagh Herlihy, SVP eCommerce & CIO, Avon Products, Inc.; John Hill, CIO, Veyance Technologies, Inc.; Lisa Hoffman, CIO, Marsh & McLennan Agency; E. Jeffrey Hutchinson, CIO, Maple Leaf Foods; Daphne Jones, SVP & CIO, Hospira, Inc.; Jonathan Landon, Global IT – CTO, Kimberly-Clark Corporation;  Lisa Larson, VP, Enterprise Cloud Solutions, Rackspace; Tony Leng, Managing Director and CIO Practice Leader, Diversified Search; Chris McGugan, VP & GM, Emerging Products & Technology, Avaya; Gerry McNamara, Partner, Heidrick & Struggles; Scott Morrison, VP, IS Prescription Medicines, Corporate Information Systems, Boehringer Ingelheim; Ken Murdoch, CIO, Save the Children; Adam Noble, SVP & CIO, GAF Materials Corporation; Jim Panos, CIO, Central National Gottesman; Mark Polansky, Managing Director, IT Officers Practice, Korn/Ferry International; Brian Queenin, Partner, Global Business Services, Business Analytics and Optimization (BAO), IBM; Doug Rousso, SVP & CTO, CBS Corporation; Mary Sobiechowski, CIO, Kantar Health; Carol Zierhoffer, VP & Global CIO, Xerox Corporation; Ken Zimmerman, Senior Business Intelligence Architect, Chateaux Software; and Hank Zupnick, CIO, GE Real Estate.

Together, we took the summit to a phenomenal new level of excellence and relevance. The rapport between the speakers and the audience was nothing short of amazing! The breakout session and panel discussions also delivered extremely high value, grappling with crucial topics such as Social Media and the Consumerization of the Enterprise; Driving Business Success and Innovation; Harnessing the Power of Big Data and Analytics; The New Enterprise Architecture; and The Role of the Modern CIO.

Honestly, it was a truly amazing event. You could sense the energy and engagement as top executives spoke and shared their stories. Moving forward into a very promising year for the IT industry, the summit sets a new bar for excellence and relevance. I hope to meet you and speak with you personally at future summits and live events.

At HMG Strategy, we are building the strongest CIO/IT leader community on the planet. We invite you to join our global dynamic network and elevate your career by meeting with peers, sharing experiences, and acquiring new perspectives on a changing world.

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Jim Tosone has an interesting career history. He was an IT leader at Pfizer for 30 years, and served as head of the company’s Healthcare Informatics Group. As he moved into management, a career coach suggested that he join Toastmasters to improve his communications skills and also join an Improvisation group to enhance his collaboration and creativity skills. Here’s the story in Jim’s own words:

“I was your stereotypical IT professional. I was introverted. I wanted to figure out everything myself, and do everything myself. I didn’t think communication was an important skill.”

“But when I moved into management, I had problems communicating with staff, peers and internal clients. My experience in Toastmasters International and at The Second City Training Center (a leading organization for improvisation) changed my life. The people I worked with at Pfizer noticed the difference, and they asked me to conduct Improv workshops for other managers.”

“I left Pfizer in 2010, and decided that my ‘next career’ would not be healthcare IT consulting, but helping organizations enhance their creativity, collaboration, and communication skills using improvisation. In a sense, my new career was improvised.”

The rest, as they say, is history. Jim is now a respected coach, with major clients in many industries. We asked him to explain why improvisational skills are important for leaders of innovation. Here’s a summary of his response:

“Executives are well-trained, both in college and on the job, to think critically. They’re trained to spot flaws in an idea. They look for risks and hidden costs. They anticipate negative reactions from various stakeholders.”

“But they have less training in the art of possibility. One of the key concepts in improvisation is called ‘Yes and…’ What that means is when you are presented with an idea, you acknowledge the idea and you ‘accept’ it.”

“Acceptance means a willingness to explore the idea, to find out what’s good and right about the idea, and to build on or enhance it. Only after the idea has been fully explored do you go into critical thinking mode.”

“The downside of the traditional approach, in which you go into critical thinking mode first, is that thousands of good ideas with real possibility get strangled in the cradle.”

Jim also explained how modern collaboration is different from traditional brainstorming.

“They’re different in a couple of important ways. Often what happens in brainstorming sessions is while other people are tossing out ideas, you’re not really listening because you’re trying to come up with your own ideas. You’re not fully engaged with them.”

“In improv-based collaboration, you listen to what other people are saying, acknowledge them, accept their ideas, and build on them. It’s less about positions and advocacy and more about exploration and co-creation.”

I really like how Jim makes the distinction between modern collaboration and traditional brainstorming. From my perspective, collaboration is an essential part of innovation, and collaboration requires many of the same skills involved in improvisation: the ability to listen carefully, work closely in small teams, and generate meaningful responses rapidly in a continually changing environment

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Mike Hill has been with IBM for 35 years, and like many other executives here, he has held a variety of positions within the company. His current title is Vice President of Enterprise Initiatives. Essentially, Mike leads a team that is responsible for taking new ideas with great potential and building them into businesses that can be rolled back into the core IBM business.

In the past year, I have interviewed Mike several times. In one of the interviews, I asked Mike to explain how a large company like IBM pursues a strategy of continuous innovation and transformation. Here’s a condensed version of what Mike told me:

“We know a lot about transformational leadership here at IBM. We’ve been on a path of continuous transformation for the past 20 years. We can execute on our strategies today because we transformed – and continue to transform — our organization and our businesses. We take the idea of transformational leadership very seriously.”

I really appreciate how Mike makes the case for an integrated approach to leadership, innovation and transformation. Here’s another portion from our conversation about leadership:

“Today’s markets are dynamic and volatile. Traditional leadership models can’t keep up with the accelerating pace of change. Remaining competitive requires continuous business transformation and tight operational alignment. CIOs are perfectly positioned to provide the guidance, expertise and leadership needed to navigate smoothly, safely and effectively through this new and exciting world.”

“Our experience with cloud computing here at IBM is a good example of the kind of transformation and alignment … when we looked at the cloud, we saw a multibillion-dollar business opportunity, and we knew that we needed a different kind of model to bring that business to fruition. Sam Palmisano, who was our CEO from 2000 to 2011, created a new strategy team called Enterprise Initiatives. That’s the team that I lead. Our mission is taking new ideas with great potential and building them into businesses that can be rolled back into the core IBM business.”

“What does that mean? It means watching over them, developing their portfolios, protecting their funding, and driving initial sales. It means helping them scale up and nurturing their leadership.  Our job is building and installing all the plumbing that those new ventures will need to survive and succeed in a fiercely competitive business environment.”

At the end of one of our conversations, Mike reminded me in the final analysis, execution is what counts. In an era of continuous change and rapid evolution, the ability to execute on a vision is the key to success. From my perspective, the role of the CIO in leading innovation and transformation change has never been more important.

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I was recently introduced to Bruce Bachenheimer, Clinical Professor of Management at Pace University’s Lubin School of Business and Director of the University’s Entrepreneurship Lab. I think it’s fair to say that Bruce lives and breathes innovation and entrepreneurship. A serial entrepreneur himself, Bruce is an expert on the important role that innovation plays in business growth.

In a lengthy interview, Bruce outlined some of the reasons he’s passionate about innovation and entrepreneurship. Here’s a brief summary of what he said in the interview:

“As Thomas Friedman says, the world is flat. Countries compete on a much more equal basis than in the past. On a national level, the only sustainable competitive advantages come from innovation.”

“Competing on the basis of low labor costs is a temporary strategy. It’s a race to the bottom and it won’t keep you competitive in the long run. Nations with high standards of living, low unemployment, trade surpluses and general prosperity tend to compete on innovation.”

“For a while, it seemed like Japan’s strategy of competing on the basis that manufacturing efficiency was a winning strategy, but the gains they achieved disappeared as competition drove down prices, which benefited consumers, not manufacturers. It was a temporary victory, and now they’ve been in a recession for nearly two decades.”

“If you look at countries that are leaders in innovation – the U.S., Australia, New Zealand, Israel, and the countries in northern Europe – you see high levels of education and high levels of entrepreneurship. In Japan, for example, the culture and regulatory system make it very difficult for entrepreneurs to succeed. If you are an entrepreneur in Japan, you face a lot of barriers. As a society, Japan is very intolerant of failure. That fear of failure stops people from taking risks, and you need to take risks to succeed as an entrepreneur.”

“On the other hand, countries like the U.S. and Israel are much more tolerant of failure – especially when you fail on someone else’s dime. Failure isn’t exactly a badge of honor, but it’s not the end of the world either. In the U.S., when someone’s business fails, people are likely to say, “That guy really learned a lesson. He sure won’t make that mistake again.” People in entrepreneurial cultures tend to see failure as a learning experience.”

“Company cultures have a similar impact on innovation. Companies that encourage innovation and tolerate a certain amount of failure are more likely to be the serial innovators.”

I love how Bruce puts innovation and entrepreneurship into context, and shows us the impact of innovation on multiple levels.  Bruce also advises his students to think like innovative entrepreneurs when envisioning their career paths.  In today’s rapidly evolving and ever-changing economy, I think that’s excellent advice for all of us.

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