Next he reorganized the consulting and outsourcing part of the business, spearheading the effort to transform Kelly Services from a provider of transactional business services to a solutions provider. That business, now known as OCG, is approaching $500 million in revenues and led to the creation of the Office of Innovation – a team of four people with an operations budget and a separate project budget.

The Office of Innovation is operating under three imperatives. The first one is to be fostering disruptive innovations, mainly business model innovation, and not continuous improvements — which belong in the day-to-day operations of the core businesses.  The second one is to improve the efficiency and the effectiveness in the way they monetize innovation. And the third one is to begin to evolve a culture of innovation within the company.

The biggest challenge that Rolf faces in achieving his goals is entrenchment — the bias to maintain status quo. It is really hard to become a disruptive innovator when you have trouble integrating new concepts into old business models.

The model to find disruptive innovations is a pull model. They pull ideas from their organization, their partners, their vendors, and their customers. They do this by creating communities, enabled by Chatter from Salesforce.com. The first community was rolled out to the entire organization. Everyone can become a member and submit ideas, critique ideas, vote on ideas, and publish articles or blogs for the community to see. The ideas then make it into an idea management process — where it gets determined whether ideas are disruptive or not, and where it gets decided on the path that the ideas will follow down the organization.

They launched the whole initiative with a road show that included a four-hour presentation — one hour to explain the why, the what, and the how of the program and a three hour session of facilitated idea jam. They organized 30 such sessions around the world with senior and middle managers, and armed them with the tools to conduct similar sessions with their teams.

Within the community they use both open ended innovation — allowing members to submit anything they want without rules — as well as directed innovation — periodically soliciting some ideas around specific topics. While members can vote and comment on ideas, the screening process for ideas is not exactly a pure democracy — it is led by a team of experts that pass potentially disruptive ideas through a set of 14 screening tests. Those screens include whether an idea has the potential to affect the financial bottom line by 15%, and whether an idea is precedent setting or whether it will obsolete a predecessor. Once an idea passes the 14 tests, it goes into the Office of Innovation idea management process.

Out of the couple of hundred ideas that have come through the system in the last year, 98% were of the continuous improvement type. Only three or four met the disruptive innovation criteria. They also seeded ideas — ideas that came from the outside or that senior managers had previously identified as potentially disruptive — so that they now have a total of projects running through the process.

Once an idea passes the screening test, it goes through a three-step process. The first one is a high-level discovery step where they look at the financial opportunity, the alignment with the overall strategy, and the fit within the current competitive environment. They do a SWOT analysis on the idea and take it to a decision gate, which is the CEO and the COO. If they decide to pursue an idea, it goes into an incubation stage. The incubation happens outside of the main operation, and while the stakeholders are engaged, they are engaged for input only, not for permission. After incubation, they create a new business case and take it back to the decision gate. If they advance it, a pilot gets funded — either internally or externally. If the results of the pilot are good, which can include adjustments to the idea, they again go to the decision gate with a business plan to accelerate it into the business. If the answer is yes, it loops into the bottom of their product development process — where training and marketing materials are produced, where everything that needs to happen to operationalize it is put in place, and where it gets launched into the business. The role of the Office of Innovation at that stage is to monitor its performance until the business begins to scale.

The corporate immune system kicks in with the pilot, especially if an idea is in the core business. The key to successfully overcome this barrier is by having support from the top. Should an idea encounter overwhelming obstructions inside the business they would set it up externally.

It is also critically important to create an innovation culture. At Kelly Services they use a method called the Innovation Management Maturity Model, along with the VIQ tool, both developed by the Poole College of Management at North Carolina State University, to gauge their innovation culture as well as to develop a path to move through the five stages of innovation culture.

We closed the session with Rolf giving his personal view on the Future of Work. He believes that we are returning to a nation of shopkeepers, not in the literal sense, but in the size sense. With the exception of capital-intensive businesses, we will begin to see dis-aggregation of companies. The rise of the free agent is not a fad, it has been at least a 50-year trend. On a more dire note, he believes that we will see a continuing erosion of the middle class because technology is eating the center out of the job market. You either have the skills, the knowledge, and the background necessary for high paying jobs, or you don’t. And if you don’t, it’s not a pretty picture. He also believes that this will lead to a re-engineering of education — making it much more specific, much quicker, and much more adaptable in terms of re-skilling and re-educating people. It will also have to become a lifelong pursuit.

Other things we discussed include:

• What to do with ideas that do not make it through the decision gate.
• How to communicate about ideas that have the potential to cannibalize existing business without disrupting that business as the idea goes through the process.
• The incentive systems that should be used in innovation processes.
• The importance of speed in execution to deal with the increasing rate of change.
• The effect of the changing nature of work and workforce on the innovation process.
• The importance of incorporating the customer culture in the process when running innovation programs with customers.

Next we talked about the changing workforce – a topic near and dear to Casey, and one that she writes about on her blog. With 4 generations at work, and with the old management structures and practices that were not really designed for knowledge workers still in place, it is a real challenge to design a workplace environment in which people can have an impact and the opportunity to be autonomous in creating a knowledge product of their own. You want to create an environment that allows a professional workforce to do their best work in a way that is not overly constricted by unnecessary management structures. While it is harder to implement changes fast when you are dealing with taxpayer dollars and public trust, Casey sees lot of energy to change, to embrace new technology, to be innovative, and to be thought leaders in government. She dispells the perception that a government workforce is being less open to change.

Casey’s mantra is that work is what you do, and not where you go in the morning. That is why she led the effort to enable every GSA employee to have access to their critical documents and messages from anywhere, any time, and with any device. You no longer have to be in one of the government buildings, using a government laptop, connected to the government network to get your work done.

Another big mantra of Casey’s is that she wants to empower people to work smarter — meaning having the ability to work as part of a team when not all team members are in one location. They did that partly by rolling out SalesForce’s Chatter social collaboration product, as part of her collective intelligence initiative. They also set up a lightweight workflow development tool — Force.com — that is used consistently throughout the agency and that allows them to roll up the work into a common framework and to understand things like cycle times, and where investments are being spent on a national and on an agency-wide level.

Next we spoke about the importance of culture in organizations. The GSA is fortunate to have a historic culture of innovation — dating back to the mid 90′s when they were the first agency to give everyone access to the Internet. By tapping into that culture of innovation and the history of taking pride in being thought leaders they have now been able to develop a culture of acceptance — one in which there is a willingness to try and adopt new things.

Casey is also convinced that technology can shape culture by being able to break down barriers and boundaries. Communications and decision-making is no longer top down, and by using social media technologies one can now rapidly find those individuals within the organization that are most open and enthusiastic about strategic changes. They can become thought leaders and partner with the leaders of the organization to shape the culture in a new way. Casey used the example of the Great Ideas Hunt, which was launched by the head of agency in an effort to find great ideas from employees on how to save money and be more effective. Not only did it lead to great ideas, many of which will be implemented, it was also an effective way for the head of the agency to communicate his priorities, and enlist the help of others to make it happen.

Lastly we discussed the opportunities of big data in organizations. The federal government has of course a lot of data that is useful for other organizations. That is why the Obama administration launched an initiative around big government data, called Data.gov. That is a site where government agencies and state and local governments publish their data. The format of the data is rather raw, but the expectation is that others would develop all kind of cool end-user apps using the government data — for example, combining positioning data with bus and train scheduled, so that from your smartphone you can pull up an app that shows you where you are, where the nearest train stations are and when the next train will arrive.

Other things we talked about include:

• How to use social collaboration to connect the different generations at work
•  How to quickly locate the right expertise across the entire agency
• Lessons learned from running ideation campaigns
• The use of social media and social media policies
• The effects of compliance issues on social media use
• Gamification of business and the impact of millennials on usage
• The future of education and the need for continued employee education
• Consumerization of IT

One of the biggest issues facing CIO’s relates to data stewardship. It’s not just about securing the data. The real challenge lies in giving people access to the right data in real time and in a secure fashion. The challenge becomes even more complicated when you operate in a regulated environment, when you try leveraging open communities with customers and employees, when the workforce becomes increasingly mobile, and when more and more employees want to bring their own devices to work. Another security issue that CIO’s increasingly will have to deal with is “hactivism,” where groups of people like Anonymous hack for a social cause. That is the reason why the CIO Institute, which Ari heads, is putting together a certificate program for Chief Information Security Officers at CMU this fall.

Some CIO’s handle this issue by locking everything down, which, of course, stands in the way of innovation and competitive differentiation. Data-driven decision making is going to become increasingly important for organizations. The big mess that comes with big data – with structured and unstructured data coming from all kinds of sources, including mobile and social campaigns – is calling for IT professionals who are true data scientists, with expertise in aggregating, architecting, organizing, and filtering data as well as advanced statistics to enable data correlation. Some companies, like PepsiCo and P&G, have been doing really cool stuff around mining vast amounts of data to come up with insights and intelligence about consumer behavior. Others have been able to leverage data to increase the success ratios of new product introductions.

CIO’s will also need to play a role in providing a better work environment for workers. With a recent Gallup poll showing that 75% of workers are disenchanted with their work environment, there is a lot of room for improvement on that front. They will be able to do this by rolling out social technologies that will enable workers to develop a higher level of engagement and a higher sense of belonging. Doing so successfully will require developing an understanding of the right motivations and the right incentive structure. It will also require the right culture – a culture of collaboration that does not reward individual achievements.

Ari next talked about innovation, and the characteristics that make crowdsourcing work — including altruism and recognition. For innovation to work, there needs to be an “ask,” (e.g., what are you looking help for) and then some bounds and process around “the ask.” There also needs to be a better system of attribution for new ideas – giving proper credit to the original ideator for ideas that become commercialized. Companies will also need to visually map idea flows within their organization and develop an understanding of their ability to absorb an idea and implement it.

We also talked about the future of work – with all aspects of work changing, including the worker (Millennials vs. Boomers), the work itself (processes), the workplace, and the way we communicate about the work. Ari believes that the future of work is really bright – with mobilization, globalization, data-driven decision making, and social initiatives. He also thinks that the Millennials/Gen Z (people born after ’95) have the potential to disrupt things more than anybody we’ve seen in the past. Here is a generation that never knew a world where the Internet did not exist, and the way they behave, play and integrate their personal and their business life is completely different from any other generation. Organizations have to learn how they work, how they innovate, and what they need or one of two things will happen – they will either innovate around you or they will leave. Gaming will also be incredibly important for the next generation worker with 95% of them being active gamers. They learn how to fail while gaming, and iterate around failure so that they’re successful. They also have a set of emotive qualities associated with gaming that are not usually associated with work – including curiosity, enthusiasm, joy, and enchantment.
Other things that we discussed include:

Other things that we discussed include:

• The need for CIO’s to run experiments in partnership with sales and marketing.
• How the business analytics groups will need to merge with the CIO organization if they are not.
• How CIO’s need to focus on adoption of social technologies rather than deployment.

Francoise is a long time IBMer. She started in their Physics Department after getting her PhD in Physics from Carnegie Mellon University. Following that, she took on more client facing roles, related to future technology vision, in the utilities and retail markets. She continued to marry innovation and technology in various positions until she took on her current role working for the CIO at IBM.

It is interesting to note that at IBM the CIO organization is a centralized organization that comprises 4 pillars. The first one is called Run, and that is where they run things – datacenters, telephone, applications, etc. Then there is the organization called Transform, where they own processes (e.g., supply chain, client facing solutions, etc.), the applications that support them, and the transformation of those processes. Next is security and cyber security, obviously an important part of what the IBM CIO is responsible for. The fourth pillar is the one Francoise is responsible for, that of innovation.

As part her responsibilities, Francoise owns all the tools, processes and programs that enable IBMers to become innovators and consume innovation. She also leads a team of developers whose job it is to identify and bring into production those technologies that can transform the way IBMers do their job. Innovation at IBM also includes mining big data for actionable insights – an emerging area for many companies. They don’t just analyze the static data stores they have, but also dynamic data coming from Twitter and their own internal social networks. She sees her role as partly being a service provider, and partly being a partner to other organizations.

Culture is an important aspect of Francoise’s job. It is fascinating that the culture at IBM is not based on a set of shared beliefs that came from the top. Instead, about ten years ago, they ran a three day Culture Jam to see if they could find a set of common things that defined IBMers worldwide. And they did find it, and to this day they keep reinforcing those values through reviews, measurements, and rewards. Remarkably, and because of that, they do not see much corporate culture differences within the various geographical cultural areas.

The three top values that result in the IBM culture are:

• Trust in every relationship
• Client centricity
• Innovation that matters to IBM and the world

At IBM, they practice this bottom-up approach across all areas of innovation– realizing that not all good ideas can come from the top. They followed the Culture Jam with an Innovation Jam and Jams are now an integral part of their innovation culture.

Francoise took the time to explain the differences between successful Innovation Jams and mostly unsuccessful bloated electronic suggestion boxes that many other companies implement. They are:

• Most suggestion boxes or idea management systems are not connected to the backend processes where those ideas are actually being implemented, measured for success, and brought into production
• Ideation systems often deal with only a small portion of the ideation process, that related to small ideas, and they clearly don’t connect with the overall innovation process.
• Good Jams are well prepared ahead of time, and extremely well managed after the Jam is over (with funding, pilots, measurements, decision points and eventually production for those ideas that make it) – and Jams are almost always time-bound (except for the continuous improvement/small idea programs).
• Successful Jams are either set up as business challenges or as well framed ideation campaigns.

Even though Francoise believes that it is really hard to predict the future, she closed our conversations with two predictions for big shifts – one being the potential for big data and the other being the future of work itself, and especially the future of the workplace.

Other things that we discussed include:

• The challenges with not being able to know ahead of time which technologies to invest in on innovation
• The Innovation Jam that led to the Smarter Planet concepts
• The issues related to generational gaps in the workplace
• How instant messaging totally transformed the way they work, and how it broke down hierarchies, when introduced 12 years ago
• The importance of second life and physical presence in a primarily virtual workforce
• How people cannot deploy their own tools, but how they can vote with their behavior between various alternatives

Dan has 30 years of experience managing global technology organizations, mostly within the financial services industry. Having first entered the job market when the debate between mainframe and desktop computing was raging, Dan has seen his share of technology innovation battles – which made it particularly interesting to discuss this latest battle between innovation and control taking place within most companies around adopting new technologies.

According to Dan, that balance between innovation and control has remained the hardest balance for CIO’s to manage. Between the increasing demands that organizations put on their IT departments and their CIO’s, the accelerating pace of change, and the ease with which employees can now bypass their IT department – that balance will become harder to manage, not easier.

The consumerization of IT, which refers to the phenomenon that consumer technology innovations are increasingly driving enterprise tools development, and also to the fact that many employees now expect their personal tools – their phone, tablet and home laptops – to work within their work environment, is clearly here to stay. The user experience that enterprise tools provide sorely lacks the experience that consumer services provide. Think of doing a Google search vs searching for content in your corporate knowledge management system, compare your corporate procurement process with the Amazon buying process, or look at how your corporate software provisioning differs from the experience you have in the iPhone or Android app stores. There is no comparison, and it is that difference in experience that leads to the consumerization of IT. CIO’s react to these forces in different ways – some say NO, and some put their head in the sand. Clearly neither one of those strategies is a workable strategy. Both will leave your users dissatisfied and relegate your IT department to irrelevance. CIO’s need to partner with key constituents and business unit owners and decide on strategic technical directions that match the culture of the company and deal with the risks associated with those strategies – human resource (HR) risks, compliance risks, legal risks, reputation risks, security risks, IP leakage risks, etc.

Risks are a thorny issue for many companies, and one that can stop innovations in their tracks. Many people, who by nature are averse to change, will hide behind potential risks, often unreal ones, to avoid having to deal with that change. In assessing risks, Dan suggests that people look at the Netflix manifesto about their culture, where they talk about a concept called the waterline. The way they look at decision-making and risk is that they think of their company as a boat, and they think of decisions being above or below the waterline. If a decision is below the waterline, then the risks of having something go wrong is much higher than if the decision is above the waterline.

We then talked about the changing role of IT and CIO’s as it relates to shifting their position from order takers to strategic business partners. CIO’s need to be the leaders who understand technologies and how they apply to the business. They need to be the ones that recommend and provide guidance on how to leverage social computing, mobility, universal access, cloud computing and “big data” as part of business processes.

Social computing should be on every CIO’s agenda, not because it’s a fad, but because eventually it will have to become part of every enterprise process and the systems that support them.

On the topic of measurements, Dan believes that there are two types of measurements – hard measurements and the anecdotal comparisons with peers. And while Dan is not a big proponent of hard benchmarks, which would require the ability to compare apples with apples, something that is virtually impossible in diverse organizations,  he does believe that comparisons with other people and companies in your industry are important. This makes sense in a competitive environment where the winner is the one that can stay ahead of the others. One of the most important measurement criteria for IT departments should be customer satisfaction, but that needs to be balanced with metrics that reflect the increasing strategic partnership that needs to exist between IT departments and the business units.

Culture trumps all and CIO’s should be thinking about culture as part of everything they do. It is what motivates people to do what they do, and it is what ultimately determines the effectiveness of all organizations. Dan believes that companies should listen to Daniel Pink when he says that people have three motivations, autonomy, mastery and purpose. They want to have a say in their destiny, they want to be recognized as a master in certain fields, and they want to be connected to a higher purpose. It’s important to have a culture that understands and promotes those values, both for your employees and also for your customers.

To create or change a corporate culture, you need to articulate where you want the culture to be, communicate it clearly with your employees, walk the talk, and reward and recognize behavior that supports that culture. The latter is especially important for IT departments, where metrics around on-time delivery and zero tolerance for failure have often stood in the way of creating a collaborative and innovative culture.

Dan ended the conversation with a few pieces of advice for IT professionals – don’t just focus on the bits and bytes, but focus on humans, their cultures and their biases; reach out to other disciplines like psychology and economics; think beyond your technical expertise when you think about the competencies that are needed to get your job done.

Well said.

Other things that we discussed include:

• How smart companies now deal with risks through a combination of education and guiderails rather than through policies alone
• The importance of e-discovery and archival systems in regulated markets
• The positive aspects of operating in regulated environments where everything gets recorded on business communications
• The importance for CIO’s to stay abreast of what happens to their industry by networking with peers
• How companies and individuals deal with innate human/cognitive biases like the confirmation bias

As CIO at Monsanto, Shirley is a member of the strategy team. Becoming a member of the strategy team came with a change in role for  IT – that from being an order taker to a strategic partner sharing responsibility for the business’s growth. They morphed from being the implementers of ERP systems and other technologies to a team that now worries about customer space transformation though information and technology, advanced decisioning, and customer and product pipeline. And while the IT department at Monsanto supports all functions, most of its resources are dedicated to R&D and the customer space.

Being a strategic business partner rather than a support organization requires a deep understanding of the business – that is why over 35% of Monsanto’s R&D IT group has science backgrounds with 10% having PhD’s. They don’t just support the product development process – they are a key driver of it. This shift from being a more traditional IT department not only required a whole new level of leadership; it required a complete mindset shift. If you would have asked a random person in IT what they were doing a few years ago, they might have answered “I am an Oracle DBA.” Today, you are more likely to get the answer “I support a system that helps us collect $3.5B in revenue.”  People now think of their jobs in terms of the value that it delivers to the company, which is not just great for the company, but also energizing for the individuals. And therein lies a virtuous circle – when people are more energized, you have more innovation, more creativity and thus more energy and excitement.

They have a metric-driven culture. Not just one where they focus on understanding the cost of transaction and other classic metrics, but one where they measure the outcomes and values of technology usage. So they will measure the value of being able to assemble a genome on their product pipeline and their ability to commercialize products. A dedicated, and very agile, enterprise information management group helps them do that.

Word of mouth is very important in the agricultural space – with most of it happening in coffee shops. As some of those conversations are moving online, it will be very important for Monsanto to have a seat at those virtual coffee shop tables. That is one reason why Shirley thinks there is a lot of value in having employees be active in communities and social media. They are still in the early days, but plan on developing this capability in the future.

Monsanto is of course known for its culture of innovation – which is driven by its overarching goal to double the yield in agriculture within the next few years. They are passionate about innovations that impact sustainability and they think really big when it comes to their mission. This “change the world”  type attitude makes for a great innovation culture – one in which people constantly think beyond the boundaries. It also helps with the type of people they attract to the company.

Monsanto actually started an innovation lab – which is unencumbered by corporate standards – and where people can work on getting early proof of concepts. Employees first submit ideas to peer review, after which a VC-like board approves funding for further development.

Innovation at Monsanto is not contained to its corporate walls – they also co-innovate with suppliers and academia. Cross-enterprise innovation takes a lot of effort on both parties, and there always needs to be clear win for both of them.

Another interesting aspect of Monsanto’s culture is the fact that they are  non-hierarchical. They have been operating that way for 15 years and they seem to be one of the only companies that has been able to achieve this at scale. Solid lines and dotted lines like you would find in typical matrix organizations are non-existent – everyone has multiple solid lines. Those employees that come from more structured organizations take a while to get used to this non-hierarchical structure, but ultimately it makes for a great place to work. People know that they can walk in and talk to anyone, including the executives.

In closing Shirley had a few words of advice for executives at other companies – CIO’s need to step up and take ownership for things that they traditionally would not have done before so that they can have a bigger impact on the business, and they need to take more risks.

Well said – Shirley is clearly a 2.0 CIO.

Other things we talked about include:

• What worked and did not work with the “two-in-a-box” concept of pairing up a business leader with a technology leader
• The consumerization of IT and how all companies will have to be ready for that
• How they deal with risks, like IP leakage risks, through awareness and education
• The importance of being active on a local community basis while being a global company
• The role of rewards and recognition within an innovation culture
• The importance of a successful collaboration culture in an innovation culture
• The role of values and the importance of reinforcing those values to ensure a good corporate culture