Just like lapels and skirt lengths, management concepts go in and out of style. Consider the concept of innovation. In the glory days of the dot-com boom, there was no better compliment a company could earn than that it was innovative. But in the post-boom, post-Enron era, organizations shed the innovation association more quickly than men ditched Nehru jackets after the '60s. Innovation was viewed as costly, risky and almost a luxury as we entered the 21st century, and the more sober and responsible focus on cost cutting and efficiency became the fashion.
Well, innovation is back -- at least according to the most recent IBM Global CEO study, which was released earlier this month. "In a volatile, competitive, globalized environment, the discussion is about growth and efficiency -- and innovation is the way you do both," remarked Ginni Rometty, IBM's SVP, Enterprise Business Services, who presented the study. Sixty-five percent of the CEOs who participated in the research said that because of competitive pressures and market forces, they plan to radically change their companies in the next two years. "Business model innovation is [viewed as] strategic differentiation," Rometty said.
But innovation is a bit different this time around. It's not just about new products and services, Rometty noted, but also encompasses business model innovation, process innovation, culture innovation and management system innovation.
Furthermore, innovation is not the sole domain of the "visionary" (another retro concept from the dot-com days) executive, although the CEOs surveyed by IBM acknowledged they have primary responsibility for fostering innovation. "Innovation is not moments of brilliance," Rometty noted. "Sustainable innovation is driven by culture." In fact, according to the research, collaboration -- particularly with external business partners and customers -- was viewed by more than three-fourths of the participants as the top source for new ideas.
But, as with all fashions, not everyone can pull off the current style. While two-thirds of the CEOs in the study believe their organizations must transform, only 20 percent of the executives indicated that their organizations had been successful at managing change in the past. They point to culture as a key impediment. So we should expect to see some extreme makeovers soon.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio