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Purposeful Innovation

Innovation That Matters – Substance Over Style

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This the time of year when organizations (companies, departments, and teams) review their performance from the previous year. Breathless presentations are made to upper management and/or the Board of Directors, in late December or early January. Typically, the IT department will go through their projects and talk about how many significant chunks of work got done that helped move the company forward.

I’ve noticed when some folks talk about accomplishments for the last year, they’ll make a point to mention all of the techno-buzzwords in vogue – for 2007, try Web 2.0, wikis, blogs, and collaboration – to illustrate how the company is innovating. Boy, are they missing the point!

A little of this, a little of that ...

If your firm is not into consumer products or a direct-to-consumer sales, if you don’t do professional services, pure research, or other knowledge-intense activities – how much does Web stuff really drive your bottom line? Ever since the Internet boom of the 90s, Web technology has tempted and teased many brick-and-mortar companies (and middle managers) with dreams of explosive stock valuations. But in reality, this technology has only chipped at the edges of how many of these organizations really make their money, and how Wall Street really values them. The block-and-tackle ERP systems, supporting fundamental, value-adding processes like supply chain, order management, sales and marketing, and distribution, is the technology that’s relevant and meaningful to the business.

So why not talk about the innovative stuff you’ve done with ERP? How about the make-to-stock company that wants to get into mass customization – you can configure most systems to handle make-to-order, but can you also change your product data, order management, manufacturing and distribution processes?

What about IT alignment with new management principles? If your company has committed to Lean Manufacturing principles, can you adapt Agile project management and software development techniques, and bring them into your IT organization?

I know – you did deliver on this (and more!) – so don’t sell yourself short! That’s real innovation that actually means something.

  • Innovation with new investment (time and money) in tools and delivery mechanisms is “interesting” – maybe you’re delivering productivity or cost reductions, delivering incremental benefit that’s “appreciated”
  • Innovation that leverages existing investment (established systems) to deliver new business models and streamlined processes is “transformational” – delivering real step change benefits that are desperately needed!

Don’t fall into the techno-marketing trap that the only way you can innovate is using the latest and greatest stuff. Words like wikis and blogs are fun to say, but I prefer terms like 30% annualized growth, category killer, lower inventories with higher customer service, and market outperform.

So does my boss … and the BoD …


2 comments for “Innovation That Matters – Substance Over Style”

  1. No doubt a well configured and used ERP system is a fundamental backbone for the well run enterprise. But don’t you think that an integrated Order Management (otherwise known by the “ecommerce” website can deliver real value to the bottom line?

    Posted by Sam Bayer | August 11, 2010, 1:28 am
  2. Fair and valid, Sam – I do admit to having a bias towards enterprise systems and the supply chain over the last few years.

    Actually, I think the only way you can do something that requires a descriptive like “30% annualized growth” is going to come on from customer-facing innovations (i.e. Order Management). It’s tough to cut costs and get those kinds of returns.

    Posted by Jim MacLennan | August 11, 2010, 12:23 pm

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