In my recent report, “Contracting for Innovation With Service Providers,” I argue that many sourcing and vendor management professionals have difficulty contracting for innovation, because the term “innovation” itself is elusive and subject to interpretation.
In my research, I note that for sourcing professionals to effectively contract for innovation, they need to be able to understand the business objectives of a broad base of internal innovation stakeholders – and consider whether their service providers can align with these objectives. In the report, I considered the needs of three primary stakeholders – IT, business, and executive-level stakeholders.
But there are far more innovation stakeholders. After writing that report, I decided to review all of Forrester’s inquiries related to innovation over the past year to see if I could identify other innovation stakeholders. After a review of about 500 detailed client inquiries about innovation, I’ve compiled a list of categories I have seen.
This list of innovation interests is quite diverse (and this is just a preliminary summary!). But the exercise helps us see how innovation is interpreted differently by different parts of the organization. With this information, we can identify unique innovation objectives and have a much more informed discussion about what innovation is and how it is generated (eventually leading us to conversations about specific topics like structures, metrics, and goals).
One of the recommendations in my new report, Web Site User Experience 2010: Australian Banks, is that Australia's "big four" banks should study online retailers as as precursor to fixing their own broken website search systems. At present, these banks serve up a hodge-podge of media releases, FAQs, customer memorandums, product pages and more in their search results, giving users little clue about which search results they should click and why. By contrast, leading online retailers provide highly usable search results, which they help users to effectively preview, sort and refine.
But banks are far from the only businesses that need to look beyond the narrow confines of their own industry.
For example, when speaking with pharmaceutical marketers in Sydney yesterday, I was reminded that almost no Australian marketers in that industry set aside a portion of their budgets as internal seed capital, funding marketing experiments that are small enough to fail gracefully, but audacious enough to perhaps exceed all expectations. Big pharma, at least in Australia, could learn from how the leading global consumer packaged goods companies are supporting marketing innovation with devices like internal seed capital.
Over the past few months, I had the opportunity to interview representatives from 10 leading technology service providers about how they help their clients innovate. My recent research summarizing those interviews is available to Forrester clients on our website. For those interested in the high level points I raised, here are a few of the key findings:
Gary Hamel states in his famous book "The Future of Management" that management has become a maturing technology that has evolved rapidly in the first half of the 20th century and now reached a local peak. I found this intriguing and since I started my research into the consulting services market it has been the maxim of my work.
My journey began in 2008 with doing extensive research on the evolution of management over the past 100 years. We identified the key management paradigms and models and defined what a paradigm and model in management basically is. This analysis led to the first report "Innovating Strategic Management Paradigms And Models To Thrive Amid Global Change". At this time however, we focused primarily on industry and academia-driven paradigms and models.
During a recent set of interviews with IT service providers on how they help their client’s innovate, I had the opportunity to speak with K Ananth Krishnan, CTO at Tata Consultancy Services (TCS). Ananth described to me what I consider to be one most progressive innovation programs I encountered during these interviews – it was consistent with TCS’s capabilities, holistic in scope, and has the potential to be a important part of the company’s long-term evolution.
A few key findings from my discussion with Ananth:
Advice to PMs about how to do their jobs better is valuable, up to a point. Inspire PMs to be stronger, better, faster. Delineate all the important contributions they might make. Arm them with advice on how to make these contributions. None of this guidance will have any substantial effect if PMs don't have the backing of their employers.
A prime example is PM's role in innovation. PMs are usually better positioned than anyone in a technology company to answer critical questions about innovation such as, Is this a good idea? If so, what's the market for it? Can we operate in this market? And so on.
Unfortunately, opportunity and reality don't always meet. Maybe the PM raises these questions, but can't get the answers. Or, the PM has the answers, but the organization isn't inclined to listen. Frequently, the innovation process—or, more accurately, the lack of process—doesn't give the PM the opportunity to ask and answer these questions at all, particularly as an idea gets momentum in the development cycle. (For instance, try pulling the plug on a CTO's pet notion, once development is underway.)
Leadership doesn't just happen, just as innovation doesn't just happen. Just look at the history of the US highway system.