Fractals of Innovation

May 21 2010

Re-thinking: CIO Role in a 21st Century Corporation

Category: Leadership — Surendra Reddy @ 11:55 pm Comments (0)

There has been lot of discussions about the role of CIO in 21st century enterprises. While some pundits strongly argue and make their predictions on slowly diminishing role of CIOs – some strongly believe that CIOs should play a strategic role in shaping and preparing the enterprises for 21st century.

Peter Drucker wrote many books and papers about the role of information in building sustainable and competitive organizations. Even after a decade of such prediction, role of information is getting ever more important than before. Peter Drucker wrote,

“Increasingly, a winning strategy will require information about events and conditions outside the institution: non-customers, technologies other than those currently used by the company and its present competitors, markets not currently served, and so on. Only with this information can a business decide how to allocate its knowledge resources in order to produce the highest yield. Only with such information can a business also prepare for new changes and challenges arising from sudden shifts in the world economy and in the nature and content of knowledge itself. The development of rigorous methods for gathering and analyzing outside information will increasingly become a major challenge for businesses and for information experts.”

Technology is becoming integral part of the business. In 21st century, CIOs and their teams need to play a much broader and expanded business role sharing leadership of technology with business peers as well as acquiring responsibility for many of the firm’s shared services. CIO also need to find an inspired ways to recruit and retain the best and the brightest new talent who will be eager to solve problems and who speak the language of populist technologies as a first language. CIO who can’t see them playing this role should begin now to change the profile of themselves and their teams or see their role ever more marginalized.

One of the major issues I have seen last 10 years working in various management roles, technology teams lacks the necessary business knowledge and ability to map the great technology to business opportunities. To build a successful bridge between the technology and the business, CIOs have to play a significant role in boosting the business knowledge of their teams. It is time to transform a tech-oriented staff into one that has the requisite business skills, including negotiation, strategy, or financial analysis. These are very essential skills required to align the business and IT.

CIO’s need to play a bigger role in strategy execution rather than focusing more of their time on technology selection and operations. I have seen so much of friction between technology and operations. CIOs focus lot of their time and energy trying to align the technology and business. In my view, first thing that CIOs should report to CEO. CIO should play a bigger role in helping CEOs with necessary tools and frameworks to integrate critical information flows from the Information Systems to Business Systems and vice-versa. Also, CIO should focus more on forming networks of supply partners, tapping them for new ideas, engaging them to broker cross-industry lessons learned, and with them, establishing a responsive ecosystem of providers.

Paul Saffo summarized the state of machines, complexity of tools, and exploding information in his HBR article, “Are You Machine Wise?”

“As our tools become ever more complex and interconnected and more central to the conduct of business, their benefits also become harder to recognize. Furthermore, executives need to know and understand the logic of the work done by machines—and, above all else, the limits beyond which those tools cannot be pushed. Meanwhile, the volume of information continues to expand exponentially, generated by machines conversing with other machines on our behalf. Every business activity leaves behind a wake of information, from data spinning off production-line process controllers to transaction records generated over retail-credit-card networks. And the growing centrality of the Internet for business purposes will only add to the flood.”

Finally, CIOs need to think technology from the business perspective to help CEOs position the company for competitiveness — their firms’ differentiation of products, services, and business models. Technology itself is not a differentiator unless it align with the business. So, CIOs need to think differently – just technology perspective is not enough and they need to start creating value for the businesses. I think CIOs can play a very influential role in bridging the customers, suppliers, partners, and innovation channels by aligning technology from business perspective.

What do you think?

TAGS: CIO

Oct 24 2009

Views and Experiences: Growth by Innovation or M&A?

Category: Leadership,Strategic Management,Strategy — Surendra Reddy @ 8:58 am Comments (0)

John Furrier kicked-off an interesting conversational thread on twitter: Grow through innovation or M&A interesting discussion going on here; re: Cisco vs Juniper – two different visions on growth. Jake Kaldenbaugh, Susie Wee joined me in the discussion. I have summarized my thinking and position on M&A vs Innovation driven growth strategy. My argument is that success in Innovation and M&A driven strategies combined with optimal use of financial engineering is the best guarantee of thriving in good times and bad times. Companies decided to choose only innovation or M&A or financial engineering tend to destroy its value as opposed to creating value. Welcome your comments and wisdom to shape my thinking and practice.

Growth

Growth is a worthy goal. Not very long ago, earnings just more than the cost of the capital was the mantra to measure the growth of the companies. Many companies worked hard to make their assets sweat. But, changing times and changing market conditions drove investor’s thirst for ever higher returns. Then came the next generation technology companies and changed the market expectations. Now, same investors no longer happy with earnings at cost of capital. They are demanding unattainable growth targets. It is practically impossible to meet the rising expectations of shareholders unless companies innovate to create the wealth – that too in a way competition can’t follow you quickly. You can’t buy the innovation “off-the-shelf” through M&As.

In the continuing quest for business growth, many companies are turning to three compelling sources of growth: Financial Engineering, Innovation and Integration (M&A). Growth through applying financial engineering practices by getting rid of bad companies, “toxic assets”, share buy backs, returning cash to shareholders, and downsizing only lasts for short term and are used for instant cure for slow growth syndrome. Where Innovation is not only about developing new generations of products, services, channels, and customer experience but also conceiving new business processes and models. M&A or Integration enables them increase capacity, improve performance, lower cost structure, and discover new business opportunities.

Susie Wee (@susiewee) wrote,

Organic growth reqs commitment to productization/M&A reqs commitment 2 integration. Each has a place & needs to be “done well”

Growth is no substitute for radical innovation. But “durable growth” is a derivative of radical innovation. Focusing on growth rather than on the challenge of innovation is more likely to destroy wealth. Don’t mistake financial engineering for radical innovation. At the end there will not be any more wealth to unlock. You don’t need leaders to unlock the wealth – instead you need leaders who has fire-in-the-belly to create lightening rods of radical innovation. Innovation and integration, together, allow an enterprise to acquire more customers and deliver more goods and services to market. My argument is that success in all three is the best guarantee of thriving in good times and bad times. If companies choose to go with either one of these strategies and stagnation can doom a business. Successful execution of either of these strategies is not an easy task. It needs discipline and senior management commitment. It strongly depends on companies’ ability to collaborate across organizational boundaries.

Companies that can grow their top-line by giving away value at close to zero profit are spinning their wheels without much of progress. How long they can survive?

Innovation Driven Strategy

Unless companies institutionalize the innovation activism, they are unlikely to meet the challenges: Reinvent itself and re-inventing its industry. Apple is such a great example of an innovation driven company. How many acquisitions Apple made recently? I guess close to none. Is apple creating wealth or unlocking wealth? Apple created huge wealth through radical innovation. My assessment is that Apple was able to re-imagine its deepest sense of what Apple is, what it does, and how it competes. That made them very unique company in the Valley. Customers love their products. They don’t even mind piercing their bodies with tattoos of Apple’s logo. What is driving such a stellar performance of Apple? I bet it is constant, restless, and relentless innovation with new products their customers love without damaging their price position and the brand.

Susie Wee (@susiewee) wrote,

@Furrier @Jakewk @sureddy Driving innovation to product in a company is an art. Requires strategy, opportunity, timing, and luck.

@sureddy Actually I prefer the word “fortune” over “luck”. You can have some impact on your fortune.How important?Very… @Furrier @Jakewk

@sureddy Moving innov to market in BigCo requires many functions-mktg,r&d,GTM,supply chain,ops-to execute in concert. @Furrier @Jakewk

@sureddy Fortune/Luck is when the innovation matches needs/strategic directions in multiple functions at the same time. @Furrier @Jakewk

Many companies fail to create the future not because they fail to predict it but because they fail to imagine it. Companies stuck more often with their heritage and failed to distinguish between the heritage and destiny. As Jake Kaldenbaugh pointed out, in many companies the premium placed on being right is so high that there is virtually no room for imagination or looking for the unconventional wisdom. These days strategies of many companies looks alike or hardly any difference. Outsourcing was another powerful force for the strategy convergence. As companies outsourced more and more made their strategic differentiation narrower and narrower. They are focused for short term and compromising their long term vision.

Jake Kaldenbaugh tweeted his interesting view on Innovation Strategy:

@sureddy @susiewee @furrier Organic is still a funky art in cos. Have hard time doing both product & GTM development.

@sureddy @furrier Successful internal R&D growth strats tend to run in cycles for cos which tells me they may be based on leader ie S. Jobs

@sureddy @furrier @susiewee I think corp incentive systems interfere w/ internal innovation. Y so much reliance on VC & M&A in SV.

Without a radical innovation, companies are devoting a mountain of resources to molehill of differentiation. Unless companies become more adept at innovation, more imaginative minds will capture tomorrow’s wealth. We see this all the time. Companies started in garages tend to break the records of all time. What is driving these small companies to achieve such an outstanding performance or results? Their ability to de-construct and re-construct their business models at the speed of light. When its most effective, radical innovation makes their competition irrelevant. It isn’t about competitive strategy. It is not positioning against competition. But making competition irrelevant. If it is not different, it is not strategic any more.

Cisco and M&A Driven Strategy

Companies like Cisco realized that much of the innovation that will shape the future of their industry is occurring outside of their organization. Cisco viewed hundreds of startups that created every year as potential sources of innovation to be exploited. They adopted totally different strategy. They co-opted the insurgents. They are innovators in one sense realizing that the ultimate value of their acquisitions is not the integration of technology or products but unlocking the huge wealth in the contribution it makes to Cisco’s entrepreneurial energy. In my view, Cisco enabled different level of Innovation through a perfect blend of serendipity, genius, invest commitment, and sheer execution focus. I tend argue that Cisco legitimized, fostered, celebrated, and rewarded the nonlinear innovation. I may be wrong. But, my strong sense is that they created an ecosystem where virtuous mice(startups with great ideas) and wealthy elephant(Cisco with ton of money and passion to harvest these startup ideas) lived happily ever after!

@Jakewk Cisco’s competitive strategy is at odd with engineering and product strategy has been for years – they fill holes not advance tec

Cisco has worked to make acquisitions a routine process, as route as the product development. Kind of open their eyes and ears to look for new innovations part of their strategy. This strategy worked well for Cisco for reasonable amount of time.

Jake Kaldenbaugh replied to Cisco’s M&A vs Innovation strategy:

@Furrier Re: Cisco filling holes v. adv tech: Sometimes systemic integration can be innovation IMHO.

Does this strategy work for long run? Is it sustainable? In my view, I think they also reached the point of inflection. For every strategy there is a decay unless it is constantly refined and reinforced. And I am sure Cisco started to experience this too. It is rather very difficult to scale this strategy for ever. The complexity of trying to manage these different business units soon will overwhelm the advantage of integration. Though M&A helps eliminating the competition vs making their competition irrelevant. Companies that focus on this strategy, soon end up with an unsustainable or strategy decay. What do they do next? Then they go and spin-off or de-mergers or break them into small companies. Or get rid of the bad apples. All these would lead to the circus of financial engineering to unlock the shareholder wealth. Never forget that good companies gone bad are simply companies that for too long denied the strategy decay or trying to over reach their growth without any strategic differentiation.

Conclusion

Don’t mistake financial engineering for radical innovation. At the end there will not be any more wealth to unlock. Companies need radical innovation to create more wealth. Successful innovation needs discipline of innovation, senior management commitment, and depends on companies’ ability to collaborate across organizational boundaries. Innovation and integration, together, allow an enterprise to acquire more customers and deliver more goods and services to market more rapidly making competition irrelevant. My argument is that success in both combined with optimal use of financial engineering is the best guarantee of thriving in good times and bad times. Companies decided to choose only innovation or M&A or financial engineering tend to destroy its value as opposed to creating value.

TAGS: Growth Strategies, Innovation, Strategic M&A

Aug 24 2009

When we were sleeping ….

Category: Globalization,Leadership — Surendra Reddy @ 4:37 pm Comments (0)

…. a massive earthquake reduced the financial world to rubble. First, Globalization changed the business landscape – intensified global competition energy constraints, and politically instability will keep the tectonic plates keep shifting all the time. Second, the global economic crisis also challenged the long believed notion of market’s invisible hand serves as an instrument to correct the imbalance. Uncertainty is an opportunity for those who are prepared. Third, more and more government regulation is creeping into corporate governance. For foreseeable future, government is going to take a keep interest in how businesses are run. We all need to learn new skills and mind-set that will allow us to partner with government than fend it off. Finally, we, human beings, are fundamentally irrational and motivated by unconscious cognitive biases. Even after we emerge from the recessions, our, as consumers, behavior is now shifted more towards thriftiness and desire for simplicity.

When the economy recovers, do you think things will be back to normal as usual? Would like to hear your views and experiences dealing with crises, managing crises, and managing collaboration and innovation without loosing our competitive edge.

Share your views, experiences and stories.

TAGS: 20:21 Leadership Network, Globalization, Leadership

Aug 22 2009

Do You Twoodle?

Category: Leadership,Learning — Surendra Reddy @ 5:16 pm Comments (1)

What a week! I have been struggling this week (and many weeks, may be months, before) to focus on too many problems – there are way too many problems. Some problems are breeding new problems. I am less than pleased with Status Quos or Sacred Cows. Nor happy with mediocre results. Since I left Oracle in 2003, I can’t settle for anything less than exceptional. I set my bar so high. All these inspire me to take the road less travelled by. This weekend I am going to force myself in a meditative state to force my mind to gather together conscious thoughts from all that is happening around me and vast unconscious information to create something radically different. I know I need to slow down and give my mind a chance to let creative juices flow in.

I know I have been living in my analytical mind and missing out on the creative musing that opens up to new ideas. It is a beautiful Saturday morning. I took a long walk. When I go on a walk, my mind leaps ahead of my educated incapacities and present me with vivid images and ideas out of nowhere. There is no doubt that walking alone leaves the mind free to observe and dream. I believe it is more important that we get out and walk whether alone or not. If you are suffering from too much of educated incapacities, take some one with you for a walk to enable you to see something unusual or particularly interesting(not just gazing at things – open your mind and heart to see things not visible to your naked eye). Sharing these things can add to our experience. Pick a walking partner who will allow quiet spaces along the way. Or simply walk alone.

This is something I do all the time. If I can’t solve any problem, I take a long walk and come back and to my surprise I can find a better solution. If I get stressed up, I take a long walk. I love to see my mind wander and come back with random bits and bytes of ideas. I am wondering all the time how should I create a space for my alpha waves in my brain and stop letting my brain take a ride on theta (drowsiness) and delta (deep sleep) waves. Walking with constant inflow of new images and ideas, give us new thoughts that nourish us. It replenishes our over tapped creative well and gives us a sense of whatever you call it. We are reminded we are a physical being who is part of something far greater. It opens our senses to the world around us and to the world within. We become larger than we were, something more. We see with perceptive eyes. We become aware of our self in the greater scheme of things. We create a fertile ground for fostering creativity, imagination, and compassion.

I am sitting in my backyard and carefully listening to the bird chirps. Every time I sit and listen to bird chirps or watch bird fly in formation, that generate huge burst of alpha waves and inspires me to wander all over the place I never wandered before. What a great refreshing morning? I can see grass grow. I can smell the things I can’t smell before. Though clouds out side pulls me back into the musings of Cloud computing, I am trying to control my thoughts to stay with me and listen to my heart.

I have a very bad habit of journaling. i write everything that comes to my mind. I let thoughts come in without an immediate purpose or with any pressure to accomplish. I write something. It doesn’t matter if I grumble about something – planning my next week or describing a view out side of my library room window musing at the mountains. I believe that writing let go of those unresolved things that fill my mind. It then gives me a tool for gathering my insights and dreams as well as sorting things out. Sometimes regrets and irritations would dominate most of my notes. As I let those accumulated latent energies to flow out, then I started to create more room for appreciation of the beauty around my creative thoughts and me. I am reading through volumes of these notes and started to see solutions to most of the problems I have been trying to solve for weeks, if not months.

I feel so relaxed! Go twoodle (I coined this term meaning “act of taking a long, inefficient, happy idling, dawdling and puttering without using Twitter, Google, and Web searching to generate bursts of alpha waves to simulate creativity, imagination, and compassion“) then?

TAGS: Educated Incapacities, Inspiration, Leadership, Reflection, Self-Awareness, Twoodle

Aug 20 2009

Leaders in the crisis

Category: Leadership — Surendra Reddy @ 2:54 pm Comments (0)

According to McKinsey(McKinsey August 2009), Many executives have found it difficult to look beyond addressing the short-term effects of the crisis. More notably, satisfaction levels are markedly lower when executives rate their overall performance. Relatively few executives are pleased with their performance when it comes to positioning their businesses for growth, retaining and attracting talent, and developing leaders—areas that are important for their companies’ chances to thrive after the crisis. Carving time out of operating routines to address these issues will be a key to recovery. Further, satisfaction levels drop even more dramatically when respondents rate the performance of their bosses. Twenty percent of C-level and senior executives and 30 percent of middle managers aren’t at all satisfied with their superiors’ performance—another indication of middle managers’ overall lack of connection to their current companies.
Areas of concern to executives include:

Maintaining good relationships with external stakeholders, shareholders
Controlling financial and operational risk
providing inspirational leadership
Retaining, attracting talented people
Positioning company for growth
Developing people’s leadership capabilities so they can manage crisis
Downsizing to cut costs

TAGS: Leadership, Strategic Management

Aug 06 2009

No Sacred Cows: They Trample Innovation and Graze Productivity and Profits.

Category: Leadership — Surendra Reddy @ 5:30 am Comments (0)

Companies today are working in an environment of incredible change. The customer base is shifting, technology is constantly changing, margins are shrinking and competition is stiffer. Whether change is abrupt or gradual, the rules that once worked have become outdated. Ignoring that reality is so devastating. The key to success is change readiness. Forget about re-engineering, downsizing and all those other fast-track panaceas prescribed for corporate ills. The first step to change is to identify and eliminate the “Sacred Cows” – all those hallowed practices, dead ideas, pet projects, outdated policies, unnecessary policies that don’t work anymore.

I can find Sacred Cows everywhere in offices and in the minds of people. Sadly, we continue to worship our sacred cows. Herds of sacred cows grazing on profits and choking off productivity. They are trampling creative and innovative thinking, inhibiting quick response to change and costing money and time. I see people reluctant to come out of their comfort zones- they knew so much about what they knew and they were last to see it differently. This intellectual inertia causes us so many problems in our ability to see things differently as well as our ability to respond the vibrant changes in the market place quickly.

Educated incapacity is an acquired or learned inability to understand or even perceive a problem, much less a solution. The more expert the person is, the less likely that person can see a solution when it is not within the framework he/she taught to think. When a possibility comes up that is ruled out by the accepted framework, an expert is often less likely to see it than an amateur without the confining framework. Everyone suffers from educated incapacity because everyone has a stake in the status quo of his/her discipline. We have a stake in what we know. We are paid for what we know. If we thought it all was going to be made irrelevant tomorrow, we would feel threatened. Everyone can get up to speed on the learning curve, the real problem is that we have trouble getting up to speed to forget. How can we change this? Spotting your sacred cows and rigorously probing into its trajectory makes you challenge those established notions. It immediately opens our minds to alternative ways of thinking that make more sense.

Creating Sacred Cow Free Culture

Think about the big, important problems and focus on doing work that matters. Don’t get bogged down in the minute details and the short-term view.
Regular reflection and lateral thinking about ideas, solutions and product and evaluate how that fits in with reality.

It’s surprising to notice that how often people miss the critical facts that could make all the difference. We may be so biased to get information only from the people with the same point of view. Start questioning or rigorously probing any preconceived notions or past experiences(educated incapacities) or refusal to confront a problem because they can’ see a solution. New ideas and new thinking start to emerge.

Jul 10 2009

Who Needs Charisma?

Category: Leadership — Surendra Reddy @ 5:33 pm Comments (0)

” Great leaders move us. They ignite our passion and inspire the best in us. When we try to explain why they are so effective, we speak of strategy, vision, or powerful ideas. But the reality is much more primal. Great leadership works through the emotions.” …Daniel Goleman in Emotional Intellitegence

This week’s Time published an article on Leadership: Who needs Charisma? Take away from this reading is:

Take responsibility. Leadership means you don’t duck when things go wrong. Young or old, handsome or plain, quite or loud – the surest way to win followers is to convince them that when the going gets tough, you won’t run and hide. You step in and take responsibility for it.
Don’t worry about your looks. It’s what you do that counts. Your looks may fool your adversaries but you need to be contextually aware and cognizant of the situation to make your different
Self-Reflection. It is very important to remember who you are, what you are, who you lead and what you lead. Different situations require different styles. When leader understand the nature of their followers they can get away with an awful lot.
Stop Talking. Start Acting. Good speech can only get you so far. That’s all. But your actions and your decisiveness is what matters the most. Leaders needs to have a courage to make quick decisions – not spending forever looking for the perfect decision.
Persistence pays off. Try, try, and try again. never give in. Resistance in the face of adversity is a key quality in a leader.

Bottom line

A great leader’s charisma makes us all into believers. But where does the truth lie between the personas that a leader presents to us and the one we are never privy to. Does it matter?

Yes, It does matter. Leader must be authentic in his/her integrity, in his/her understanding of his/her connections to, and his/her empathy with the people he/she leads. Leaders should see what’s right and possible, not for what’s missing and wrong, and move from strength to strength rather than always trying to identify and fix what’s wrong. You should focus on designing the ideal of what should be rather than envisioning the what might be. Achieving the sustainable destiny is the key. Imagine the future and elevate the strengths, achieve high engagement with your team, create magnetic working environment with strong bonds and a culture that attracts and keeps the best talent.

Dance of Innovation

Category: Leadership — Surendra Reddy @ 12:23 pm Comments (0)

Rapid Innovation is a Way of Life. It is a dance – series of steps and a particular rhythm. If you get an idea, you need to run a very quick and dirty test of your idea. Immediately after your initial test, you need to ask yourselves: “What happened? What can we learn from that test? What can we do differently next time?”. Then get on to next steps you discovered from your reflection process. Do this again and again. After a while (It is fun doing it. you may face so many challenges. never ever give up or quit refining your ideas. It is like learning your first steps. You need to try relentlessly until you get good at it), you get a good at it. Then you go develop a rhythm – that is where rubber meets the road and real innovation starts to occur. True innovation is not a cool idea – it is what we learn when we observe what goes down when we actually test our potentially cool idea.

May 24 2009

4 Pillars of Leadership: Framework to Sustainable Effectiveness

Category: Leadership — Surendra Reddy @ 7:17 am Comments (0)

May 23 2009

Seeing the Mighty Oak in the Acorn

Category: Leadership — Surendra Reddy @ 3:38 pm Comments (0)

Discovering the Ability behind Creativity, Leadership, and Success
In most of my past counters at my job, before attending my management program at Kellogg, I looked for “needs” or “gaps” in skills to help fill gaps or solve problems. Because we looked for problems, we not only found them but helped them bigger than they were before. We all focused more and more discovering problems. Prof. Uzzi’s New Science of Leadership is a great learning experience and an eye opener for me. I realized that I had placed the spotlight on problems. I started to explore what’s working well or what are our key strengths. This is my first encounter of three decade old methodology, Appreciative Inquiry, to put to practice at my work. Appreciative Inquiry is a way of thinking, seeing, and acting for powerful, purposeful change in organizations. Appreciative Inquiry works on the assumption that whatever you want more of, already exists in all organizations.

When leaders see what’s right and possible with positive core, and move from strength to strength(rather than always trying to identify and fix what’s wrong), leaders can move from discovering the best of what’s to dreaming or envisioning what might be to achieve a sustainable destiny through new form of intelligence called Appreciative Intelligence.

Appreciative Intelligence is the ability to perceive the positive inherent generative potential within the present. It is an ability to see a breakthrough product, top talent, or valuable solution of the future that is currently hidden in the present situation. Appreciate Intelligence offers a new perspective on successful people and provides a roadmap for those who want to realize their full potential. It also offers another perspective on what it means to be smart or intelligent. There are three components of Appreciate Intelligence:

Reframing: Framing is the psychological process whereby a person intentionally views or puts into a certain perspective any object, person, context, or scenarios.
Appreciating the positive: This refers to a process of selectivity and judgment of something’s positive value or worth. Successful people have a conscious or unconscious ability to view everyday realty – events, situations, obstacles, products, and people – with appreciation. Because they are reframing to see the positive, they often see talents or potential that others might miss.
Seeing how the future unfolds from the present: People with high appreciative intelligence connect the generative aspects of the present with a desirable end goal. They see how the future unfolds from the present.

As we imagine the future and elevate strengths, we achieve high engagement and creative magnetic work environment with strong bonds and a culture that attracts and keep the best talent. Appreciate Inquiry generates images that affirm the forces that give life and energy to a system.