Optimization vs. innovation – do you have to choose?
The IT leaders I know are all facing the same struggle: “How do we ensure operational excellence and still find the time and money to innovate?”
Their dilemma is echoed in the 2019 State of the CIO Survey published by IDG, in which a staggering 80% of respondents reported difficulties balancing innovation and operational demands (an increase from 73% last year).
This dual pressure is significant: cut costs and gain efficiencies, yet deliver meaningful innovation on minimum investment. It can feel like CIOs are being asked to make lemonade out of broccoli, given that the skills required to optimize and innovate are vastly different.
By nature, innovation is fluid. It requires an entrepreneurial mindset and the ability to shift gears on a dime. Meaningful change is revealed through trial and error, so failing fast is essential.
Optimization, on the other hand, requires stability. You cannot perfect something that is constantly changing. There must be a measure of consistency, a baseline of expectation, from which to measure and implement improvements.
The question is, how do IT leaders strike a balance between the two? Can an organization innovate while gaining efficiencies?
Here’s a couple of tips to get you started.
Use your data to reveal untapped value
Part of becoming a data-driven organization is learning to use your data in new ways. You can reveal opportunities for innovation and optimization just by re-examining data about key elements of your IT organization.
If you’ve been using a certain set of organizational performance metrics for the last four years, don’t settle for a standard review of the same old metrics in 2019. The world has changed, the market is more complex, IT is a different beast. You’re going to need to mine new data to evolve your outlook, find new efficiencies and fuel innovation.
At the same time, assessing your organizational data will help you determine how much time, money and resources you’re allocating to maintaining your current technology stack. Compare the cost to the value those systems are delivering to your organization. Does it seem proportionate? Is it too high, or possibly too low?
If you want to cultivate an innovative mindset while optimizing your operations, start with a problem close to home. How can you innovate within your existing constraints and maximize the value your team delivers? How can you extract more value from your existing assets?
A simple shift in the way you look at your data can often illuminate new opportunities. For example, once, during a review of one organization’s legacy systems, I discovered that an application cost 600 times the value generated by the customer set it serviced. Migrating those customers to similar, yet more efficient, platform not only strengthened the departmental return on investment, but also provided the customers with a better, more feature-rich experience.
Approach IT like an entrepreneur
Bold leadership is no longer strictly for CEOs – it needs to pervade all levels of the organization.
In IT, this means treating the organization like a business in and of itself. Step out of the space in which you’re comfortable to ignite your entrepreneurial spirit. Cultivate diversity of thought, be willing to take risks and to fail, learn from what doesn’t work, and apply those learnings to the next risk, knowing full well that it might not work out, either.
This becomes easier when you implement a framework for success that can help your team understand how and when to move forward – whether pursuing innovation or optimization. More importantly, that framework will help you and your team determine when to abandon a project and use the “failure” as a launch pad to something new. The point is to avoid wasting time, money and energy on fruitless paths.
An entrepreneurial mindset will challenge you to shift your focus from just delivering results to maximizing the value you deliver – your IT margin. Examining your organizational efficiency through this lens brings a refreshing change to the delivery conversation, as it fosters more fit-for-purpose solutions and highly efficient delivery. I know plenty of entrepreneurial IT leaders who have had to find creative ways to deliver increasing value on a declining budget.
Remember: the most successful IT leaders boost their innovation budgets from operational efficiencies. The more efficient your operations, the more money becomes available to explore innovation.
Be alert. Be responsive. But lead responsibly
Balancing competing demands between keeping the business running effectively and moving your IT organization forward requires keen attention and skillful management. There’s almost nothing about it that you can set and forget.
A key problem is that priorities will shift on a regular basis. You may need to give 80% of your resources to optimization one month, and 80% to innovation the next. Or, you may find that you need to focus on optimization in order to facilitate innovation at a given time. Likewise, there may be scenarios where leaning into innovation actually forces your organization to become more efficient. It’s a delicate dance.
One thing is certain. The most successful IT teams will be those with the skillsets to fulfill both sides of the innovation/optimization challenge, who are managed both responsively and responsibly. That means balancing innovation and efficiency without hampering your team’s abilities, and finding a way to minimize the impact of shifting priorities. Look for logical completion points and ensure you have a clear and consistent communication plan to reduce overwhelm and chaos.
How cShell can help
cShell is here to help you balance the demands of optimization and innovation. Engage one of our C-level experts to help you gain new perspective on your IT organization and find the opportunities hidden within your greatest challenges. We can help you create a framework for innovation that prioritizes a sustainable, efficient future.