Ignore Innovation at Your Own Peril

Polaroid, Kodak, Compaq, Blockbuster, Nokia. They were all seen as innovators once. Market leaders that were revered and thought invulnerable—until they weren’t. 

In 1964, the average tenure of companies on the S&P 500 was 33 years. But by 2016, it’s down to 24. Similarly, nine out of 10 companies on the Fortune 500 in 1955 are no longer on the list today.

That technology is disruptive is nothing new. But the speed at which companies and industries are being disrupted is alarming. Uber, for example, served four billion rides in 2017. And Airbnb hosted nearly 100 million guests last year. Both companies have yet to celebrate their 10th birthday. 

So, what does this trend of rapid disruption mean for IT? 

1. IT will need to educate business leaders 
Other key stakeholders in the company may have insufficient knowledge of IT and how it can fundamentally change the business. It is the job of the CIO to act as expert counsel on these issues, guiding other business leaders to make educated decisions that will help the company succeed in a rapidly changing technological environment. By ensuring that the company understands emerging technologies and how they can provide benefits, IT leaders can help the enterprise stay competitive. 

2. Exploratory investments will be crucial 
Although funding research and new, untested projects may provide few immediately realizable benefits, it can be critical to a company’s continued success. Without continual technological advancement, a company’s business strategy will remain stagnant and be surpassed by a more innovative competitor. IT organizations must pilot, test, and scale new technologies in areas like automation, data analytics, and IoT to increase productivity, reduce costs, and deliver novel products and services to customers.

3. Technology will drive engagement with customers
Another important reason for innovation is its ability to drive engagement with customers. One illuminating example of this is in the healthcare industry. Healthcare providers are now using IoT and automation to develop connected devices to monitor patients and deliver better care. This implementation also allows for better care outcomes, increased staff productivity, and reduced costs.

4. Technology will enable new products and services
New technologies are driving incredible innovation in a wide range of industries. They are creating entirely new markets and allowing many businesses to reinvent their offerings. For example, IoT has made it possible for several car insurance providers to equip customer automobiles with devices that monitor driving activity, allowing them to offer lower rates to better drivers. This kind of disruptive shift is precisely what makes a CIO’s guidance so valuable. 

5. Technology will drive value
The most important role of IT and the CIO in coming years will be to look for new ways to use technology to increase business value. There will be significantly less focus on the technical details and a greater focus on new ideas and innovation. Technology will become more valuable in achieving efficiency and market advantage in the coming years. The CIO must be instrumental in ensuring that business leaders understand the capabilities of technology and that the focus of IT is to achieve business goals.

Without innovation, exploratory investment, and a forward-thinking mindset, companies will inevitably succumb to nimbler, more creative competitors. IT leaders must constantly invest in the future and advise business leaders on upcoming technologies to keep the company’s strategies viable.

Ignore innovation at your own peril.