IT + IC = Innovation

Mary Adams, Founder

This project re-built 14 bridges during10 summer weekends and shows thepotential for innovation even intraditional industries.

Smarter-Companies Inc.

We’re living a seismic change

Industrial Era �

� Knowledge Era

Agricultural Era �

As we endeavor to increase innovation,we are often hampered by ourindustrial roots. This presentationhighlights some of the basicmanagement concepts of the industrialera and the knowledge-era equivalent.

Inspirirani ljudima.

IT (information technology)

Making things � Solving problems

We still make and use city buses butsome of the most interesting innovationcomes in the use of open data from GPSin the buses that changes the experienceof finding and catching a bus.

Efficiency � Effectiveness

Kahn provides on-line mini-lectures thatcan be used for individualized learning.Each student can achieve mastery of eachtopic rather than everyone moving at thesame pace in an “industrial” classroom.

Cost/Quality � Experience

Illustration by Loulou & Tummie

Sysco, known for industrial food, istesting the provision of locally-grown organic produce to the U ofMichigan. IT fuels all theseprojects.

Inspirirani ljudima.

IC (intangible capital)

Tangible � Intangible

Fedex owns huge numbers oftangible assets but the essence (andvalue) of the company comes fromintangibles like people, processes,data, partnerships, brand and culture.

Scarcity � Abundance

One of the most exciting thing about intangibles likesoftware, data and knowledge is that they are notsubject to the economic laws of scarcity—which is how acompany like WhatsApp can build an app that attracts450 million users with just 55 employees and earn a $19billion price from Facebook.

Accounting � ICounting

WhatsApp also illustrates a keychallenge with intangibles: how tomeasure them. We advocate a newapproach to complement accountingthat identifies financial potential basedon how well a company creates valuefor its stakeholders.

Inspirirani ljudima.

Innovation

Top-down � Bottom-up/Outside-in

Innovation is important to business becausethe shift to the social/knowledge erarequires a constant flow of information andlearning in all directions. The answers rarelyreside just at the top.

Strategy � Innovation

Innovation is the knowledge-eracomplement to traditional, top-downstrategy. It creates an environmentwhere new strategies and solutionsemerge.

Control � Collaboration

Amazon’s marketplace shows howcollaboration with other vendorscreates much more value (forcustomers, partners and for Amazon)than keeping their network closed.

Inspirirani ljudima.

Toolkit

Chief Innovation Officer study

Main areas of CIO focus (process)Strengthening innovation processes

Developing research capabilities

Greatest CIO challenges (ecosystem)Getting the right people and partnerships

Obtaining funding for initiatives

Making the corporate culture more innovative

This survey by my firm of 25 Chief Innovation Officers in theU.S. demonstrated the need for understanding the ICcomponents of the innovation ecosystem.

Innovation process

Idea Generation Selection Development Commercialize

A process like this simple one can bevery helpful to encourage andmanage innovation.

Innovation ecosystem

IC

But as the study showed, successfulinnovation also needs to cultivate ahealthy intangible capital ecosystem.

Measuring IC ecosystem strength

ICounting measures the strength ofthe intangible capital that makes upthe ecosystem connecting IT andinnovation.

Inspirirani ljudima.

Challenges/Opportunities

The industrial model is not sustainable

Industrialization is losing its power as amanagement approach. It guides us to do thewrong things in the wrong ways. We must keepthe strengths of the past but create newstrengths and capacities.

Luckily, innovation thrives on constraints

Aravind shows us that new constraints can be a powerful driver ofinnovation. Their focus on cataracts as a leading cause of blindnessin India has enabled them to provide surgeries for $20 that cost upto $5,000 in the U.S. Constraints are our friends

Constraints

• Poverty

• Jobs

• Pollution

• Waste

• Energy use

• Health

• Education

The Opportunity

Making everyday life happier, healthier and

more productive—how will you help?

Inspirirani ljudima.

IT + IC = Innovation

What’s your innovation equation?

Questions?

www.smarter-companies.com

Mary Adams 781-729-9650

adams@smarter-companies.com