John Chambers on Innovation: Keynote Address from Forrester IT Forum

Earlier I wrote about CXO belief in innovation as an important successful imperative to an organization’s ability to stay at the forefront of their respective markets.

John Chambers, Chairman and CEO of Cisco Systems, stated his case for innovation in a thought-provoking keynote address on Tuesday morning.

Every CEO’s vision of success will vary in terms of market, business objective, and competition…just as Mr. Chambers’ view of success is focused heavily on the importance of the network. However, one area where practically every senior IT executive would emphatically agree with Mr. Chambers is in his assertion that the way that IT organizations do business is changing, and with new collaborative technologies, IT must change to keep pace.

Phases of Innovation

Mr. Chambers framed his network-focused innovation discussion with phases. Think of the dawn of the Internet (Web 1.0) as Phase I of innovative communication. Suddenly organizations needed to adapt to customers that embraced the idea of serving themselves to products and servers from the anonymity of a remote computer. Notice how rapidly the term ‘brick and mortar’ disappeared from the everyday IT discussion. With Web 1.0 the network had become the platform for all forms of IT communication, much of it outside of an IT organizations direct control.

Now IT is facing Phase II of innovative communication in which the network has gained collaborative intelligence built on Web 2.0 technology and demonstrated by business models like YouTube, Facebook, and MySpace. Now IT must treat everything as a service, including hardware, software, storage, bandwidth, etc. Web 2.0 is transforming the enterprise culture as well, in which all business disciplines (sales, engineering, channels, acquisitions, marketing, finance, legal, etc.) will collaborate through audio, video, IM, and text because of the intelligent nature of Web 2.0 network technologies.

CEOs expect IT to drive the investment in and support of collaborative technologies. As most CIOs already know, your users will push Web 2.0 collaborative processing into the organization despite IT’s position, so fight it and risk outsourcing or get in front of this wave and own it. While embracing and pushing Web 2.0 provides IT with a great opportunity to align with the business and demonstrate innovative perspective, IT needs to know where to invest scarce time and resources.

Chambers strongly suggests that CEOs and CIOs start by meeting to clearly align priorities. CEOs espouse vision, and they develop and pursue strategies for growth and productivity. CIOs typically think in terms of IT and program progress and capabilities, with emphasis on developing and maintaining technology architectures for the business.

A Cultural Shift for Innovation

Don’t assume that Web 2.0 is simply about implementing technology. It’s about embracing a cultural shift. Both perspectives can come together to define the new business model that shows how the right technology drives collaborative growth and satisfies vision. Chambers gave an example – Cisco has deployed Web 2.0 virtual meeting technology.

The CEO’s vision was to accomplish better communication through visual discussion inline with the strategic goal to reduce cost. The CIO identified, implemented, and supported the right technology to meet the need, hence delivering significant value to the business. This joint effort between IT and the business to use innovative Web 2.0 technology to satisfy the communication vision and execute the cost-cutting strategy worked well. Chambers praised the intuitive nature of combining visual and voice communication, while Cisco also saved of $150M through reduced travel.

Chambers made another point that is worthy of repeating.

Cisco Systems has achieved success not enjoyed by many of their peers in large part because Cisco embraced the internet transition while Cisco’s peers missed the trend.

Chambers noted that when an organization misses the initial adoption phase of a market trend, it becomes exponentially more difficult to capture it, while your more innovative competitors often surge ahead. From a pure technological perspective, just consider all of the acronyms that represent technologies under the Web 2.0 umbrella (RIA, REST, SIP, JavaFX). If you wait to adopt, the sheer learning curve alone will drop you behind your innovative competitors.

Innovation means the future of business in Chambers’ view. Innovation drives growth, attracts and retains top talent, and results in operational excellence. Trial and error is a valid approach as long as the limits are defined, understood, and managed by the CIO, and support for Web 2.0 adoption is consistent from the CEO despite some stumbles.

The new business model that CEOs and CIOs must jointly develop will greatly increase the opportunity to capture and ride transition waves. For CIOs, this means that adopting Web 2.0 technology to satisfy collaborative networking and communication is not just about growth, its about survival.

Popularity: 26% [?]

Filed Under: IT Operations