by Elizabeth M. Ferrarini
If you want to deploy IT for business value, then you'll need to innovate. That's the mantra of Martin Curley, global director of IT innovation for Intel Corporation, and that's the subject of his book, Deploying IT for Business Value. Curley is responsible for stimulating, supporting, and nurturing the development of new products, services, and methodologies by Intel's 5,000 IT employees. He also oversees the worldwide Intel Innovation Centres, which enable IT employees to work with Fortune 500 customers and government agencies. He sat down with Enterpriseleadership.org recently to talk about how Intel creates an environment for IT innovators.
EL: Martin, we've interviewed dozens of IT executives from Fortune 1000 companies -- you're the first global director of IT innovation that we've interviewed. Can you tell us about your role? If we were to visit an Intel innovation center, what would we see?
MC: The primary role I have is around stimulating and creating innovation and creating an environment and set of tools to help our IT organization, and folks actually beyond the boundaries of our IT organization, innovate. My organization also does a lot of building prototypes, trying to drive new products and services across the chasm into production at Intel, so our Intel employees and our customers can get more value from IT. I'd almost say, in fact, that there's a new discipline emerging around IT innovation, which is the intersection of information technology as a discipline, and innovation as a discipline.
But if you were to walk into one of the innovation centers -- and we have a network of these worldwide now -- they're not very fancy, they're not high-cost, and you would see Intel IT employees working on some disruptive prototypes -- that might be one activity. You might see some innovation training going on, because there are some emerging tools and techniques that people are just starting to become aware of that can significantly increase the yield of innovation. You might see a customer executive workshop going on -- in our Ireland innovation center, we've hosted more than 20 workshops with various European governments around topics like transforming education or healthcare using IT. You'd certainly see a lot of showcases, and a mixture of sort of soft leadership around emerging practices or the latest Intel products and new usage models associated with those products. So, you'd see a mix of activities
EL: Are the people staffing your innovation centers full-time staff? Or, if someone in the IT group had an idea, could they submit that and be involved in developing the idea in an innovation center?
MC: We have quite a small team, actually, maintaining the infrastructure and creating the environment. There are a number of different mechanisms that enable IT employees who have a good idea to submit that idea. We have a virtual innovation center, and they can submit it there. We have the concept of an innovation assignment; if someone has a particularly good idea, they're able to take time out of their "day job" and work in the innovation center, to bring that idea to fruition. One employee in Sacramento who had a very interesting idea of using our new Viiv technology in the home for remote power monitoring and more efficient use of air conditioning took an assignment, and worked on a project with some of the local utilities there and tried some new algorithms around air conditioning; it looks like it could add significant value.
Or, employees have taken an innovation assignment to work on a specific application that would add value to a particular set of Intel engineering.
EL: So, they are rewarded for coming up with innovative ideas, and there's a support environment for this?
MC: Exactly. For innovation to prosper, you need to create a "virtuous circle" around it. If you're trying to change a culture to support innovation, you need to have tools and methodologies in place, and you need to have metrics. Andy Grove, one of our founders, often says, if you can't measure it, you can't manage it. So, you need to have different metrics in place. And then you need incentives, to recognize and reward innovators. We'll have some awards for the person who actually discovers and develops an innovation, but we also have one award for an information catalyst, for somebody who was especially effective in creating an environment that enables or fosters innovation.
EL: It's fascinating how that happens -- you have the one guy who has the idea, and the other four who helped to make it happen.
MC: You've just hit on an important point: Innovation is a team sport. To use the soccer analogy, it's important to recognize the person who provided the assist for scoring the goal. For every one person that has the idea, perhaps there are eight or nine or more people who are needed to get that idea into production, get it into use.
EL: You were most recently Intel's director of IT, People, Intellectual Capital, and Solutions. What exactly did you do?
MC: Five or six years ago, we developed a business plan to help transform the Intel IT organization. And one of the gaps that were identified in the plan was that we weren't managing our global people resource in an integrated fashion -- we had four or five thousand employees across 50 different sites. The role of director of IT, People, Intellectual Capital, and Solutions was created to manage our people as an integrated resource, identifying the future core competencies for the organization and putting curricula in place. We also created an intellectual capital program to encourage IT employees to submit and mention disclosures.
Because Intel created this new position and initiatives, our IT organization is probably the fastest growing contributor to intellectual property. Four or five years ago, perhaps we might've had one patent issued, and today, we're doubling the number of patents, or the number of invention disclosures, every 18 months. And I think this past quarter, we had more than 200 invention disclosures submitted and more than 20 patents approved from our IT employees.
EL: You have a rich environment that really encourages people to innovate, and I can see the relationship to what you did and what you are doing as a direct line. Well, you know Nicholas Carr, and his book, Does IT Matter? One of the points he made in the book is that so many CIOs are stuck in a situation where they're spending 70, 80 percent of their time just keeping the infrastructure running, the lights and phones and the network. And this causes executive management to wonder, well, we could outsource that function, what is it of value do you really provide? From your perspective, what would you say to a CIO trying to get out of that mode?
MC: Nick Carr's book promoted a healthy debate within the IT profession in terms of whether IT can add value. I firmly believe that IT can add competitive advantage, and in some cases, competitive necessity, and some of Nick Carr's premises are based around the view of IT as a utility.
I think it is very important that a CIO look at the IT value chain and understand where the spend is. I wouldn't contest Nick Carr's point that 70 to 80 percent of the spend is in keeping the lights on, and I think the CIO needs to work really diligently to see how that spend can be reduced. One way would be to deploy new technology; for example, remote management technology. A higher-leverage activity that the CIO could take on is using the concept of design for assembly, which is used extensively in the automobile or consumer electronics industries: As you're designing solutions or cars or whatever, you're designing for the lowest operating costs. So if the CIO can inculcate the strategy that when solutions are developed, they're developed for lowest TCO, that would ultimately help.
I think the job of the CIO is to not just to optimize the operation, and make sure service-level commits are met, but to try to take spending out of operations and move it up the value chain into solutions delivery and particularly into innovation. We've seen evidence, some internal and some external, that you'll get a higher return on your dollar if you invest in the innovation space rather than the operations space. There are some role models -- Dell for example, and WalMart -- these are companies where IT really is a competitive advantage, and I think the CIOs there have been really successful in terms of trying to minimize the operations spend and invest in innovations that add value to the business.
EL: Let's talk about using IT as a competitive advantage; how do you go about doing that, what are some ideas around that that would be useful to other CIOs?
MC: We're starting to see a pattern emerge around IT innovation as a process; we see that there are at least six things that have to be in place for an innovation to be successful. The first one is that there is actually a problem or opportunity that needs to be fixed or to be addressed and someone actually has a vision as to how that can be achieved. One example would be Westminster Wireless City -- the CEO there had a vision of how wireless technology could potentially transform the city of London, but he really didn't know how to bring his vision about. He worked with his own IT department and with some support from one of the Intel innovation centers to build a prototype that eventually ran to a working implementation.
But most innovations don't come from "blue-sky thinking"; they come from addressing a specific problem or a potential opportunity. Necessity is the mother of invention, as the saying goes. Typically then, an IT solution has to be associated with fixing a problem or seizing an opportunity, and very often, a business case has to be there. IT went from irrational optimism before the dot.com crash to irrational pessimism, and today there's a modicum of normality coming back to IT investments, but a business case is a prerequisite.
And then there are three vectors where the most difficulty are. As IT professionals, we naturally think of technical risk and the IT solutions. But with every IT investment, there's an associated business investment. There may be a business process change that needs to happen, there may be an organizational change that needs to happen, and the last vector is perhaps the most difficult -- very often a customer change is required, or even a societal change. Many of the innovations that are being introduced today are touching many parts of society, and society's willingness and ability to adopt an innovation are really crucial to the innovation being successful.
EL: So then the question might be, how do you measure the relative value of IT innovation to profit?
MC: This is something the whole profession has wrestled with. One solution that we find quite effective is what we call the "value dials." We identify the critical business variables at Intel and maintain a list of those, and the monetary value of driving a change in each of them. When we are developing a value proposition for a particular innovation, instead of having a very "wooly" statement -- "This application might improve supply chain flexibility"-- we'll actually hard code into the value proposition that, for example, the goal of this project, which will improve supply chain flexibility, will be to reduce our days of inventory by one day and achieve a one percent market share increase in a particular market.
EL: Ah -- put some real teeth into it.
MC: Absolutely; and we then know the direct value of reducing the days of inventory by a day, or improving our market share by one percent, and that gives us the numbers that form the business case. And then the IT organization or the project team and the business team work together to do the best they can to realize that result. And by measuring that, we can see if the solution or project actually delivered what it set out to achieve?
EL: Does Intel have a budget for IT innovation, or is it parceled out of everyone else's existing budget?
MC: We do have a budget, and just to recognize that innovation happens everywhere, we have a small part of the budget that is centrally managed, and that part of the budget is to help stimulate and capitalize and create an environment for innovation, and also to do research, we have a central research group that is working on some specific agenda. And then the remainder of the innovation budget is split out amongst our various organizations within the IT organization -- innovation is happening everywhere, and what we are trying to do is to do more innovation more effectively and increase the return on innovation by catalyzing and better supporting innovation.
EL: Tell us about some of the innovation projects that you've worked on at Intel.
MC: One example of innovation at Intel is of a particular solution under development called Miramar. One of the challenges that companies like Intel face globally is collaborating with employees in different parts of the world and in different time zones. Miramar is an emerging application that we developed to try to provide a solution to that. We have a vision called "better than being there" -- that you could actually have a remote meeting experience that is actually better than physically being in the room with somebody through computer mediation. Miramar is in its early days, but today, we have on employees' desktops we have 3D immersive environments where they can better organize and better locate and better connect information.
EL: To what degree does IT organization carry over to the external, product side?
MC: Quite a bit; our primary focus is internal, to help the IT organization be more innovative and develop more solutions, but we see an increasing pull on both sides working with our product divisions to give them ideas and help them build new features into the products, and we have done a lot more work with Intel's customers than we originally would've expected to, with, for example, European governments; we will very often work with our sales team and with your fortune 500 execs on exec workshops looking at specific problems and how an innovative solution might be able to help. There is a significant crossover.
EL: Do you see any disruptive innovations that could change IT within the next five years? I'm curious about your views of the use of RFID or WiMax, in particular, are people coming up with ideas on how to use that kind of technology?
MC: Yes indeed, and I think the pace of change in terms of new and disruptive technology emergence is happening much faster than any of us could potentially could have conceived of. I'm sure if you held this interview in a year's time, there are things that will be quite commonplace in our vocabulary that we don't know about today. But you mentioned two specifics, RFID and WiMax. Within Intel and the innovation centers, for example, RFID, we've been involved in projects in a hospital in Korea in neonatal care, where the mother and baby have RFID tags to avoid mixups, and in a hospital in Milan, we've been using RFID working with the hospital and a system integrator to make sure that blood transfusions don't get mixed up. So, RFID in some industries is becoming pervasive; some other industries, it's going to take more time for it to proliferate. WiMax is a hugely exciting technology; it really is the classic disruptive technology and moving very fast. I think in a year's time, if you'd have this interview, I think WiMax will start to widely diffuse, with a 10x degree of deployment of WiMax compared to today; certainly, the economics are staggering compared to putting fiber in the ground, but as happen normally with new technologies, you'll get hype. Gartner has that very famous "hype curve." I think there is a hype around WiMax. However we have been trialing it at the Ireland innovation center and innovation center in the UK, and the performance is very good. We're actually using it in production, we have construction going on of a new factory, and many of the suppliers that are working with us are connected via WiMax, and their internet access is very effective and probably a tenth of the cost of a conventional connection, so WiMax is very exciting and is actually very real.
EL: Well, Martin, thank you for taking some time to talk with us today, and talking about your program and your people!
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Elizabeth M. Ferrarini is a consultant for the Swive Group, an IT consultancy based in Boston, Massachusetts.
