June 27, 2013, 2:18 PM — From hackathons to 'innovation stations,' three creative CIOs have figured out how to trigger new ideas that lead to better insights, lower costs and happier customers.
1. Build From the Edges
Ken Piddington, CIO, Global Partners: Global Partners started out as a local heating-oil company. Today, we're a Fortune 500 company that is a leader in the storage, distribution and marketing of energy products. In IT, we have to innovate to support that rapid growth.
I budget 5% of my team's time to play with new technology, from the senior-most leader to the newest person on the team. But with just 25 of us in IT, we lean on our vendors a lot, particularly with our "innovation challenges."
We bring in like-minded partners and encourage them to compete and collaborate to develop the most innovative and cost-effective solution to a problem. It's fun to see them jockey for position and then play nicely together for our benefit.
We're an 80-year-old company with systems, processes and people that have been in place for decades, so there can be resistance to innovation. We choose our spots carefully. When we wanted to introduce a new business intelligence dashboard, we knew some groups were pretty set in their ways, so we worked with a small marketing unit that was more open to new technology. Soon, all the groups started asking for it. We want giant changes, but we focus on the edges; build it there, and it will slowly creep in.
2. Everyone's an Innovator
Lynden Tennison, Senior Vice President and CIO, Union Pacific: Union Pacific needs innovation to improve safety, service and efficiency, and create customer value. Our research council, led by the executive vice president of operations, meets quarterly to review emerging technologies that may have business applications, and then invests millions of dollars in them.
This council led to our unique in-motion wheel defect detector in North Platte, Neb. The wheels of every rail car carrying coal are inspected using ultrasound technology--and then often repaired without leaving the track--improving safety and decreasing downtime.
The research council is great for solving those big problems. But we have a smart IT staff of 2,000 people, and we want them to share their craziest ideas without fear. Four years ago, we implemented the Innovation Station. Anyone in IT can post an idea to this anonymous online forum. Once an idea receives a certain number of votes--80% positive--we provide $3,500 and 60 days to pilot it. We have funded everything from little ideas to significant projects.
One IT professional wanted to build an algorithm to address the number of false positives in our equipment inspection processes. He was right; we were bringing equipment in for repairs needlessly. The algorithm saved the company $10 million a year.
3. Never Stop Questioning
Katherine Golden, Vice President of Engineering and Enterprise Architecture, Corbis: Our business is going through disruptive change, requiring IT to challenge the status quo. I worked for a CEO who would literally stand on his desk to look at a problem from a different angle. I still do that today. That new perspective makes the difference in identifying breakthrough innovation. As a midsize company with the challenges of a global company, the key is not that we have all the right answers but that we ask the right questions--whether we're in an IT discussion, a business meeting or a sales call.
We never let ourselves get too impressed by a single idea. With millions of archived images, search innovation is a big focus. But instead of patting ourselves on the back as we release a new feature, we get the development team and business stakeholders in a room to figure out how to make it better.
Corbis has formal programs to encourage innovation, like our annual hack day and incentive-based patent program. But one of the most important ways I've increased innovative thought is by increasing diversity.
I want that brand-new person who asks 20 questions working alongside the veteran with 20 years of experience. One of our interns created an iPhone app for suppliers. It wasn't on our road map, but it's a great new product that our suppliers love.
Read more about innovation in CIO's Innovation Drilldown.