CIO Straight Talk - Issue 2 - 23

people studying cancer all across America in traditional
institutions. If we are just going to replicate that, there is no
reason for us to exist.” That is why Gordon Zubrod
ultimately said yes to Freireich’s proposal.
To take a slightly negative example, if you look at the history
of General Motors, they were a company that understood the
need to take chances. The first electric car was made by GM,
way ahead of its time. The whole Saturn project reflected an
understanding of the future of auto making. The problem is
that they lost faith in these innovative concepts and failed to
see the projects through to completion. They intellectually
understood the importance of taking chances but they did not
reinforce that impulse and continue to fund these experiments.

So what went wrong? How can an organization institutionalize a commitment to this sort of risk taking?
In the case of General Motors, there was always a tension
between the engineers and the financial guys. Periodically,
the engineers were ascendant in power and they did these
really interesting things, they took these kinds of chances.
Remember, GM was also one of the first companies to
aggressively explore the use of robotics in manufacturing.
Though the company went too far and the experiment
backfired, it was totally the right sort of thing for a company
like that to do.
The problem is that the engineers try these things and maybe
overstep their bounds or are not firmly enough in control of
the company. Then the more conservative finance guys come
in and rein things back. There has always been confusion
about whether GM is an engineering company or a finance
company. In fact, before it went bankrupt, it was basically a
company that made cars in order to fuel the financing
operation of GMAC.

But GM’s history of innovation is not an example of
innovation occurring at the margins. In fact, the
innovative projects were killed because Engineering
was marginalized by Finance. And GM was hardly an
outsider in the industry, taking chances because it was
desperate. Is this an example of an insider that has the
luxury of taking chances?
GM is interesting because it not only had the resources to
experiment – but also the inclination. There were so many
innovative and brilliant people working there that it was
difficult to hold them back. The company was in a wonderful
position to spur all kinds of innovation. They just did not
follow through on them.

HCL has pushed primary responsibility for innovation
and change to the periphery of the organization, to
front-line employees who work directly with customers
in coming up with solutions. Do you see risks in this
reconfiguring of the traditional organizational
hierarchy?

There is always a trade-off between the tightly controlled
organization and the more free-wheeling one. The former is not
going to be as innovative but it will not make as many errors.
The latter may generate breakthrough insights but is going to
screw up occasionally. An organization has to decide what it
wants. If you want innovation, you have to accept that there will
be some missteps. But so long as you know this going in and
build the expectation with employees and investors that you are
risk takers, you are probably fine. You also need institutional
resilience and the ability to adapt to your errors. There is
nothing wrong with making mistakes, so long as you can
recover. My guess is that a culture that is highly innovative will
probably be highly resilient, as well. It’s the same gene, the
same muscle.

What happens when an outsider becomes an insider
because an idea or innovation is successful? Do you lose
the advantages of operating at the margins?
There is a common trajectory for innovators, which is a burst of
real productivity, followed by a leveling-off or a decline. When
you see that decline, sometimes you think, “Well, people do
their best work when they’re young.” I think that is nonsense. I
think what you are seeing in that decline is that they have lost
their privileged status as outsiders and they have become
captured by the status quo. So the key to remaining fresh is
finding ways to stay on the outside, even as you are an insider –
or at least convince yourself you are an outsider, even if you are
not anymore.

Sounds like a successful serial entrepreneur, who may no
longer have the financial motivation to come up with a
great new idea but who may need to prove that he can do
it again, that his previous success was not his last one.
You have to be someone who does not want the safe and
comfortable space that comes with success, someone who
repeatedly craves this kind of uncertainty.

So in talking about innovation, are we talking about a
personality type as much we are someone’s position at the
edge of an organization?
I think it is a combination of the two. You have to be someone
who has a fairly fundamental streak of iconoclasm. Perhaps you
are drawn to these kinds of situations for psychological reasons.
The mistake we often make when trying to understand a certain
kind of innovation – someone applying their creativity and
imagination to a problem, taking an extraordinary risk and as a
result, completely transforming the paradigm of his particular
world – is thinking that it is all about the individual. Yes, it is
about the person’s brilliance or extraordinary vision, but I do
not think that is a sufficient explanation. A key component we
often overlook is a structural one – that person’s position on the
fringes of his world.

CIO Straight Talk //

23



CIO Straight Talk - Issue 2

Table of Contents for the Digital Edition of CIO Straight Talk - Issue 2

CIO Straight Talk - Issue 2
Contents
So What Do CIOs Want
Innovation at the Periphery
The CIO as Thought Leader
Career Move: From Managing Technology to Managing Change
Every CIO is in the Information Business
Analytics and Decision Making
Putting IT at the Center of the Customer Experience
Pick n Pay Focuses on Delivering Value to Customers
Bringing "Lean" to IT
Whither the Cloud in a Stormy IT Enviroment?
Management by Driving a Stake in the Ground
From Data Processing to Orchestrating Knowledge
Extreme Collaboration
Enterprise Mobility: Delivering the Connected Customer Experience
CIO Straight Talk - Issue 2 - CIO Straight Talk - Issue 2
CIO Straight Talk - Issue 2 - Cover2
CIO Straight Talk - Issue 2 - 3
CIO Straight Talk - Issue 2 - Contents
CIO Straight Talk - Issue 2 - 5
CIO Straight Talk - Issue 2 - So What Do CIOs Want
CIO Straight Talk - Issue 2 - 7
CIO Straight Talk - Issue 2 - 8
CIO Straight Talk - Issue 2 - 9
CIO Straight Talk - Issue 2 - 10
CIO Straight Talk - Issue 2 - 11
CIO Straight Talk - Issue 2 - 12
CIO Straight Talk - Issue 2 - 13
CIO Straight Talk - Issue 2 - 14
CIO Straight Talk - Issue 2 - 15
CIO Straight Talk - Issue 2 - 16
CIO Straight Talk - Issue 2 - 17
CIO Straight Talk - Issue 2 - Innovation at the Periphery
CIO Straight Talk - Issue 2 - 19
CIO Straight Talk - Issue 2 - 20
CIO Straight Talk - Issue 2 - 21
CIO Straight Talk - Issue 2 - The CIO as Thought Leader
CIO Straight Talk - Issue 2 - 23
CIO Straight Talk - Issue 2 - 24
CIO Straight Talk - Issue 2 - 25
CIO Straight Talk - Issue 2 - Career Move: From Managing Technology to Managing Change
CIO Straight Talk - Issue 2 - 27
CIO Straight Talk - Issue 2 - 28
CIO Straight Talk - Issue 2 - 29
CIO Straight Talk - Issue 2 - Every CIO is in the Information Business
CIO Straight Talk - Issue 2 - 31
CIO Straight Talk - Issue 2 - 32
CIO Straight Talk - Issue 2 - 33
CIO Straight Talk - Issue 2 - Analytics and Decision Making
CIO Straight Talk - Issue 2 - 35
CIO Straight Talk - Issue 2 - 36
CIO Straight Talk - Issue 2 - 37
CIO Straight Talk - Issue 2 - 38
CIO Straight Talk - Issue 2 - 39
CIO Straight Talk - Issue 2 - Putting IT at the Center of the Customer Experience
CIO Straight Talk - Issue 2 - 41
CIO Straight Talk - Issue 2 - 42
CIO Straight Talk - Issue 2 - Pick n Pay Focuses on Delivering Value to Customers
CIO Straight Talk - Issue 2 - 44
CIO Straight Talk - Issue 2 - 45
CIO Straight Talk - Issue 2 - 46
CIO Straight Talk - Issue 2 - Bringing "Lean" to IT
CIO Straight Talk - Issue 2 - 48
CIO Straight Talk - Issue 2 - 49
CIO Straight Talk - Issue 2 - 50
CIO Straight Talk - Issue 2 - Whither the Cloud in a Stormy IT Enviroment?
CIO Straight Talk - Issue 2 - 52
CIO Straight Talk - Issue 2 - 53
CIO Straight Talk - Issue 2 - 54
CIO Straight Talk - Issue 2 - 55
CIO Straight Talk - Issue 2 - Management by Driving a Stake in the Ground
CIO Straight Talk - Issue 2 - 57
CIO Straight Talk - Issue 2 - 58
CIO Straight Talk - Issue 2 - From Data Processing to Orchestrating Knowledge
CIO Straight Talk - Issue 2 - 60
CIO Straight Talk - Issue 2 - 61
CIO Straight Talk - Issue 2 - Extreme Collaboration
CIO Straight Talk - Issue 2 - 63
CIO Straight Talk - Issue 2 - 64
CIO Straight Talk - Issue 2 - 65
CIO Straight Talk - Issue 2 - Enterprise Mobility: Delivering the Connected Customer Experience
CIO Straight Talk - Issue 2 - 67
CIO Straight Talk - Issue 2 - 68
CIO Straight Talk - Issue 2 - 69
CIO Straight Talk - Issue 2 - 70
CIO Straight Talk - Issue 2 - 71
CIO Straight Talk - Issue 2 - 72
CIO Straight Talk - Issue 2 - 73
CIO Straight Talk - Issue 2 - 74
CIO Straight Talk - Issue 2 - Cover3
CIO Straight Talk - Issue 2 - Cover4
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