The internet experience has brought into sharp relief how small, agile start-up companies can take on innovative technologies, create new markets and then scale up to challenge incumbent corporations. Now, management gurus are building methodologies for larger organisations to cater for such innovation alongside their traditional processes.
A buzzword for this, coined by Harvard business professor Clayton Christensen, is "disruptive innovation". In essence, this is identifying technologies or processes which when used in new ways can create step change.
This does not necessarily mean using the latest or the most sophisticated technology. Disruptive innovation often uses lower-level technology in a new way to open up new opportunities or to extend existing markets by widening the pool of customers with a simpler product or reduced functionality to facilitate what they are already doing.
Take EasyJet, for example, with its use of passports as tickets it achieved a step change reduction in cost and complexity.
The more IT directors understand their businesses, the more they become the natural ally to help chief executives bridge the gap between innovation and business processes. IT chiefs have a hand in every part of the business, and they are used to leading change and refining and developing new business processes.
They are in an ideal position to identify the best use of innovation - which is all about fostering half-baked ideas, integrating hazy business cases, drawing on gut feelings and guiding inventive mavericks. They also understand the data gathering and iterative experimentation that is so vital in introducing step change innovation.
IT directors really can help forward-looking chief executives here, and that message, given the seal of approval by Harvard professors, is now official.
This was first published in May 2003