Are innovation strategies back on CIO agendas?

IT innovation, that fraught phrase, has come roaring back after maintaining a polite silence during the fiscal misery of 2008 and 2009.

Companies are starting to broadcast their efforts to foster technology innovation among the ranks. (You can read about radical, reapplied and incremental innovation strategies at Chevron Corp. in today’s Q & A with the oil company’s innovation specialist, Jack Anderson.) Meantime, companies that appear to be lacking in ingenuity — cue Microsoft — are publicly flogged on no less than the op-ed page of The New York Times for “never developing a true system for innovation,” record earnings be damned.

So, has the corporate risk appetite for trying new IT stuff changed?

“I don’t think it is so much the risk appetite as it is the nature of IT innovation that has changed,” said Mark McDonald, who covers CIO strategy and the business of IT at Gartner Inc. McDonald said that in his conversations with CIOs this year, he is hearing about three conditions that have the potential to “completely reposition IT in three years” — in other words, make it new.

• 1. The first shift is that business is looking to IT more to raise productivity than to cut costs in the enterprise.

“Obviously, to raise productivity I can’t just do the same with less. I have to do different things with the same resources, which you could argue opens the door for innovation,” McDonald said. Rather than building a better mousetrap to do the same with less, CIOs should be looking for ways to “disrupt the mouse cycle so they don’t ever have to catch mice again,” he said.

• 2. The second shift — more subtle, according to McDonald — is that the housecleaning CIOs did during the recession left their IT departments with fewer projects to maintain. Companies got rid of those pet projects that kept IT a servant to the business unit that squawked the loudest, he said.

“So, if CIOs think a bit proactively, they can actually start allocating a bit more resources to innovation than they have in the past,” McDonald said. (CIOs at hard-strapped companies may not want to put in a budget request for innovation just yet, however. Call it increasing productivity, instead, he suggests.)

• 3. Finally, Gartner argues that “lightweight technologies” that don’t require a big up-front capital investment, such as cloud computing, Software as a Service and Web 2.0,  will continue to make IT departments more responsive — which is different from being agile (a topic for another blog post).

And there is some data to suggest that the urgency for innovation is only going to grow, according to Gartner. In its periodic survey of some 1,000 CIOs worldwide, about 30% listed “creative new products and services” among their top five problems to address in 2010. Asked to project for 2013, just under half of all CIOs told Gartner that innovation will be the No. 1 issue they have to address.