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Lessons for CIOs in a city's bid to build an innovation culture

Building an innovation culture remains the biggest challenge companies face in their digital transformation efforts. The public sector offers a model.

CIOs aiming to build a culture of innovation at their companies may want to turn to the public sector for inspiration.

City and state governments have become a test bed for the innovation org chart. In Chicago, Brenna Berman is a CIO who oversees technology and innovation; in Boston, a team known as the New Urban Mechanics seeks out creative solutions to critical issues such as housing and transportation. And in Louisville, Ky., a director of innovation has been part of the mayor's staff since 2011.

Across the country, the chief innovation officer title is showing up on government rosters. While the position has not caught fire in enterprise companies, the structure and aims of these government innovation officers have a lot to say to enterprise CIOs who are helping their companies innovate. Consider the work of Ted Smith, the former chief of civic innovation for the city of Louisville and now CEO at Revon Systems Inc., a medical software company.

A chief innovation officer case study

When Louisville Mayor Greg Fischer came into office in 2011, he promised to take his business acumen and apply it to city government. To help fulfill that campaign promise, he introduced an office for innovation and appointed Smith, a healthcare tech entrepreneur, as its director. "He wanted to send the message that cities working at a high level of efficiency and operation need to have dedicated resources [for innovation] -- that you can't just tell people, 'also be innovative,'" Smith said.

Ted SmithTed Smith

Unlike in other city and state governments where innovation often translates into improving how government operates -- allowing constituents to pay city fees online, rather than in person, for example, Smith broadened his purview. He described the difference as innovation inside government versus innovation that government encourages -- and said that he was firmly in the latter camp. By 2014, Smith's title reflected his philosophy: He had become the chief of civic innovation for the city.

"If you have the distinction of being the leader of innovation, I think you have this immediate challenge of how will I define the scope of my work," he said. "The least effective innovation leaders are essentially joiners. They join meetings and efforts that are going on in city government, and they add their ornament to the tree. I encourage my peers … to tackle something ambitious and be willing to be at the front of the parade -- not just in the picture."

Smith deliberately took an anti-Chamber of Commerce approach to his work: Rather than highlight the things Louisville does best, he made it a point to collect what he called the "worst lists" for the city. "The worst lists were a great resource for me to look at the challenges in this community compared to every other community in the country," he said. "And we are consistently one of the worst places to live if you have a breathing disorder -- asthma, allergies, COPD."

Indeed, Louisville consistently ranks as one of the top 20 worst cities to live in with asthma, but asthma isn't a public health issue and, therefore, was not considered a problem city government needed to solve. Or at least that was the thinking before Smith became the city's director of innovation.

Big data and air pollution

Louisville's high rates of asthma are often blamed on its location: It's in the Ohio River Valley, a heavily industrialized area that experiences temperature inversions making it hard for pollution to escape. But the air quality's effect on asthma attacks was more accepted wisdom than fact, and Smith wanted better -- and more granular -- data.

He raised funds to distribute 300 Wi-Fi enabled rescue inhalers for a pilot project. The inhalers "create the perfect signal," Smith said. "If you lean on your rescue inhaler too much, you're highly likely to be headed to the ER soon."

In 18 months, the data began to reveal clusters of asthma attacks, which said to Smith that asthma prevalence in Louisville was about more than geographic location. "We should have seen [the attacks] equally distributed everywhere if the Ohio River Valley was to blame," Smith said. "Clearly something else was going on."

The event data led to "all sorts of fancy big data work on what is correlated with, in a statistically significant way, these clusters," Smith said. He considered a long list of potential correlatives -- from humidity and wind to time of day and proximity to a road. One correlation stood out: particulate matter air pollution, a mix of tiny particles and droplets of liquid.

Smith attempted to find air pollution data so that he could take a closer look at the correlation, but he soon found that the kind of data he needed didn't exist and low-cost air monitors weren't reliable enough to provide that data. Instead, he partnered with a researcher at the University of Louisville who specialized in toxic exposure and led an initiative to build out "green infrastructure" -- plant life that can help filter air pollution -- in areas that experience higher rates of asthma attacks.

Smith's efforts caught the attention of the Robert Wood Johnson Foundation, which provided additional funding for another 1,000 smart inhalers for the city and enabled the city to continue collecting data on asthma attacks. "We're not trying to completely and perfectly describe asthma," he said. "We're really trying to work on policy solutions, we're trying to work on program solutions, and we're trying to figure out who all the right stakeholders are in those cases to get the work done."

Chief of innovation culture

In Smith's case, solving a major problem for the city led him headlong into the type of big data projects that CIOs and other IT leaders are increasingly being asked to do for their companies. Indeed, Forrester analyst Nigel Fenwick said the title of chief innovation officer isn't a popular one in the private sector precisely because it overlaps with other executive IT job descriptions.

"A large part of the job of a CIO, a CTO or a chief digital officer focuses on innovating with technology to create value for customers or operational productivity," he said. In this day and age, that job is closely tied to driving digital business transformation.

Nigel FenwickNigel Fenwick

According to Fenwick, CIOs who want to help define what innovation means to their companies don't need a title. (In fact, there's an argument to be made against instituting a chief innovation officer: Companies risk innovation becoming an ivory tower endeavor, he said.) They can essentially become a director of innovation by focusing on building "an innovation culture across the enterprise so that innovation is part of the way the company operates," he said.

By innovation culture, Fenwick is referring to a company's ability to be entrepreneurial, agile, take risks and even absorb failure, characteristics which fly in the face of how large companies have historically operated and which will not be easy to inculcate. Five years into digital business transformation research, Fenwick said culture -- building an innovation culture -- remains the biggest challenge a company faces in its transformation journey.

Moreover, CIOs who are focused on cultivating the right tech talent for their departments contribute to the challenge. Fenwick's research indicates that soft skills are more critical to changing an organization's culture than technology skills. And those soft skills, which are used to usher in process changes successfully, are in short supply.

"Getting an organization that's comfortable with stasis to become comfortable with change requires diplomacy and influence -- skills more typically associated with human resources than with the technology group," Fenwick wrote in "Organize Your People for Digital Success," which was published in January. Indeed, he advises CIOs to partner with their HR counterparts to help identify employees with the soft skills needed to shape the culture.

Another bit of advice on building an innovation culture: The metrics by which people are measured and compensated for will almost certainly have to change. "Measuring people on the wrong things leads to an imbalance of priorities," Fenwick said. "It's hard to change the culture without changing the metrics."

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