The intersection between HR strategy and HR technology


Operational Innovation – Guidance from the Top

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IBM’s global survey of CEO’s briefly mentions operational innovation as one of the keys to mitigating external threats and maximizing organizational agility for new opportunities. In HR we constantly talk about operational efficiency and effectiveness, especially on this site where technology applications to business are of particular interest.

However, most of the time we’re internally focused – how can operational efficiencies be applied to make our own lives easier? We should also be mindful that our efficiencies make us more prepared to launch a new product group or participate in acquisitions.

More than a few CEOs ranked operational innovation at the top of their priority lists, viewing it as a matter of survival. “We had such a large operating loss that we had to focus entirely on a financial turnaround.” Highcost, slow-responding, inefficient and antiquated are the adjectives CEOs used to describe the aspects of their current operations that prompted them to concentrate on operational innovation. One CEO stressed the enormity of past inefficiencies by labeling his enterprise’s operation “a cross between a government agency and a church.”

Though most CEOs still thought of operations innovation as an efficiency play, others saw it as dual-purpose. Newfound efficiency and effectiveness not only allow them to control costs, but also help them to compete more formidably, take share and grow revenue. One CEO explained: “although the main focus is strategically on revenue generation, we first need to create the operational and technological foundation for that growth, so that product and customer strategies are sown on fertile ground.” ((IBM. 2006. “Expanding the Innovation Horizon.))

Taking the opposite of the CEO adjectives, we should be focused on:

  • Cost effective (not low cost)
  • Agile (not necessarily faster)
  • Efficient and effective
  • Forwardly thoughtful products and processes.

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