I’ve spoken with many CIOs recently, and it’s fair to say the role is changing. Not long ago, it was fine for them to dedicate about 80% of their time to optimizing and ensuring the uptime of key business systems, and for the remainder, to peer over the horizon at what was ahead for the business or technology. Really, they were “KTLOs,” as their main obligation was to “keep the lights on.”

Now, with business leaders increasingly tying their future strategies to social, mobile, analytics, cloud and other digital technologies, KTLO is no longer enough. CIOs need to flip that 80/20 ratio and transform into a new kind of CIO, that of a Chief Innovation Officer. The new mandate is to reduce the time and resources dedicated to day-to-day operations (using the cloud and as-a-service models) and transfer those resources to create competitive differentiation through technology-enabled innovation.

An example highlighting this shift in focus to innovation is Werner Schultheis, CIO at Randstad Germany, who says he now spends 70% of his time on activities that promote innovation, such as defining business roadmaps with executive colleagues, creating workshops to introduce the company to new technologies, and generating IT-enabled business ideas. According to Schultheis, “Most business innovations are coming from IT.”So, how can CIOs build a culture of innovation within the IT organization and the enterprise itself? I offer a simple formula: People + Process + Space = Innovation Culture.

CIO_KTLO

I will discuss details of each of these components in an upcoming series, but here’s a brief summary:

  • People: It takes a new set of skills to go beyond just working with tools and technologies and applying them to business strategy. In addition, key innovation frameworks like Design Thinking bring the perspective and understanding the needs of the end user to the table. This is important because the end user is the ultimate consumer of any solution that will be produced. So understanding their needs, in addition to the business and technical requirements, will ultimately lead to a more successful solution.
  • Process: Innovation requires a different way of working, one that is agile and iterative. The Design Thinking framework offers this process from beginning to end, and takes a human-centered approach to ideation and implementation, leading to more inspired innovation.
  • Space: It’s not easy to brainstorm new approaches and ideas when sitting in a cubicle or traditional meeting room. CIOs can help inspire employees, partners and customers to loosen their ties and think outside the box by providing a place for innovation, with a stimulating environment that encourages creativity.

When CIOs put this formula to work, they will be more successful at meeting the innovation mandate. Many CIOs are already making this transition. According to a recent CEB survey, CIOs have shifted “KTLO” spending from 63% of the IT budget in 2011 to 57% this year. For CIOs who have yet to begin, the time for transformation is now. It will take some time to accomplish this organizational shift as it is a journey of continuous learning.

Note: This article was originally published in Business Trends on the SAP Community Network.

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