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April 30, 2007
Cutter Summit 2007 - Rob Austin on Learning from Expert Innovators
“The future belongs to those who know how to create new things.”
- Rob Austin, Harvard Business School.
At the opening keynote for the Cutter Summit 2007 conference, this tag line is what caught my eye in Rob Austin’s assertion for a Cutter Council Opinion entitled, “The Future of IT Value Creation in a Global Economy."
Rob’s is taking the stage right now, and his keynote is on “Learning from Expert Innovators.” I always have loved Rob’s engaging style; it’s a great way to launch the Cutter Summit. Innovation is the theme of this year’s conference.
He starts by saying “Why IT needs a new (business value creation) trick.” I get the sense that he’s going to build upon the Cutter Council report assertion that says the following:
“In developed economies, creating business value with information technology will soon be less about reducing costs and improving efficiency (the traditional cost-side value creation objectives) and more about supporting activities that leads to new markets, products, services, and strategies (revenue-side value creation objectives); many IT managers have cost-and efficiency based management reflexes that prepare them poorly for this shift”.
I am amused and bemused by Rob’s opening slide: he’s showing pictures of the latest hot rage in Denmark as a way to make his point about value creation in IT: He’s showing us – (I’m not kidding here) a designer trash bin: the Vipp. A really cool sexy (yes) trash bin. How has design and innovation managed to create a product (pedagogically interesting?) that is now marketed as a fashion item? It is, unbelievably, hot because of it’s appeal as an ART OBJECT!
A Trash Can as an Art Object. And here’s the punch line. It sells for more than 500 euros. Add about 36% to convert to dollars. “Expert assembly by European craftsmen.” So it’s not even made by low-cost factories in China.
Rob’s point: The action [in this game] is on the REVENUE SIDE of the income statement.
This is about as far as you can get from competing on cost – It’s not about selling well because it’s cheaper, (it’s about selling even though it costs more), because IT’S BETTER. Rob is saying that this exemplifies the change on how we function in the world.
This company has figured out how [creativity and] INNOVATION has made it possible for people to be willing to pay 500 euros or more - for a trash bin.
We (IT) have already done the cost-side trick; now it’s time to do the revenue-side trick – THAT is the future of IT. The problem – as Rob says in the Assertion (above), that most managers have reflexes that prepare them poorly for this.
Posted by Mike at April 30, 2007 9:30 AM
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