How to inspire and make way for innovation
One of the joys of being a CIO is having the opportunity to see how other companies approach driving innovation. A couple of weeks ago, I had just such an opportunity when I took a trip to Georgia Tech in order to see how startups, academics, and established companies foster entrepreneurship.
Every company has their own take on what it means to be innovative. For some, innovation is about driving process improvements to get a competitive edge. For others, innovation is about generating disruptive ideas that have the potential to open up new revenue streams.
At Vanguard, we believe that driving innovation means a little bit of both. We also believe that IT plays a key role.
Long gone are the days where IT organizations could play the role of order taker. In order to remain competitive, every technology leader must learn to leverage the entrepreneurial spirit of their employees in order to drive change or launch the next big product. At Vanguard, there are several things that we’re doing to empower our employees to embrace the spirit of entrepreneurship and become innovators.
One of the ways we’ve been able to do this is by integrating Lean Development practices into our project teams. These teams contain a mix of subject matter experts from our business divisions and poly-skilled technologists who work in tandem to quickly iterate through a cycle of proposing ideas, testing them against defined hypotheses, and learning from the results. While shifting to “continuous delivery,” adopting cloud technologies, and breaking apart legacy applications are all key enablers for Lean, the majority of the change is cultural, and it’s something that our IT organization can’t do in isolation. That’s why our first pilots with Lean were joint partnerships with our business partners – including one pilot where we teamed up with the group that manages retirement plans for Vanguard’s institutional clients.
That pilot has yielded fantastic results. In less than a year, our team was able to conduct over two dozen experiments and increase engagement by 16 percent for a subset of retirement plan participants who were actively disengaged.
In addition, we hold a variety of events that are aimed at enabling employees to express and develop ideas that might otherwise be overlooked. One of our biggest success stories has been our Digital Innovation Groups or “DIG teams.”
These teams are composed of volunteers who work on projects to explore how different areas of technology could be applied at Vanguard. Teams are completely self-directed and empowered to work on things that they feel passionate about. We’ve seen some great results come out of our DIG teams. In fact, Vanguard’s first mobile app started as a DIG team project, which enabled Vanguard to be one of the first companies in the asset management space to deliver a mobile app to its investors.
We’ve also adopted the hackathon as a way to pitch new products or technology. Everyone in the company is invited to sign-up, form into teams, generate ideas, and spend two days working on technical demos to propose their concepts. At our last a hackathon, we had a team with an investment analyst, chief of staff, senior architect manager, and developer come together to pitch a new way for Vanguard to aggregate and analyze financial data by leveraging a collection of publically-accessible APIs. The winning team from that hackathon was given an opportunity to pitch their idea to Vanguard’s CEO and chairman as well as the rest of the company.
Finally, we have periodic ideation challenges that encourage everyone in our IT organization to pitch an idea via a home-grown online platform. Everyone is then given an opportunity to give a thumbs-up or thumbs-down vote to each idea. We get thousands of votes for ideas through this system.
Last year, several of the top ideas were presented to our executive team. We were supposed to pick a winner, but I copped out and funded all of them. At the end of the day, I couldn't pick – there were some really great ideas that all deserved attention.
At every level of the company, there is an advantage to empowering people to experiment, challenge the status quo, and grow. Today, we have to keep up with technology – there is no other choice. When we signed up to be technologists, we signed up for change. As IT leaders, it’s our responsibility to give our employees the tools and support they need to be leaders of that change.