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Fusion 2007: Innovation drives productivity in post 24x7 world

You can't work 25 hours a day. So several speakers at the Fusion 2007 CEO-CIO Symposium on Tuesday and Wednesday tried to drive home the point that "work smarter, not harder" is more than just an age-old mantra.

Michael Knetter, dean of the University of Wisconsin-Madison School of Business, summed it up: "When productivity grows, our standard of living goes up," Knetter said. To him, producing more by working more hours and giving up leisure time is "a wash."

The way forward is innovation. At Fusion, attendees focused on information technology and how it can drive business growth and transformation.

By innovating and changing the way they do business, companies can create sustainable advantages, speakers said. Knetter pointed out that the 24x7 work environment, one of the means by which information technology has increased productivity, has a hard limit. In other words, there is no ongoing, long-term growth in the amount of time people can work in a day.

It's business transformation that can create an ongoing upside. Economic changes and new business models are driving future productivity growth. For example, when Tom Koulopoulos, managing director of Perot Systems' Innovation Lab, named what he thought was our greatest innovation in the last hundred years, he had an unusual answer: affordability.
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"It's not innovation if it's not being used," he said. "Innovation has to get into the hands of people. Lots of people. Affordability causes that to happen."

Making changes

"Most people who wake up in the morning are pretty comfortable to go back to work and do what they were doing before," Knetter said.

Organizations derive the will to change from bottom-line incentives, internal leaders who sell changes as something the organization needs to do, and competitive pressure. Most of the audience felt competitive pressure was the most influential of the three, or at least the most common influence.

As for the bottom line, Knetter said cost-benefit calculations are rightfully influential in deciding where to apply innovation efforts, but they can miss benefits down the line because IT innovation "opens up new vistas of innovation you couldn't have seen."

In other words, the business of innovation, unlike closed-ended capital investments or improvements, can lead to entirely unexpected benefits.

Home advantage

In between warnings that a leadership position in innovation is still open to any nation that can pull together the combination of talent and culture, Knetter and Koulopoulos listed several advantages that may give the U.S. an edge:

• An approximately 70 percent increase in the rate of U.S. productivity growth in this decade versus the past two, fueled among other things by information technology capabilities.

• A cultural acceptance of failure and risk. Koulopoulos said he rarely finds cultures outside the U.S. that are as tolerant of failure, and less risk-taking leads to less innovation.

• Labor laws that allow people to be fired more easily than in some other places of the world. While it's not pleasant to be on the receiving end, Knetter said firms in countries such as Germany and Japan are experiencing problems changing their way of operating because of difficulty changing their workforces.

• A higher education system that Koulopoulos said is still clearly the best in the world, despite attendees' concerns about the skill sets of graduates and the size of the workforce pipeline.

Editor's note: This is part of a set of articles covering the Fusion 2007 CEO-CIO Symposium. Links to more articles will be posted as they are published - including more on workforce, one of the most pressing concerns facing the executives at Fusion 2007.

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