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Top CIOs Say Social Networks Now Drive Innovation

by Joe McKendrick

January 14, 2010 at 5:25 pm · Filed under 2.0 Design Thinking, Enterprise 2.0, Enterprise Software, Event Announcements, Social Computing, Social Media, Social Networking, Web 2.0

Increasingly, large companies are turning to social media strategies to get closer to their customers, and thus get new ideas out to market faster. I had the opportunity to observe a panel at this week’s National Retail Federation show in New York, in which the CIOs of Wal-Mart, McDonald’s, and Best Buy revealed how social networking was changing the way innovation was being driven through their organizations.

David Grooms, CIO of McDonald’s, said his company’s challenge is to focus on and engage customers at all levels. Most recently, the restaurant chain put in free WiFi networks across all its 11,500 locations — as a result of engaging customers through social media channels. “We were listening to customers, blogging and tweeting,” Grooms explained. “It fits where we’re going.”

Neville Roberts, enterprise CIO of Best Buy, said there’s a lot of pressure to stay ahead of the competition in the fast-moving electronics retailing businesses. “A lot of our revenues come from innovation, but it gets copied quickly,” he said. “We have to get innovation out there quickly. We have to bring things to fruition quicker than everyone else.”

Part of Best Buy’s strategy to maintain this speed to market is through social networking. “We engage in listening to customers, and that’s done through social networking,” Roberts explains. “Social networking and the views coming through there is a very important channel for us.”

The keyword coming out of this CIO summit was “innovation.” The challenge was knowing where the obstacles to innovation are, and working more closely with the business to unleash the creative forces of the business, the CIOs agreed.

Not such an easy task, of course. First of all, there aren’t many technologies particularly unique that give one company an edge over another. With information widely available across the Web, and IT offerings fairly standardized, a company’s secret sauce — be it processes or technology — cannot stay that way for long. “There are very few secrets out there anymore,” said Rollin Ford, CIO of Wal-Mart. “The only competitive advantage becomes the speed aspect. Organizations need to keep embracing innovation and new technology models. At the end of the day, it’s about getting from point A to point B quicker than everybody else.”

Rollin illustrated how Wal-Mart recently was able to cut a lot of costs through social networking strategies. “We conducted a blogging exercise on energy conservation,” he related. “We had more than 6,000 posts with ideas from employees, and saved millions in energy costs as a result.” For example, he said, one employee posted advice to take the light bulbs out of the drink machines in store stockrooms. The additional light in the machines wasn’t even necessary, he added. “As a result, our savings by taking that one light bulb out of the machines was $1 million aggregated across all our locations.”

Corporate IT departments need to recast their roles, from strictly technologists to enablers of innovation, the three CIOs agreed. Social networking has become a critical part of this shift. “Our role is to foster a culture of innovation,” Roberts said. “when good ideas come forward, we need to spend time pushing these ideas to the next level.”

“You have to wake up every day and say, ‘What are we missing?’ Rollin added. “Every day you have to get up and run faster than the next guy.” This “healthy paranoia” wouldn’t necessarily be a hardship on staff members either, he added. “People don’t want to do the same thing everyday. They want different challenges.”

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RotkapchenJanuary 14th, 2010 at 10:03 pm

“Corporate IT departments need to recast their roles, from strictly technologists to enablers of innovation”

Can we get this in neon please?

Mary KurekJanuary 16th, 2010 at 6:38 pm

Joe – referring to this posting (and linking) in a blog posting I’m putting up now at my site “If you were an innovator – what would you be doing right now?”

Joe McKendrickJanuary 20th, 2010 at 11:24 am

To: Mary Kurek

Thanks, I look forward to seeing the posting! Great site, by the way!

Joe