A Framework and Process for Innovation

1. A Framework and Process for Innovation Robert Urwiler, CIO, Vail Resorts CIO 100 - August 26, 2008

2. Talking “Innovation” • 2008 State of the CIO survey: Innovation to be #1 impact on the business in 2008 • CIOs cite growing importance of innovation in their roles • Confusion over what constitutes innovation: One CIO’s “innovation” is another CIO’s “IT 101” • Within organization, lack of common frame of reference causes dubious claims, false starts, cynicism • Difficulty analyzing innovation in the IT portfolio

3. One step forward: An Innovation Framework CIO Executive Council asks: Across what major dimensions do “innovative” initiatives vary or differ from each other? Can we use those dimensions to model and classify types of innovation? Can a classification framework help analyze the state of innovation for the IT-business portfolio?

4. Other possible dimensions • Cost • Timelines • Revenue • Productivity • Patentability • Risk Classifying Innovation: Three Major Dimensions • Degree of change • Incremental (sustaining) • Breakthrough (disruptive) • Focus • Internal • External • Intention • Planned • Serendipitous

5. Visualizing the Framework

6. Degree of Change (Adopt to Invent) Envision & Invent Connect & Recombine Integrate & Improve Adopt & Implement

7. Focus (Internal to External) New customer segments & even new markets Internal operations and corp. functions Current customer base IT function

8. Intention (Planned to Serendipitous) Inspiration capture Openness to pursuit Broad goals and dedicated resources Specific goals/projects

9. Examples Manhattan Project Xerox PARC (1971-75) VisiCalc Pentium III

10. Example from a 2007 winning CIO 100 application • Mission: Transform Company X’s infrastructure into a single, secure, global network for voice, video, and data, creating global communications network for the company. • Elements: • Leverage existing data infrastructure • Improve operational efficiencies; reduce operating costs • Increase work force productivity and mobility • Consolidate the network and data center • Creative use of outsourcing • New technology adoption • Seamless call routing

11. Consolidating data centers Integration into existing systems Seamless customer call routing Operational efficiencies Creative outsourcing Workforce productivity & mobility New technology adoption Plotting the Example

12. CIO Innovation Award Analysis • Analyzed 40 innovation award submissions • Planned projects • Combo of adopting, integrating & improving • Mostly productivity focused, not customer focused

13. Given this pattern….a few considerations • Breakthrough inventions are rare. There’s profit in the relatively mundane • Is IT in a position to initiate and drive external-facing innovation? • Where are the small, fast pilots that iterate into something bigger? • Where is serendipity? Can you capture unplanned innovations? Let’s look at a process that’s producing external-facing innovation…

14. Vail Resorts • ~ $1B top line revenue • 3 Divisions • Ski Mountain Operations • Hospitality • Real Estate Development • 5,000 – 15,000 employees • Over 1.5M unique ski visitors per year • Our Mission: • “Extraordinary Resorts. Exceptional Experiences.”

15. Creating context for innovative thinking Vail Labs A Guest Experience Idea Incubator

16. Focusing on the Guest Experience Lifecycle Considering the Guest Interaction from “Inspiration” through “Reminiscing” Focusing on the Guest’s perspective (not ours) Being an advocate? Ski Vacation? Staying connected Discovering Sharing the memories Discussing Returning home Planning Recognize the many Guest Personas and their needs Capturing the moments Configuring Exploring Sharing Getting around Booking Anticipating Getting bearings Preparing Arriving Traveling

17. How does it work? • Vail Labs is a philosophy versus a place or person – the process is loose by design • The “guest experience” message is constantly reinforced within IT • Ideas are sent to the CIO and vetted by the IT Leadership Team • Ideas having potential are assigned to a team for exploration / next steps • It works for us!

18. Vail Labs Process Idea Viability / Potential? How to prove? Proof of Concept Business Sponsor / Funding? Pilot ROI / Value / Impact / Support Plan? Production

19. Rules • Vail Labs Rules • All Ideas will be considered • Proposed Proof of Concept must be “Cheap or Free” • Concept testing cannot jeopardize the guest experience or interfere with mountain operations • Concept testing results must be qualitative and quantitative • Pilot consideration requires a Business Sponsor and funding • Production requires complete readiness assurance

20. What has Vail Labs yielded? • Recent Graduate • RFID-enabled ski passes • Under consideration / POC • Mobile Friend-Finder • Mobile Mountain / Village Navigator • Mobile Twitter “Follow The Mountain” • Thinking about • Social Networking • Desktop Widgets • Web 2.0 Tools • Location-Based Mobile Apps • 3-D Mapping • Surface Computing • Video / Podcasting / Webcam Streaming • RFID Extensions • Digital Signage Extensions

21. Challenge • Understand that breakthrough external innovation often comes from those who aren’t responsible for the status quo • Start thinking about innovation from the external customer’s perspective – what does innovation mean to them? • Look for ways to enable real competitive differentiation for your enterprise • Test a customer-focused breakthrough idea THIS YEAR

22. Innovation Framework – On Post-Conference Site Backgrounder on the Council’s Framework