Gartner Information Technology Research

Expand Trend Radars and Stress-Test Innovation for Gray Rhinos Such as Coronavirus

Published: 15 April 2020

ID: G00722713

Analyst(s): Nicholas Evans, Peter Skyttegaard, Michelle Bazargan

Summary

CIOs leading innovation, disruptive trends and emerging practices can lend immediate strategic support to their business counterparts in times of crisis by leveraging their proven trend detection processes and the collaborative, agile resources of their innovation programs.

Overview

Key Challenges
  • CIOs often have the relatively most advanced trend detection processes across their organizations, yet miss the opportunity to monitor business trends and events, and their secondary impacts.

  • Most “black swan” or “gray rhino” events such as COVID-19 can, in fact, be predicted in terms of “not if, but when,” but are typically excluded from the disruptive trend and technology detection process.

  • Innovation processes are not stress-tested so there is limited insight into how quickly urgent items for the innovation pipeline can be successfully piloted, tested and deployed.

Recommendations

As CIOs leading innovation, disruptive trends and emerging practices, you should:

  • Develop the ability to detect and anticipate disruptions by expanding the scope of your trend detection radar and processes to incorporate business trends, events and their secondary effects.

  • Anticipate the unexpected by searching for black swan and gray rhino events — including them on your trend detection radar, and making innovation capabilities available on demand.

  • Prepare for rapid response innovation to critical business challenges by routinely stress-testing innovation processes so that promising solutions can move swiftly through the innovation pipeline from concept to value.

Introduction

In times of crisis, not every solution or fix can be pulled off the shelf.CIOs are in the unique position to be able to inform the business on “what if” trends and events — including their secondary effects. They can support and lend vital assistance to the business via their innovation programs and capabilities.

While the knee-jerk reaction is to suspend all innovation in times of crisis, more thoughtful organizations turn to innovation to help problem-solve for the business and utilize its resources. From trend radars to collaborative virtual innovation workshops to rapid experimentation, CIOs can use these tools to solve and implement solutions for critical problems faced across the organization.

Whether these innovation programs are large or small, mature or nascent, they likely have key capabilitiesthat can be leveraged in times of need. Innovation departments are established to take complex, high-uncertainty business problems and rapidly design and test solutions. Rather than seeing this as a prioritized activity in times of disruption, CIOs should act now to direct these core capabilities to focus on solving the complex issues of any given disruption or crisis.

In addition, by expanding the scope of their disruptive trend detection processes and stress-testing their innovation programs for rapid response innovation, CIOs can be well-prepared to lend immediate assistance during the next major business disruption.

Analysis

Many corporate innovation programs leverage an emerging technology radar or other forms of trend detection processes to explore and exploit emerging and disruptive technology trends meaningful for their business. Typical examples include strategic technology trends such as artificial intelligence (AI), autonomous vehicles, blockchain, Internet of Things (IoT) and even quantum computing.

These opportunities may be missed because they don’t see the trends as part of their purview and scope, or they may be too focused on “run the business” and not transforming or pivoting the business. There is tremendous opportunity to switch mindsets from a reactive focus on running the organization to a proactive focus on leading the organization to meet the changing environment.

By assessing your portfolio mix across tech andnontechtrends, and determining the mix that’s right for your organization, you can expand the aperture of your trend detection radar to help inform the business in times of business-as-usual activity as well as in times of critical need (see Figure 1).

The portfolio assessment should incorporate a thorough analysis of the secondary effects from each disruption as well as the creation and dissemination of authoritative perspectives gathered from among the relevant subject matter experts (SMEs) across the business. In expanding the scope of the radar in this manner, it will be critical for CIOs to expand the scope of their contributors to include all relevant SMEs from across the organization.

Figure 1. Recommended Actions to Expand Disruptive Trend Radars to Include Business Trends, Events and Their Secondary Effects

Assess the portfolio mix of your trend detection radar across both tech and nontech trends Your innovation context defines the focus of your innovation program in terms of a number of variables including staffing, scale, target, time frame, trigger and technology focus (see ).

The portfolio mix of your trend detection radar in terms of “technology focus” can be measured by the percentage of technology-enabled items on the radar compared to the overall total. If your target focus is 80%, ensure at least 20% of items on the radar are non-tech-related. Non-tech-related trends may include business, industry, economic, environmental, government, geopolitical or societal trends, events and disruptions (see ). The key consideration here is that we are moving to an era where tracking digital disruption alone is no longer sufficient.

In the same way that digital disruption exists in a virtuous circle with innovation and transformation, business disruption also exists in a virtuous circle with all of these elements. Business disruption can interrupt, guide or result in any of these forces of disruption, innovation and transformation.

Determine the mix that’s right for your organization and rebalance your portfolio regularly — Given your innovation context, review the percentage of non-tech-related trends on your radar as well as the percentage of non-tech-related initiatives underway within your innovation pipeline. It’s perfectly fine to have different percentages for the radar versus the pipeline, depending upon your innovation profile (i.e., business goals, innovation goals, context and principles) (see also ). Your radar is essentially your future view and your innovation pipeline is what’s currently in process.

If either of these numbers are less than your ideal mix (which may vary at any given point in time based on your goals), work to rebalance your radar and your portfolio on a suitably planned cadence, such as quarterly. You can do this by explicitly adding significant nontech trends to your radar and assigning suitable innovation team members and/or other innovation scouts or SMEs to each trend from across the organization.

With these expanded team members now contributing to the trend detection radar, it will be critical to provide training and education on the end-to-end process, as well as setting clear roles and responsibilities, guidelines and expectations (see ).

Immediate Action:Examine the secondary effects from each disruption Ensure each disruptive trend has information and documentation related to anticipated or observed secondary effects and discuss these secondary effects among relevant stakeholders and subject matter experts early and often.

For example, while the need for remote work solutions and technologies are a clear secondary effect from COVID-19, other secondary effects may include the need for 100% virtual techniques to continue to innovate. This may include the need for tools that effectively support virtual ideation sessions as well as virtual design thinking sessions.

Secondary effects caused by different times may also require different measures. As noted in software toolsets that work best for rapid, event-based ideation may be completely different from typical enterprise innovation management software platforms because they need to work very differently. For these short-burst events, they need to lower the learning curve for participants with streamlined features so they can quickly get up to speed. This enables end users to focus on ideas, elevator pitches, discussion and prioritization, and not expend precious cycles learning to use the software itself.

Due to their scale, business disruptions such as COVID-19 may also trigger secondary disruptions or effects within other emerging technologies (see ). As an example, they may alter the adoption curves and use cases for technologies such as autonomous vehicles and drones. These secondary effects should be immediately explored for their impacts on business and IT strategy.

Immediate Action: Create an authoritative perspective on the disruptionDevelop an authoritative point of view and perspective on these trends and have these materials ready to help inform the crisis response team or business continuity management team, as applicable. One of the best practices here is that not all identified trends or disruptions have to lead to investments in fully deployed or implemented solutions to lend value to the business.

An authoritative perspective in this case simply means a briefing document or material the organization can use to provide an official, formal internal perspective on the topic(s). It should be written by relevant SMEs on point for that specific area with management approval.

The authoritative perspective will likely be drawn from analysis of multiple external sources and then interpreted by SMEs within IT or within the business units to provide the necessary interpretation for the specific organization’s context, industry and environment. A useful way to determine the right “go-to” experts across the organization is to work closely with members of the innovation council or steering committee for their business-unit-specific recommendations.

For IT instigators (i.e., those bringing ideas and solutions to the business) as well as problem solvers (i.e., those solving problems and challenges coming in from the business), when it comes to innovation, even an authoritative perspective can be a valuable source of information, awareness and education (see Note 1).

Most black swan or gray rhino events such as COVID-19 can, in fact, be predicted in terms of “not if, but when”, but are typically excluded from the disruptive trend and technology detection process (see Note 2 and Note 3). Since CIOs have the most advanced disruptive trend detection processes across their organizations, it can make sense to include these nontech trends and to use the disruptive trend process to provide a single source of reference (see Figure 2).

What’s more, the resources of the corporate innovation program can be used to help prioritize events on the radar as well as to prioritize imminent challenges and opportunities that need to be addressed. These resources include innovation workshops and other collaborative processes for brainstorming of ideas and for opportunity prioritization, In this way, the cobbler’s children can have their own shoes and the innovation program can become a valuable resource in times of need.

Figure 2. Recommended Actions to Identify Black Swan and Gray Rhino Events and to Make Innovation Available on Demand

Make a list of non-tech-related disruptions and hold an innovation workshop to prioritize them As non-tech-related disruptions are captured, be sure to categorize them and understand how they may be experienced or manifested as they evolve over time.

  • Black swans True black swan events are not thought to occur in nature so these are the rare events that may well slip past most strategic planning sessions or trend detection radars. Almost all attributes are unknown.

  • Gray rhinos Like COVID-19, we know pandemics and other events such as extreme weather events and terrorism — are out there and may be rushing toward us at any time. The key unknowns are timing of impact and duration of both primary and secondary effects.

  • Disruptive trends While the majority of business and technology trends do not mature to become truly disruptive, a number of them will cross this threshold and become strategic business or technology trends that you simply can’t afford to ignore.

While true black swans are, by definition, unpredictable, a simple technique to identify possible candidates is to brainstorm extremely unlikely scenarios. This is akin to the “coin flip test” where, rather than the probability of 50% heads and 50% tails, if repeated hundreds or thousands of times, it may generate the rare event that the coin will actually land on its edge and roll away.

Unlike the typically negative business disruptions of black swans and gray rhinos, disruptive trends have the potential to be exploited for positive business benefit. Those who utilize them early on can apply them for offensive willful disruption at the expense of those being disrupted (see ).

Help reduce the silos of information on these business and tech trends with a single source of reference Having a singular or coordinated disruptive trend and technology detection process across the organization can help to provide a single source of reference in times when that information is vital and there is no time for ambiguity. To do this effectively requires full collaboration across business units with SMEs contributing their perspectives and insights.

As an example, some Gartner clients have reported they coordinate multiple radar surveillance approaches and activities by way of the chief strategy officer or SVP of strategy and continuously collaborate.

Armed with this single source of reference, urgent as well as more routine meetings can be quickly informed with preread materials and other artifacts that may help them get up to speed quickly. This enables a focus on decision making and solutions as opposed to fact-gathering and fact-checking.

Immediate Action: Make innovation program capabilities available on demand in the event of a crisis — In times of crisis, the organization may need much more than the latest web conferencing software or team sites. CIOs can offer the resources of their innovation programs to help take virtual collaboration one step further.

This may include use of virtual innovation workshops, campaigns and labs to help capture and prioritize risks, requirements or ideas. In this manner, the organization can quickly find and implement appropriate solutions or mitigations depending upon each risk, requirement, idea or challenge.

The benefits of virtual innovation workshops over virtual meetings include:

  • Well-defined agendas and methodologies

  • Quickly capture, discuss and prioritize ideas, requirements or risks

  • Electronic flip charts with ability to build on each other’s ideas

  • Opportunity prioritization to quickly generate cost-benefit matrix

  • Identification “quick wins” and “must haves” for near-term and longer-term roadmap

  • Individual voting helps to gain consensus among participants

  • Electronic audit trail of all ideas, comments and voting

The resources of the innovation program also include the “human capital” resources of the innovation team and its extended community. Therefore, another key action in making these capabilities available is exploring all avenues for sourcing ideas from this community whether it’s via workshops, hackathons or other forms of engagement (see ).

Immediate Action: Use the innovation program to innovate IT In addition to offering innovation program resources and capabilities to the business units as a strategic collaboration tool, CIOs should also run innovation workshops or other types of sessions to quickly determine solutions to challenges occurring within IT as well.

These innovation workshops often have well-defined agendas and methodologies. Therefore, they can be applied as quickly as a swiss army knife to problem-solve without having to reinvent the wheel on the basic process or how ideas are to be captured, discussed and prioritized (see Figure 3).

Figure 3. Innovation Workshop Process Steps

In addition, each person may be seeing something different and may have immediate solutions to share. With predefined mechanisms for ideation, discussion and prioritization, these innovation workshops can help quickly identify near-term and longer-term actions for the strategic roadmap as well as helping to build strong consensus among all involved (see ).

In times of disruption, the crisis response team may procure and implement a number of short-term and longer-term solutions to support business continuity (see ).

The corporate innovation program and its associated capabilities to source ideas and turn them into tangible solutions can be a potential answer that’s readily available and designed for just this type of activity.

The key question then becomes: How quickly can these solution ideas be progressed from concept to value in terms of time to deployment?

A stress test, in financial terminology, is an analysis or simulation designed to determine the ability of a given financial instrument or financial institution to deal with an economic crisis (see Note 4).

By stress-testing their innovation programs, CIOs can perform a similar assessment of the ability of their innovation processes to rapidly deliver solutions when under time pressure or other critical forces.

Figure 4. Recommended Actions to Routinely Stress-Test Innovation Processes

Immediate Action: Obtain the current baseline metrics for your innovation framework To establish a baseline for improvement, determine the key metrics of your innovation program in terms of process productivity (see ). Some key metrics to determine include:

  • Throughput: The speed at which an idea moves through the process from idea to innovation.

  • Total innovation potential (TIP): The total number of ideas submitted.

  • Total innovation reach (TIR): Amount and variety of idea originators.

  • Prototype total: Percentage of new ideas converted to prototype that includes user feedback.

  • Conversion rate: Percentage of ideas that become working innovations.

In mature innovation programs, these figures may already be known. In less mature programs, it may take some quick historical analysis to round up the data. Armed with these metrics, you will have a sense of how quickly you can move an idea through to implementation in terms of days, weeks or months as well as the associated productivity measures.

Record the average throughput in days or weeks for the past six to 12 months and the fastest recorded throughput during the same time period. If you’re offering up the innovation program capabilities in times of crisis, these numbers will be essential data points to have on hand. As an example, some Gartner clients have reported fastest throughputs ranging from four months to as fast as four days.

Devise a stress test for your innovation framework to measure fastest throughput By putting a test project through the innovation process, you can see how quickly it can be implemented. Pick a simple test project that’s low risk, but can still deliver value to the organization. Ensure that the test project still requires all the usual coordination and collaboration across the innovation team and the business unit(s) as the idea moves from concept to pilot/proof of concept/MVP to value.

Strategic assumptions can be documented to help meet the following criteria:

  • Ensure beliefs are explicit and transparent to all stakeholders.

  • Articulate the logic behind a particular plan of action.

  • Define a measurable baseline that can be used to track changes in conditions.

These assumptions will help to make the test realistic and give results that are reflective of real-world conditions that face all the usual pitfalls to scaling innovation (see ).

Repeat the stress test on a regular cadence, such as yearly, much like a fire drillBy running the innovation stress test once or twice per year, you will prepare the innovation team to work well in times of crisis. You will also be able to identify and minimize a number of the typical pitfalls to scaling innovation and moving ideas rapidly from concept to value.

CIOs leading innovation, disruptive trends and emerging practices can lend immediate strategic support to their business counterparts in times of crisis by leveraging their proven trend detection processes and the collaborative resources of their innovation programs. For example:

  • Trend detection radars can provide a single source of truth when it comes to authoritative perspectives on black swan or gray-rhino-like events as well as disruptive trends.

  • Innovation resources such as virtual innovation workshops can help the business brainstorm, discuss and prioritize solutions to critical business problems, going far beyond the capabilities of web conferencing tools.

  • When no off-the-shelf solutions exist, innovation programs that are well stress-tested in terms of rapid response innovation can inspire more confidence that solutions can and will be found.

By expanding the scope of their disruptive trend detection processes and stress-testing their innovation programs for rapid response innovation, CIOs can be well-prepared to lend immediate assistance during the next major business disruption.

Gartner Recommended Reading

Evidence

Note 1: IT Instigators and Problem Solvers

“IT instigators” and “problem solvers” are two of four common innovation patterns found within organizational innovation programs as defined in

Note 2: Black Swan

A “black swan” refers to an extremely rare event that is unforeseen and has an enormous impact. It was coined by economist Nassim Nicholas Taleb in 2001 — inspired by a second-century Roman poet who presumed that such birds didn’t exist and has been applied to such disparate outliers as the 9/11 attacks and the development of the internet.

Note 3: Gray Rhino

A “gray rhino” refers to highly probable but neglected threats that have an enormous impact. It was coined by Michele Wucker, a policy analyst who came up with the term after the 2012 Greek financial crisis.

Note 4: Stress Test

A stress test, in financial terminology, is an analysis or simulation designed to determine the ability of a given financial instrument or financial institution to deal with an economic crisis. Instead of doing financial projection on a “best estimate” basis, a company or its regulators may do stress testing where they look at how robust a financial instrument is in certain crashes, a form of scenario analysis.

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