Bimodal IT is a term coined by Gartner as digital systems started evolving in 2012. Bimodal is a practice whereby organizations manage two separate modes of IT operations, ideally within a coherent work culture. One mode focuses on stability and operational efficiencies, while the other drives agility and innovation. The very thought of bimodal IT is debated, abhorred, and/or loved by a diverse set of practitioners.
Churchill Club in the San Francisco Bay Area assembled CIOs and CTOs from software/hardware product and enterprise settings at a private dinner to share their experiences, along with leading analysts who debated the concept of bimodal IT.
The discussion among 23 individuals around the table was lively, and all of the CIOs and CTOs contributed with their own set of experiences and challenges. My assumption is that, like me, everyone headed home enriched from the discussion.
Enterprise success depends on the ability to drive both top line and bottom line. It is driven by the longevity of various ingredients which allows an organization to stay ahead of its competitors. Essentially, every large organization at a certain size struggles with innovation. How does an organization balance innovation and operational efficiency? This pervasive issue led to the definition and practice involving bimodal or multimodal IT.
The moderator pointed out that any incremental improvement in technology and business is performed in the name of innovation. However, over a period of time when business models have changed dramatically, perspectives about what constitutes innovation has changed as well.
There is not necessarily anything right or wrong about any given approach—rather, it all boils down to the best practices IT leaders and their organizations adhere to, to maximize success within their organizations.
During the discussion, various problems were viewed and analyzed through multiple dimensions. Commonality across a few of those dimensions for bimodal or multimodal IT were human capital (talent), culture, process, and budget (finance).
Human Capital (Talent):
There was consensus that talent is key to any organization’s success. There are different sets of people with different skills and mindsets, and the secret sauce lies in managing these different types of talent. Some of the participating executives talked about how the “two in a box” model worked towards achieving their goals. Others talked about the importance of identifying the right person for the role—be it disruptive innovation or operational efficiencies. Many executives expressed a belief that innovation does emerge from incremental improvement; others opined on the need for disruption of the business model itself. How they organize talent stems from these beliefs.
The discussion included experience around outside-in talent versus hunting for innovation catalysts within an existing team. Managing talent by hiring from outside or promoting from inside is an issue faced by every innovative organization.
The culture of an organization drives its success for the long term. This is one of the biggest challenges upon which everyone in the room agreed. There is no “one size fits all” solution; however, it was interesting to note various observations on how Silicon Valley organizations deal with their challenges. I will highlight some of them without naming the company or executive:
- Bring the naysayer and the innovator together to create success for the organization. Take care to choose individuals who will benefit from the tension from their disparate points of view.
- Create a stand-alone team to address certain challenges, and encourage the team to take a three-month break to understand the business and come up with innovative ideas and suggestions leading to concepts and
- While fostering ideas bottom-up, innovation also needs to be encouraged top-down through various measures. A business model around a showerhead was discussed, illustrating how a model can be flipped on its head to innovate and think differently. In this instance, support for moving ahead came from the CEO.
- Spin innovation out as a new entity. In some examples from the group, innovative ideas were allowed to spin out as separate entities and grow into multi-billion dollar businesses. It is OK to kill a business model if it does not succeed.
- It is important to build a sustaining model where any spin-out innovation is brought back into the mainstream business for the organization to reap benefits of such innovation by building capabilities within the mothership.
- There was partial agreement that disruptive innovation needs physical segregation of human capital to ensure that the thinking and implementation are more lateral than incremental.
- In terms of both culture and process, it was agreed that most innovation is still incremental.
How do you play out culture to a process OR drive culture through process? There was significant debate around this issue. Process is one area where both bashers and lovers of bimodal IT had the most varied opinions. While some felt that the team of innovators and operations folks should be together from day one, others felt there was a need for them to be kept separate. I am not sure if there is a proven method which has seen consistent success to be standardized. Each company is unique in its business, culture and process. They are governed by key guidelines for growth in top line and bottom line alike—and approaches to these guiding principles are different. I will highlight a few of the interesting points raised during the conversation:
- Sparkathon is one of the ways to foster innovation. In the discussion it was bracketed under emerging services. It was driven by the idea of building minimal viable traction (private concept to private beta to public beta to GA) and then leading to folding it into the mothership for concept to commercialization.
- The two in a box model was adopted to drive incremental improvement through logical progression towards innovation.
- One of the executives brought up an important point about measuring innovation. Research in an organization is measured with an outcome/expectation. Measuring a balance between an incremental innovation (coming from ops) and someone who flips the entire business model/paradigm is equally important.
- Organizing principles of innovation/ops efficiency should be driven top-down. It is a cultural mindset and it needs to be implemented as process through different metrics.
Money, at the end of the day drives significant behavior in an organization. Most of the executives in the room, including the analysts, agreed that funding plays an important role in how innovation is encouraged. In some cases, bootstrapping drives innovation. In others, acumen and intuition to spend money to drive innovation play into guiding principles that can lead to success. Again, there is no wrong or right approach. Each organization and its leaders apply different metrics/measures/models unique to their environments to be successful. Here are a few that came out in the discussion:
- Make the innovator and operations teams work together to fuel incremental innovation and showcase savings. These savings can then get pumped into branch-out innovation.
- Fund any new ideas as startups. Vet them through their business model and feed them with funding only when they meet their milestones.
- True innovations are not necessarily measurable and it needs to be identified how to create the right balance.
- One analyst spoke about creating different portfolios to manage different aspects of innovation (be it ops officer, intelligence officer, or CTO) and fund them accordingly to fuel innovation.
One attendee, who works with a spectrum of companies from Y Combinator to Fortune 500, had interesting data that he contributed at the close of the group discussion. Most of his clients, who are Global 1000 enterprises outside the Bay Area, foster innovation through startups spun out of their need. However, 80% of these do not return to the mothership, because organizational leaders fear adverse effects on the mothership itself. There are a total of 785 startups which are an output of the drive for innovation by large enterprises that have set up innovation labs (integral or independent) in the Bay Area.