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How IT Can Trigger A Business Innovation

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Donagh Herlihy | CIO | Avon

This is an instance for me of how IT triggered an innovation. It will be a business innovation, because in my mind there is no real, valuable innovation that’s purely an IT innovation. We have about six million Avon representatives active at any point in time. They're not employees of the company, but they're independent entrepreneurs who sell our products. They make money based on the discounts that we apply in our sales to them. The people they sell to tend to be friends, families, coworkers—in other words, their network. When I joined the company, what struck me was the synergy between the ideas of Web 2.0, social networking, social media, and that migration of people to online networking between individuals and the way our representatives work with and sell to their customers. I remember I was in Thailand. It was an executive committee meeting, and it was my second month in the company. I came back and said, "Look, I've appointed myself as a representative. I've gone into the field. I've gone to the coal face.” We were talking broadly about technology innovation and our strategies as a company. I started talking to the executive committee about this idea of the Web 2.0 synergy with our business model. You could see a couple of people got it, because a couple of people were on Facebook, LinkedIn, or one of the platforms and understood the online network effect and the impact of friends and so forth. But you could see most of the people didn't get it, because they are a generation removed from the daily use of this technology. I brought somebody from outside the company in to meet with the group, and we went through the landscape of everything Web 2.0, from blogs and wikis, social meeting platforms, and so forth. It was an education level setting exercise. At the end of that, when the committee was engaged, we posed the question again: Do you see any kind of relationship between these individual consumers—how they're using technologies—and our business model? The lights were going off in people's minds. They could start to relate to it. Then it was a case of going through a process of saying, "That's fine. How do we make it grounded? Where is the business value credit for the representatives? Where's the business value credit for Avon? How is this something that's driven by a business strategy rather than just another cool technology that we play with and we experiment with?" We did research in the field in four countries. We went through a strategy-setting process that was informed by the voice of the customer and some research. Then we came back with three projects—three concepts if you like, not projects—three concepts, to the executive committee, mock-ups of what we felt we could do with feedback from representatives as to the value to them if we're able to deliver those platforms. The key here was we were biting it off one step at a time: education, aligning people around a hypothesis, testing the hypothesis with the customers, and then doing very quick-and-dirty concepts in mock-ups. Again, we’re testing that, and so at each stage of the process, the innovation process, we’re narrowing in on a design, but we're not committing much funding or much resourcing up front.

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