Dell’s Global CTO Reveals How Businesses Can Keep Innovation Alive

Continual learning and experimenting are important because these efforts build skills and capabilities that a business can apply to foster innovation skills.

“The ones that successfully do that – who get to the point of feeling like they’re comfortable in new areas – are the ones best prepared for actually applying innovation,” Roese says.

By way of example, Roese explained what’s currently happening around the investigation and testing of generative artificial intelligence (AI) within Dell. Within the company, research organizations have been experimenting with AI for a decade.

“It hadn’t really been applied,” he says. “Then, when generative AI popped up and all of a sudden you have large language models…we felt very comfortable asking, how can we apply this new AI language model to change our business trajectory?”

Dell’s AI skill set had been honed and the company was ready to use the technology in innovative ways.

“We have found other organizations, where no one had the job description of being an AI person, were starting this journey into generative AI in a very uncomfortable position,” he says. “They barely understand what AI is. They don’t understand generative AI systems and they’ve never pragmatically operated one or even tried to make them do anything.

“I’m a continuous learner and believe that nothing is perfect or is ever ending,” Roese adds. “We learn all the time and continuously invest in it. That’s the starting point of any innovation culture. It isn’t the innovation outcome, but it is a very important pre-requisite. 

Roese says he fought for years as a CTO to help the organizations he worked for build innovation abilities. He notes that a fundamental flaw of many non-innovative organizations is that they can’t translate their learnings into innovative things that materially impact the business. Innovation needs to be done in the open by working with your customers and others who likewise compete in the market.

“Customers see the problem faster,” Roese says. “They give you other dimensions to help you learn more quickly and to understand the technology. Most importantly, when you’ve gone through the (shared learning and ideation) process, the customer and you have gone on a journey together. So, taking an innovative technology and getting people to adopt it is much easier if the people who are (expected) to adopt it were part of the process to create it.”

Can innovation happen in isolation or without collaboration? Roese says it can but it’s not his preferred approach, adding, “there are brilliant people that are isolated in a lab somewhere and coming up with brilliant ideas.”

But, Roese says it’s rarely the case where innovation without collaboration works well or happens quickly. Innovation in isolation usually creates something that no one understands, then spawns a second round of innovation where a larger group might take a technology or business idea and come up with innovative ways to apply it.

“Blockchain is a great example of that,” Roese says. “It was primarily initiated as a cryptocurrency foundation and most of the world outside of cryptocurrency looked at it with horror. It was non-green, very inefficient, unproven, complex and sometimes terrifying.”

However, as the potential of blockchain was explored for use in distributed ledgers, a new application emerged.

“We’re still not at the phase where we clearly see how exactly (blockchain technology) can be applied in enterprise use cases,” Roese says. “But there’s innovation going on in places like the Hedera Ecosystem (an open-source public, distributed ledger for digital asset exchange), where businesses like Dell, Boeing and other big companies are sitting down together, saying, ‘We have this new tool and it seems to be really good at resolving and automating transaction networks. Could we apply it to entitlements, services or transactions between companies that aren’t necessarily (using) cryptocurrency?’ It turns out there are going to be some important things there that it works for.”

Blockchain is an example of how initial innovation was done in a vacuum and from a one-dimensional point of view, yet the foundational technology went through several more rounds of innovation and is now being applied in an entirely different ecosystem.

“It’s a great example of collaboration because the way we figured out how to make a distributed ledger work across businesses was by having many businesses working together to figure that out,” Roese says. “I don’t know how you would have figured it out as an individual locked in a lab with no collaboration. But innovation is not binary. There are ideas that come from introverts in a vacuum, but it’s not common.”

According to Roese, a company needs to establish two principal beliefs to be successfully innovative. He cited Dell’s corporate strategy to “grow and modernize our core” and “expand our business.”  

From Dell’s standpoint that means looking at product development and existing products through a cultural lens of modernization to make products and solutions better and a belief that “nothing is where it needs to be and we can improve it.”  

Senior executive leadership of a company must accept that innovation matters and is important. That thinking needs to be put into something tangible so that everyone in the company recognizes it is important. Structure is also required that lays out whose job it is to assume different parts of innovation. Roese says Dell uses a three-stage model called Horizon for its engineering efforts. Horizon 1 focuses on building current products that people buy today. Horizon 2 looks at advanced development by taking existing products and making them better with new features, doing things differently or modernizing them. Horizon 3 considers where to go next – examining new areas and disruptive innovation.

“We have organizations that wake up every morning thinking about those three vectors of innovation…and having that structure matters,” Roese says. “My preference is that the structure shouldn’t be overly centralized. The first two (Horizon 1 and 2) live in business units. They are not part of the Office of the CTO or in a research lab.

“The third (should) live either in the CTO office, in an incubation structure or somewhere else that has a lot more freedom of movement,” he continues. “It’s not about iterating on what you have, it’s doing something entirely new.”

Whatever model a company chooses as its structure for innovation, everything starts with executive commitment and clear goals. “Basically, getting those two things right in a company creates a strong innovation culture,” he says.

Believing your business is complete today and that you’ve figured everything out or denying the existence of potential market disruptions to your business is a sure sign that your business culture is not innovative. And, if no structure exists for your innovation processes or if your company believes innovation is limited to the creation of ideas and not the execution of them, then it’s also likely that you’ll fail to be innovative.

“We have seen this happen where some well-intended CEO said, ‘we need an innovation culture so we’re going to have an innovation hackathon or innovation submission contest,’” Roese says. “Then they go and get a thousand wonderful ideas – all of which could be innovation if these were executed. But they don’t spend an equal amount of time putting in a structure to actually execute any of it.

“Unfortunately, companies fall into that trap all the time – believing innovation is simply the creation of ideas,” Roese adds. “But innovation is when those ideas are applied and bend the curve of your business by being executed. If you forget about that second half, you are doomed to fail.”

Roese describes what he calls “antibodies” that exist in organizations that attack innovation. Everyone initially likes the idea of innovation until it affects them personally and changes how a company might allocate resources, spend money and dictate how or what work is done.

“We create institutional negative inertia in our structures and if you’re not able to force your way through that or protect innovation…then negative inertia kills it,” Roese says.

At Dell, Roese has responsibility for an innovation group called “incubation” that reports to him and sits outside of any business units. It allows him as CTO to protect innovation projects and ideas from business units that see them as threats or forces for undesired change.

“We’ve realized that, if you’re going to do something disruptive, trying to do it from within the organization that’s being disrupted is not a good idea,” he says. “It usually results in a watered-down or bad outcome.”

Innovation also needs the licence to take resources “away from the legacy and apply it to the new.”
But that can be a problem.

“The dilemma is, you’re taking fuel away from people who will not participate in the incubation or innovation – that’s a different job,” Roese explains. “It’s an awkward kind of adult conversation you need to have. But if you don’t, great ideas and the culture that wants to innovate will die within the bowels of the corporation if there aren’t protective measures to make sure that (innovation and innovative ideas) can survive.”

As the business world has moved to hybrid and remote working, it’s fair to ask whether innovation might be impacted by that business model. Is innovation sacrificed, damaged or inhibited in any way as a result? Roese says he believes remote working in its current form does affect the magnitude of innovation.

“When people moved to working remote during the pandemic, we were pleasantly surprised that the world continued – that we could work remotely and most things continued to happen,” he says. “In fact, things improved in many cases. We became more productive and generally able to do almost anything. But, at that point, we started asking the question of, ‘What haven’t we solved?’”

According to Roese, there are at least two important innovation abilities. The first is spontaneous innovation that happens when two or more people with different ideas happen to cross paths in an office setting, then end up working together to develop a great idea. Roese describes it as “innovation in the open” and it happens when people are in the physical presence of each other.

“It turns out virtual environments are scripted,” he says. “They have agendas and are not ad hoc. We’ve tried (at Dell) to create ad hoc things. At our (virtual) tech conference, for example, we did intentional connections where we randomly threw people together into virtual conference rooms and had them talk to each other on a Zoom call. It doesn’t work as well.

“The ability for us to come up with the next great idea can happen virtually and it clearly has over the last several years,” Roese adds. “But it happens better if occasionally those interactions are face-to-face and a little bit more long lasting, spontaneous and where people are emotionally connected.”

Learning by osmosis is another missing element of what drives innovation when people work remotely. Valuable learning happens while working with someone with experience who has greater skills and ability in the job. Roese believes the best way to transfer knowledge is in-person and over time.

“Just being around them, you could observe and see them do their job and understand their best practices,” he says. “There is this osmosis of knowledge flowing to you by sitting next to a smarter engineer, better programmer or better speaker. The reality is that it just simply does not happen in the purely virtual remote world.”

For entry-level people who aren’t given these opportunities, the skills transfer necessary for generating innovation is harder, Roese says.

“We think remote is a great tool, but we also think there are certain dimensions where it pays a huge dividend to have people together,” he adds. “Dell’s official policy is, we are hybrid…we encourage people to work remote and many jobs are fully remote. We also encourage people to come into the office, but we’d like them to do it for a purpose. The purpose we are advocating is…this is a chance for you as a leader or senior person to transfer knowledge to our more junior people in an informal setting. It is a chance for you to have spontaneous connectivity – to learn new things.  

“We’ll figure out the right balance, but I’m not sure you can innovate as effectively in a purely virtual environment today. Maybe it will get better, but it’s not there yet.”

Roese believes the most exciting technology advancement for remote innovation and collaboration over distance is AI. He’s a strong advocate of applying it during innovation and brainstorming meetings and conversations.

“Maybe it’s just capturing everything we’re saying or maybe it’s enriching it – dynamically presenting content about what we are talking about,” Roese says.

He adds that the idea of creating a more immersive experience through sharing or presenting information to provide a more complete picture of a new topic that’s being discussed is better done in a virtual environment than in a conference room. In a Zoom meeting, or other virtual conferencing platform, a virtual AI-powered assistant does things dynamically – presenting or offering up new information or resources as it is capturing a conversation.

Collaboration technology continues to rapidly improve and will likewise enrich virtual innovation. Roese says moving from mono-dimensional audioconferencing to at least being able to see each other during a virtual meeting and creating emotional connections was critical. As we go forward, we’re going to create more immersive experiences in virtual environments, he says.

“We have a lot of tools at our disposal, some of which are digital and some of which are organizational, and we need to take advantage of all of them,” he says.

Roese adds that Dell is conducting AI co-pilot projects across its business because “It makes no sense for anyone to do their job without an AI assistant of some flavour.”

Roese continues to embrace technology and believes others should, too. While the pace of technology is accelerating and “even if it’s slightly terrifying, we need to stop obsessing about how we stop it and how we get disrupted by it and realize those things are inevitable,” Roese says. “Lean into it and figure out how to take advantage of it.

“Shifting work from people to machines has never resulted in a net decline of civilization. It has always catalyzed us to a next generation,” he adds. “It might seem scary, difficult and complex. But if you lean into it, you’re usually on the right side of history and that starts with…being well versed in innovation.”