Archive for the ‘Innovation’ Category
The Three Faces of Innovation
To succeed with innovation, you need to simultaneously address all three aspects:
- Affordable experimentation through the Agile process.
- Empowerment of (self sufficient) local teams.
- Let go of the hierarchical control concentrated in corporate headquarters.
Connecting the Dots: Operational Excellence, Strategic Freedom and the Pursuit of Passion
My recent post The Headlong Pursuit of Growth, and Its Aftermath applied insights from Toyota Motor Corporation to Agile methods. Among various lessons to be learned, the post highlighted the relationship between mechanism and policy:
Just like the Toyota Production System, your software method is a “vehicle” which is subject to policy decisions from above. It cannot, however, compensate for policy failures.
In other words, operational excellence in Agile methods is not a substitute for strategy/policy. It does not confer strategic freedom.
In another recent post – I Found My Voice; I did not Find My Tribe – the vicious cycle that leads to loss of passionate Agile talent was described as follows:
This “1.5” phenomenon is at the root of a vicious cycle that dilutes companies, particularly these days:
- A round of layoffs is implemented.
- Just about everyone takes notice and tries to exhibit the “proper behavior/values.”
- Folks in the “private tribe” don’t dare come out of the closet.
- The passionate person who found his/her voice in Agile is like a fish out of the water. Sooner or later he/she looks for a tribe elsewhere.
- The company becomes more diluted on folks who are willing to try new things and have the drive to make them happen.
- The products and the supporting processes continue to be mediocre.
- Goto step 1.
Reading the article Getting Toyota Out of Reverse, published in the December 18 issue of BusinessWeek, I found a fascinating linkage between the two posts:
“They say that young people are moving away from cars,” Toyoda said. “But surely it is us—the automakers—who have abandoned our passion for cars.”
One had better take notice when the president of Toyota speaks of the effects of loss of passion using phrases like “irrelevance or death” and “grasping for salvation”.
You need go no further than John Hagel‘s recent post Pursuing Passion for a resounding second opinion on the subject.
I Found My Voice; I did not Find My Tribe
Various Agile champions within the corporation often find themselves stuck at “level 1.5”, in between the following two levels:
- “I found my voice/passion.”
- “I found my tribe.”
The Agile champion typically gets stuck at this level in the following manner:
- He/she finds his or her voice/passion in Agile.
- Various other folks in the corporation agree with him/her and constitute kind of “private tribe.”
- However, the folks that agree are hesitant to come out of the closet and throw their full weight behind Agile.
- The corporation remains ambivalent about Agile.
This “1.5” phenomenon is at the root of a vicious cycle that dilutes companies, particularly these days:
- A round of layoffs is implemented.
- Just about everyone takes notice and tries to exhibit the “proper behavior/values.”
- Folks in the “private tribe” don’t dare come out of the closet.
- The passionate person who found his/her voice in Agile is like a fish out of the water. Sooner or later he/she looks for a tribe elsewhere.
- The company becomes more diluted on folks who are willing to try new things and have the drive to make them happen.
- The products and the supporting processes continue to be mediocre.
- Goto step 1.
IMHO The failure of many corporations to preserve Agile talent, and the resultant vicious cycle described above, is rooted in lack of appreciation how deep the connection between boredom and loneliness is. A young child does not know (nor does he/she have the vocabulary to express) what boredom is. The feeling the child expresses is that of loneliness. Only at a later stage does boredom get cognitively differentiated from loneliness. However, the two continue to be tied together emotionally.
Once the child grows up to become an Agile champion who found his/her voice, the boredom in the office is usually relieved. However, the twin sister of boredom – loneliness – cannot be satisfied through a “private tribe.” It requires full recognition and commitment within the corporation. In other words, it sort of demands that the corporation goes beyond recognizing the value (singular) of Agile and adopts the values (plural) expressed in the Agile Manifesto. If such adoption does not take place, an essential step to the formation of the tribe is curtailed . Without a full fledge tribe in his/her corporation, the induced feeling of loneliness sooner or later wears out the Agile champion.
This phenomenon, of course, applies to any professional passion an employee might pursue. John Hagel‘s Edge Perspectives post Pursuing Passion is a must-read for anyone who wonders how the corporation is impacted by losing the folks who got stuck at “level 1.5.”
The Changing Nature of Innovation: Part II — National Policy
Michael Porter makes two interesting observations about innovation in the US in his BusinessWeek interview entitled Why America Needs an Economic Strategy:
… U.S. entrepreneurship has been fed by a science, technology, and innovation machine that remains by far the best in the world. While other countries increase their spending on research and development, the U.S. remains uniquely good at coaxing innovation out of its research and translating those innovations into commercial products. In 2007, American inventors registered about 80,000 patents in the U.S. patent system, where virtually all important technologies developed in any nation are patented. That’s more than the rest of the world combined
In contrast to the effectiveness of utilizing research and technology for entrepreneurial purposes, Porter notes a worrisome trend:
An inadequate rate of reinvestment in science and technology is hampering America’s feeder system for entrepreneurship. Research and development as a share of GDP has actually declined, while it has risen in many other countries. Federal policymakers recognize this problem but have failed to act.
Viewed in light of Part I of this mini-series on innovation, a natural question posts itself:
Do the new forms of experimentation, which enable the US entrepreneurial system to be so very effective in coaxing innovation out of research that has already been done, mask a fundamental decline for which there will be hell to pay?!
The Changing Nature of Innovation: Part I — New Forms of Experimentation
Colleague Christian Sarkar drew my attention to two recent Harvard Business Review (HBR) articles that shed light on the way(s) innovation is being approached nowadays. To the best of my knowledge, none of the two articles has been written by an author who is associated with the Agile movement. Both, if you ask me, would have resonated big time with the authors of the Agile Manifesto.
The February 2009 HBR article How to Design Smart Business Experiments focuses on data-driven decisions as distinct from decisions taken based on “intuition”:
Every day, managers in your organization take steps to implement new ideas without having any real evidence to back them up. They fiddle with offerings, try out distribution approaches, and alter how work gets done, usually acting on little more than gut feel or seeming common sense—”I’ll bet this” or “I think that.” Even more disturbing, some wrap their decisions in the language of science, creating an illusion of evidence. Their so-called experiments aren’t worthy of the name, because they lack investigative rigor. It’s likely that the resulting guesses will be wrong and, worst of all, that very little will have been learned in the process.
It doesn’t have to be this way. Thanks to new, broadly available software and given some straightforward investments to build capabilities, managers can now base consequential decisions on scientifically valid experiments. Of course, the scientific method is not new, nor is its application in business. The R&D centers of firms ranging from biscuit bakers to drug makers have always relied on it, as have direct-mail marketers tracking response rates to different permutations of their pitches. To apply it outside such settings, however, has until recently been a major undertaking. Any foray into the randomized testing of management ideas—that is, the random assignment of subjects to test and control groups—meant employing or engaging a PhD in statistics or perhaps a “design of experiments” expert (sometimes seen in advanced TQM programs). Now, a quantitatively trained MBA can oversee the process, assisted by software that will help determine what kind of samples are necessary, which sites to use for testing and controls, and whether any changes resulting from experiments are statistically significant.
On the heels of this essay on how one could attain and utilize experimentally validated data, the October 2009 HBR article How GE is Disrupting Itself discusses what is already happening in the form of Reverse Innovation:
- The model that GE and other industrial manufacturers have followed for decades – developing high-end products at home and adapting them for other markets around the world – won’t suffice as growth slows in rich nations.
- To tap opportunities in emerging markets and pioneer value segments in wealthy countries, companies must learn reverse innovation: developing products in countries like China and India and then distributing them globally.
- While multinationals need both approaches, there are deep conflicts between the two. But those conflicts can be overcome.
- If GE doesn’t master reverse innovation, the emerging giants could destroy the company.
It does not really matter whether you are a “shoe string and prayer” start-up spending $500 on A/B testing through Web 2.0 technology or a Fortune 500 company investing $1B in the development and introduction of a new car in rural India in order to “pioneer value segments in wealthy countries.” Either way, your experimentation is affordable in the context of the end-result you have in mind.
Fast forward to Agile methods. The chunking of work to two-week segments makes experimentation affordable – you cancel an unsuccessful iteration as needed and move on to work on the next one. Furthermore, you can make the go/no-go decision with respect to an iteration based on statistically significant “real time” user response. This closed-loop operational nimbleness and affordability , in conjunction with a mindset that considers a “failure” of an iteration as a valuable lesson to learn from, facilitates experimentation. Innovation simply follows.
The Agile Executive 