The Value of Innovation

I've been reading up on the value of innovation, in preparation for the Value seminar by Tom Gilb in London this week. One question for Agile teams is how to innovate within the constant pressure of "Sprinting" and barely having time to draw breath.

Agile teams can be innovative of course, although from experience I suspect this is more from a sharing and aligning of the business and users needs than from some magical technique, and of course this can is not just from Agile, Agile merely improves collaboration and communication.

The strong Agile teams I have worked with are very much in touch with the business. The product leader proxy who works collaborative with the team to share understanding, who brings customers either onsite to validate the user experience or has novel approaches to doing in context testing can help channel the innovation and creativity within the team. The act of iterating and experimenting can also create interesting approaches as failure can be quick and success understood just as fast.

When at Yahoo! in the innovation group, there was constant discussion and debates to even articulate what innovation was. Is it the disruptive or small innovations we sought? The disruptive innovations of course made the press yet many small improvements appeared to be the ones that paid off. We were not only competing with our arch-nemesis of free lunch fame the next city over, but with the "two guys in a garage" syndrome. So it's not two people you are competing with, it's tens or hundreds of thousands spread across the globe so p

utting even a hundred people into an innovation think tank wasn't going to compete with that

.

Sun microsystems had a strategy when faced with the same dilemma to allow people who had great ideas internally to leave the company until they got them to a feasible stage and then acquire them. They understood that they were the greatest impediment to innovation and only by releasing people from their internal processes could the ideas flourish to the point they could be self-sustaining.

We saw this countless times at Yahoo!, by the time the bureacratic wheels had processed the idea, it was already out in the world via a competitor, or funding was not forthcoming as it was seen as risky so instead money would be reallocated to a safe bet so the idea never saw the light of day. One of my colleagues said his most creative time in joining the company was in the first three months, before he realised what he wasn't allowed to do. His blind ignorance meant he cut side-tracked the red tape that hindered his co-workers and could get something done and to market.

Is it better then to ask for forgiveness instead of permission? One of the most innovative people I met had an infamous quote "if you aren't constantly in danger of getting fired then you just aren't trying hard enough". The trouble is the context of corporate politics discourages risk taking and the idea of ever failing.

At Toyota the leadership team is taught to ask for "Bad news first". Rather than the Western idea of showcasing how good things are, if you can't see the bad things you can't improve.

Perhaps we should step back from the quagmire of companies having a process or system that even allowed innovation to occur and ask ourselves if innovation is even a worthy goal or simply a red herring. What is the value of innovation? How well does it really serve a company to succeed? According to studies, over 70% of R&D funding is wasted. The money if funnelled into chasing patents which can often be of questionable value (particularly if companies use patents as an industry measure of innovation be they worthwhile or not), instead of delivering solutions that add value to the business, users and society in general. Patents going up while profits slide down appears to be a visible symptom of many Silicon valley start-ups.

Instead of innovation being a goal unto itself I would suggest that setting up a culture and system that allows people to understand what value is for the customers and end-users will naturally allow innovation to flourish. In the book "Good to Great" the premise is that the most successful companies needed a greater purpose, simply saying you wanted a company to make money didn't inspire or motivate anyone, in fact the research being done on monetary reward systems should give the clue that this is never a good enough reason or at least a long term sustainable reason to run a great company. We know that many innovations are happy accidents (the teflon story), a means to an end (3M postit notes) or to meet some wonderful vision (men on the moon).

Instead of focusing on innovation companies should focus on their passion, and igniting that passion in their teams. When I met with Katiyama-San, the Toyota chief engineer who designed the Lexus and is working on the high-speed bullet train for Hitachi currently, he said the reason they built the Lexus is that an internal team wanted to work on it as they were excited by the idea of building a high quality vehicle even though it wasn't their core market. His reason for even being in the business in the first place was that he loved speed. His passion was racing cars so he wanted to work on high-end fast cars. He said the man who was the chief engineer who worked on the Sienna people-mover (minivan) worked on it not because he loved building minivans, but because he loved his family. The passion drove the innovations, if you don't care you won't do a good job.

Victor Frankl, a Jewish-German psychologies and author of "Man's search for meaning" did a lot of research both in the prison camp he was interned in and managed to survive, then after the war in American working with teenage suicide patients. The reason people survived longer in the camps was if they had some meaning, some reason to live. People who didn't or lost hope died quickly under the harsh conditions. Many American teenagers who had never had to work for anything and had no purpose similarly would die quickly at their own hands, even in the most luxurious of conditions.

Bringing this back to product development, if the team doesn't understand the reason or purpose of what they are doing, and the product leader is unable to articulate or inspire them, the product will die. It either will lack the ability to delight the customers or it will suffer from a lack of nurturing once it's launched and never grow beyond it's early success. The longer a product takes to be built and delivered, the more diluted it's essence and message is. The monolithic traditional projects over multiple years not only risk missing the market and costing a lot of money that might completely miss it's targets, but it also wears down the teams working on them and the vision fades and what emerges is a pale shadow of the original idea.

So what should you do to keep teams focused and perhaps as a bi-product, innovate?

1. Choose an inspirational product leader to build the team. They won't have all the ideas themselves but they can inspire the whole team to understand the business drivers, the customers and users, and the purpose.

2. Let the team not only understand but actively participate in quantifying the measures of success, walking around in the users shoes to build empathy, and being involved in the user feedback loops to see how people respond to their creations. If it can't be measured it won't be valued.

3. Allow the team to take the steering wheel sometimes. Rather than have people feeling like their ideas aren't heard or not agreeing with the product priorities, let the team have a Sprint where they prioritise what they work on, they can suggest new ideas, lobby their team mates to join their venture, fix defects, build better automation etc. I call this a "Hack Sprint".

4. Get the company motivated in 24 hour hackathons where teams can form and work on their ideas and passions then showcase them to the whole company.

5. Get products out to market quickly and validate with real users in the real context. Get feedback early and often from the start of the new idea (rapid prototyping) through to beta launch (AB bucket testing) can save a lot of money and time.

6. Don't decide all the features at the beginning, allow time to get some feedback on which features provide the hook and delight users over pre-supposed ideas of what will succeed. Even market research can be flawed and give false positives so that can't be fully relied on. Apple apparently does little market research.