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Innovation:

Responding to market shifts"
Zach Nies – Chief Technologist!
www.rallydev.com @zachnies! ©2014!
Zach Nies
@zachnies
Chief Technologist
Rally Software
Faculty
University of Colorado at Boulder
www.rallydev.com @zachnies! ©2014!
The biggest risk you face

is changing"
www.rallydev.com @zachnies! ©2014!
Risk:

failing to respond
to market shifts"
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ANOTHER RISK…?
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An example …"
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Consumer data
company"
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1 80% market share
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2 “We need a native mobile app.”
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1 2 3 4 5 6 7 8
5 Startup competitor ships 1.1
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8 Native app ships
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1 80% market share
2 “We need a native mobile app.”
3 App specification begins
4 Startup competitor ships 1.0
5 Startup competitor ships 1.1
6 App development begins
7 Startup competitor ships 1.2
8 Native app ships
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12 months to write
specification"
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6 8
6 App development begins 8 Native app ships
9 months to build app"
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21 months to respond"
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3
3 App specification begins
8
8 Native app ships
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5 8
12 months to forever

lose half the market share"
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Gut wrenching"
www.rallydev.com @zachnies! ©2014!
What’s

going on here?"
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Desirable"
Feasible"
Viable"
Viral"
Sustainable" https://www.flickr.com/photos/solarbotics/8202925319/
www.rallydev.com @zachnies! ©2014!
Desirable"
Feasible"
Viable"
Viral"
Sustainable"
Will rapidly change markets"
www.rallydev.com @zachnies! ©2014!
Connected tribes"
https://www.flickr.com/photos/shankbone/6183443813
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Time needed to reach
Feasible, Desirable,
Viable & Viral

and reshape the market"
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Some examples …"
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1984!
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2006!
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About 20 years!
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2001!
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2006!
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5 years!
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2007!
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2010!
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3 years!
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2010!
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2012!
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2 years!
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1979!
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1989!
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10 years!
www.rallydev.com @zachnies! ©2014!
5 years!
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2.5 years!
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1.5 years!
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Time needed to

form a tribe

and spread the word"
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An example …"
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http://upload.wikimedia.org/wikipedia/commons/9/90/Ford_Pinto_runabout_(1).jpg
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8 years!
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1.5 years!
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Market expectations
can change and
spread quickly"
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Impact

on companies"
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500
www.rallydev.com @zachnies! ©2014!
Question:"
!
How long does the average company
on this list survive?!
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www.rallydev.com @zachnies! ©2014!
1958: "
Average lifespan was 61 years!
!
2012: "
Average lifespan was 18 years!
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www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
Market shifts

create uncertainty "
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Is your business
getting

more certain?"
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Uncertainty"
www.rallydev.com @zachnies! ©2014!
Uncertainty"
www.rallydev.com @zachnies! ©2014!
High" Low"
Uncertainty"
www.rallydev.com @zachnies! ©2014!
Chaotic" Obvious"
High" Low"
Uncertainty"
www.rallydev.com @zachnies! ©2014!
Chaotic" Obvious"Complicated"Complex"
High" Low"
Uncertainty"
www.rallydev.com @zachnies! ©2014!
Chaotic" Complicated"Complex"
Uncertainty"
High" Low"
Obvious"
www.rallydev.com @zachnies! ©2014!
Actions" Rules"Analysis"Experiments"
Chaotic" Complex" Complicated" Obvious"
Uncertainty"
www.rallydev.com @zachnies! ©2014!
Chaotic" Complex" Complicated"
Bureaucrat"Engineer"Firefighter" Entrepreneur"
Obvious"
Actions" Rules"Analysis"Experiments"
Uncertainty"
www.rallydev.com @zachnies! ©2014!
Chaotic" Complex" Complicated"
Examples"
Obvious"
www.rallydev.com @zachnies! ©2014!
Chaotic" Complex" Complicated" Obvious"
Order

officesupplies"
Examples"
www.rallydev.com @zachnies! ©2014!
Chaotic" Complex" Complicated" Obvious"
Update

termsofservice"
Order

officesupplies"
Examples"
www.rallydev.com @zachnies! ©2014!
Chaotic" Complex" Complicated" Obvious"Setsales

compplan"
Update

termsofservice"
Order

officesupplies"
Examples"
www.rallydev.com @zachnies! ©2014!
Chaotic" Complex" Complicated" Obvious"
Create

marketbuzz"
Setsales

compplan"
Update

termsofservice"
Order

officesupplies"
Examples"
www.rallydev.com @zachnies! ©2014!
Chaotic" Complex" Complicated" Obvious"
Increase
retentionrate"
Create

marketbuzz"
Setsales

compplan"
Update

termsofservice"
Order

officesupplies"
Examples"
www.rallydev.com @zachnies! ©2014!
Recover

floodedservers"
Chaotic" Complex" Complicated" Obvious"
Increase
retentionrate"
Create

marketbuzz"
Setsales

compplan"
Update

termsofservice"
Order

officesupplies"
Examples"
www.rallydev.com @zachnies! ©2014!
Chaotic" Complicated"Complex" Obvious"
Dynamics"
www.rallydev.com @zachnies! ©2014!
Chaotic" Complicated"Complex" Obvious"
Dynamics"
www.rallydev.com @zachnies! ©2014!
Chaotic" Complicated"Complex" Obvious"
Dynamics"
www.rallydev.com @zachnies! ©2014!
Chaotic" Complicated"Complex" Obvious"
Dynamics"
www.rallydev.com @zachnies! ©2014!
Chaotic" Complicated"Complex"
Disruption"
Obvious"
Dynamics"
www.rallydev.com @zachnies! ©2014!
Chaotic" Complicated"Complex"
Disruption"
Obvious"
Dynamics"
www.rallydev.com @zachnies! ©2014!
Common language

to discuss uncertainty"
www.rallydev.com @zachnies! ©2014!
Align actions

with uncertainty"
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Typical approach"
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http://www.flickr.com/photos/isaacmao/380257543
Create a plan to
predict the future"
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Budget approval"
"
Product definition"
Product requirements"
Detailed plan"
Alpha release"
Beta release"
Final release"
FIRST CONTACT WITH CU"
www.rallydev.com @zachnies! ©2014!
Budget approval"
Market research"
Product definition"
Product requirements"
Detailed plan"
Alpha release"
Beta release"
Final release"
FIRST CONTACT WITH CU"
www.rallydev.com @zachnies! ©2014!
Budget approval"
Market research"
Project definition"
Project requirements"
Detailed plan"
Alpha release"
Beta release"
Final release"
FIRST CONTACT WITH CU"
www.rallydev.com @zachnies! ©2014!
Budget approval"
Market research"
Project definition"
Project requirements"
Detailed plan"
Alpha release"
Beta release"
Final release"
FIRST CONTACT WITH CU"
www.rallydev.com @zachnies! ©2014!
Budget approval"
Market research"
Project definition"
Project requirements"
Detailed plan"
Alpha release"
Beta release"
Final release"
FIRST CONTACT WITH CU"
www.rallydev.com @zachnies! ©2014!
Budget approval"
Market research"
Project definition"
Project requirements"
Detailed plan"
Development"
"
Final release"
FIRST CONTACT WITH CU"
www.rallydev.com @zachnies! ©2014!
Budget approval"
Market research"
Project definition"
Project requirements"
Detailed plan"
Development"
Verification"
"
FIRST CONTACT WITH CU"
www.rallydev.com @zachnies! ©2014!
Budget approval"
Market research"
Project definition"
Project requirements"
Detailed plan"
Development"
Verification"
Final release"
FIRST CONTACT WITH CU"
www.rallydev.com @zachnies! ©2014!
HOW MANY
GUESSES?"
www.rallydev.com @zachnies! ©2014!
FIRST CONTACT
WITH USERS"
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www.rallydev.com @zachnies! ©2014!
http://www.flickr.com/photos/oregondot/4132135156
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Obscure

the uncertainty

with details of a
false precision"
www.rallydev.com @zachnies! ©2014!
Embrace, reveal,
and mitigate

uncertainty"
www.rallydev.com @zachnies! ©2014!
How did we

get here?"
www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
“the greatest prosperity
can exist only when that
individual has reached
his highest state of
efficiency; that is, when
he is turning out his
largest daily output.”"
www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
Maximize

individual efficiency"
www.rallydev.com @zachnies! ©2014!
Chaotic" Obvious"Complicated"Complex"
High" Low"
Uncertainty"
www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
“All we are doing is looking
at the time line from the
moment the customer gives
us an order to the point
when we collect the cash.
And we are reducing that
time line by removing the
non-value-added wastes.”"
www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
Maximize

the flow of value"
www.rallydev.com @zachnies! ©2014!
How do we
maximize

the flow of value

in knowledge work?"
www.rallydev.com @zachnies! ©2014!
Replace Waterfall execution

with Lean execution"
www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
Product
Backlog
Iteration
2 Weeks
Daily
Meeting
Iteration
Backlog
Product
Increment
ITERATIONMECHANICS
Scrum
Scrum
www.rallydev.com @zachnies! ©2014!
FLOWMECHANICS
(all independent cadences)
Ready
queue
prioritize retrospectgroom release release
WIP
Target
Kanban
Kanban
www.rallydev.com @zachnies! ©2014!
http://www.infoq.com/articles/hiranabe-lean-agile-kanban
www.rallydev.com @zachnies! ©2014!http://codebetter.com/blogs/david_laribee/archive/2008/08/24/introducing-kanban-at-xclaim.aspx
www.rallydev.com @zachnies! ©2014!
5 2 2 4
the Kanban board
Ready
Kanban
www.rallydev.com @zachnies! ©2014!
5 2 2 4
the Kanban board
Ready
Kanban
www.rallydev.com @zachnies! ©2014!
5 2 2 4
the Kanban board
Ready
Kanban
www.rallydev.com @zachnies! ©2014!
Maximize

the flow

of value work"
www.rallydev.com @zachnies! ©2014!
Chaotic" Obvious"Complicated"Complex"
High" Low"
Uncertainty"
www.rallydev.com @zachnies! ©2014!
What if

we don’t know
exactly what the
customer values?"
www.rallydev.com @zachnies! ©2014!
Typical approach"
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Magic box of innovation"
https://www.flickr.com/photos/wonderlane/7923402476
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https://www.flickr.com/photos/psmithy/3382830261
Everyone else"
www.rallydev.com @zachnies! ©2014!
Everyone

can innovate"
www.rallydev.com @zachnies! ©2014!
http://www.flickr.com/photos/memekiller/4564410767
www.rallydev.com @zachnies! ©2014!
Turn hunches"
into evidence"
www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
Business"
"
"
"
Initiative"
www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
AssumptionsCanvas Name: Date:
Key Assumption
Dependent Assumptions
Falsified Assumptions
Other AssumptionsOther Assumptions
Key Assumption
Dependent Assumptions
Key Assumption
Dependent Assumptions
I-1
Reminders will
help gift givers
We know when
giving events
will happen
Text messages
are acceptable
reminders
Suggestions
will motivate
givers
Recipients
want gifts on
time
We can give
reasonable
suggestions
We can get
receiver
preference
data
We can send
timely text
messages
Partners want
referral leads
We can make
money through
partner
referrals
We can get
enough parter
inventory
Our leads will
buy gifts
Facebook adds
will drive
traffic
A mobile first
product
strategy
www.rallydev.com @zachnies! ©2014!
Key assumptions"
Knowledge"
www.rallydev.com @zachnies! ©2014!
Frame"
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www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
www.rallydev.com @zachnies! ©2014!
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Build"
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25%
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Adoption something
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