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Agile Innovation

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My talk on "Agile Innovation" at Schneider.

Published in: Business
  • Interesting presentation, IMHO it's good to discuss different points of view concerning Agile innovation (I mean pros and cons like on http://kanbantool.com/blog/agile-and-innovation here) and deliver some process knowledge like Stacey Matrix or the marginal gains issue you mention. So it's nice you put it here :)
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Agile Innovation

  1. 1. Agile Innovation Tathagat Varma Knowledgepreneur http://thoughtleadership.in
  2. 2. Accenture Study, 2013 • 93% execs believed their long-term success depends on ability to innovate, and 70% place innovation in Top 5 priorities. • However, only 18% execs believe their company’s innovation efforts deliver a competitive advantage, a decline from 2009 study. • Too much “invention” (not enough commercialisation) and too much “renovation” (in place of breakthrough ideas) https://newsroom.accenture.com/subjects/supply-chain-management/accenture-study-innovation-efforts-falling-short-despite-increased-investment.htm
  3. 3. Innovation Crisis? • Only 5% workers in innovation programs feel highly motivated to innovate. • More than 3/4th say their new ideas are poorly reviewed and analyzed. • Less than 1/3rd measure or report on innovation. • 81% firms don’t have resources needed to fully pursue their innovations. • While 55% treat IP as a valuable resource, only 16% regarded its development as mission- critical, and only 6% employees feel so! • 49% won’t get any benefit or recognition for developing successful ideas. http://www.forbes.com/sites/stevedenning/2015/02/27/is-there-an-innovation-crisis-at-us-firms/#358318fc34cb
  4. 4. Why??? World’s dumbest idea….yes… maximising the shareholder value!!! Hint: “the best way to increase shareholder value is by delivering value to customers!” http://www.forbes.com/sites/stevedenning/2015/02/27/is-there-an-innovation-crisis-at-us-firms/#358318fc34cb
  5. 5. Do you have other stories?
  6. 6. Three Stories •F-86 vs MiG15 •Polycom •CapitalOne •…and many mini-stories!
  7. 7. F-86 vs MiG15 • Colonel John Boyd was interested not just in any dogfights, but specifically in dogfights between MiG-15s and F-86s. As an ex-pilot and accomplished aircraft designer, Boyd knew both planes very well. He knew the MiG-15 was a better aircraft than the F-86. The MiG-15 could climb faster than the F-86. The MiG-15 could turn faster than the F-86. The MiG-15 had better distance visibility. • The F-86 had two points in its favor. First, it had better side visibility. While the MiG-15 pilot could see further in front, the F-86 pilot could see slightly more on the sides. Second, the F-86 had a hydraulic flight control. The MiG-15 had a manual flight control. • The standing assumption on the part of airline designers was that maneuverability was the key component of winning dogfights. Clearly, the MiG-15, with its faster turning and climbing ability, could outmaneuver the F-86. • There was just one problem with all this. Even though the MiG-15 was considered a superior aircraft by aircraft designers, the F-86 was favored by pilots. The reason it was favored was simple: in one- on-one dogfights with MiG-15s, the F-86 won nine times out of ten. https://msdn.microsoft.com/en-us/library/aa479371.aspx
  8. 8. Boyd’s Law of Iteration Speed of iteration beats quality of iteration!
  9. 9. Polycom Jeff Rodman co-founded Polycom in 1990. “There’s a big advantage in starting small. Polycom’s biggest early breakthrough, for instance, came about as the result of a 95-cent book I purchased from RadioShack in 1991. That pamphlet taught my cofounder and me about a nerdy topic known as “acoustic suspension,” a concept that showed us the fallacy in assuming that big sound demands a big loudspeaker. Using this simple principle, we were able to go small by bringing two separate acoustic environments into a compact space. That tiny shift in our thinking is what set us on the path to selling millions of phones and changing what conference rooms look like today — a path that continues to be built from small innovations, small designs, and small habits. Over my 25 years at Polycom we’ve had our fair share of big things, but they didn’t happen by making those big things the centerpiece. Big things happen because of small things, which means that if all you do is “go big,” you’ll never actually get to your goal. To help escape the myth of going big, I want to share three small things that I’ve learned make a big difference.” https://hbr.org/2016/09/how-i-built-a-2-billion-company-by-thinking-small
  10. 10. Polycom “It’s always tempting to try to capture some grand solution in one leap. While that can happen, far more often the best decisions and the best solutions are constructed within an environment of small habits, innovations, and designs. Going small doesn’t mean you can’t go big. It means that when you finally do get big, there is an excellent chance for it to become a brilliantly remarkable big.” • Small Innovations • Small Designs • Small Habits https://hbr.org/2016/09/how-i-built-a-2-billion-company-by-thinking-small
  11. 11. CapitalOne • Started in 1994. $25Billion revenues today! • Fairbank attributes CapitalOne’s success to its “ability to turn a business into a scientific laboratory where every decision…could be subjected to systematic testing using thousands of experiments” • 2000: Conducting over 60,000 tests a year! • 2013: Conducts over 80,000 big data experiments a year, a number expected to go higher! • Started CapitalOne Labs in 2011 to develop products in collaboration with VCs, entrepreneurs and academics. • Holds regular meetings and competitions to encourage creation of products in less than 24 hours. https://www.capgemini.com/resource-file-access/resource/pdf/capital-one-doing-business-the-digital-way_0.pdf
  12. 12. More…? • 1943: Lockheed’s Skunkworks delivers XP-80 in just 143 days. 7 days ahead of schedule • 1943-45: Ford’s Willow Run plant makes B-24 bombers every 55 minutes! • 1951-91: Toyota: 40 Years, 20 Million Ideas! • 1979-84: Dyson’s 5,127 Iterations over 5+ years • 1983-89: Lexus LS400: 450 iterations and 900 engine prototypes over 5+ years • 2008: Wikispeed deliver a 100mpg car prototype in 3 months, and iterates every week! • 2009: Google claimed to have run over 12,000 randomised experiments, with about 10% of them leading to business changes. • 2011: Intuit’s SnapTax team iterated eight time in eight weeks • 2014: Amazon’s Apollo did 50M code deployments in past 12 months. That’s more than one code deployment per second!
  13. 13. What’s common? • Increasing working in a “VUCA” world • Centralised strategy, Decentralised execution • Culture of experimentation • Fail fast, fail cheap, fall forward • Big goal…but willing to start small • Small, collaborative, cross-functional teams • Hundreds of low-risk experiments (“safe to fail” as opposed to “failsafe”) • Rapid iterations to accelerate faster learning • Testing often in the field • Progress over perfection • …
  14. 14. Lorenz’s Butterfly 1972: Does the Flap of a Butterfly’s Wings in Brazil Set Off a Tornado in Texas? Small changes can lead to big results!
  15. 15. Aggregation of Marginal Gains http://jamesclear.com/marginal-gains
  16. 16. The simple math behind it that “compounds” it… (0.99)^365 = 0.03 (1.01)^365= 37.8
  17. 17. So, what part of common sense we don’t get ?!?
  18. 18. Stacey Matrix
  19. 19. Double-loop Learning
  20. 20. Learning Loops… perhaps as old as nature! Francis Bacon, 16th Century Walter Shewhart 20th Century Eric Ries 21th Century …and many many more since the mankind!!! Charles Darwin, 19th Century
  21. 21. Agile Manifesto, 2001 agilemanifesto.org
  22. 22. Using Scrum as a problem- solving framework
  23. 23. From Creativity to Innovation https://cucumber.pro/images/blog/divergent-convergent-thinking.png
  24. 24. A Design Thinking Process
  25. 25. Agile Innovation • E&Y: The art of making hard things easy and creating new viable business offerings faster • Encourage experimentation, collaboration and maximise learning • Strive for agile and innovative processes • Don’t sweat uncertainty • Increase efficiency but don’t just focus on best practices and standard operating procedures • Bain: Integrates design with development, adapting and releasing the most valuable features far faster
  26. 26. Traditional vs. Agile Innovation Delivering agile innovation, Jun 2014, E&Y
  27. 27. Executing Agile Innovation Delivering agile innovation, Jun 2014, E&Y
  28. 28. Recap • Change, and more particularly innovation, has been the key to human survival and progress. • In today’s “VUVA” world, traditional long- haul methods of innovation don’t work anymore! • Integration of “agile” ideas to innovation leads to better results, across the industry verticals • However, agile innovation is more about mindset and culture than methods, processes and tools!
  29. 29. References • Agile Innovation, Langdon Morris et al • The Power of Agile Innovation, https://www.wazoku.com/blog/agile-innovation/ • Delivering Agile Innovation, https://webforms.ey.com/Publication/vwLUAssets/EY- delivering-agile-innovation-presentation/$FILE/EY-innovation-through-collaboration- presentation.pdf • Agile Innovation, http://www.bain.com/publications/articles/agile-innovation.aspx • The Secret History of Agile Innovation, https://hbr.org/2016/04/the-secret-history-of- agile-innovation • Agile: The World’s Most Popular Innovation Engine, http://www.forbes.com/sites/ stevedenning/2015/07/23/the-worlds-most-popular-innovation-engine/#36d333fa2d4c • The New New Product Development Game, https://hbr.org/1986/01/the-new-new- product-development-game • Agile Innovation for Startups, https://medium.com/the-perch/jim-hornthal-agile- innovation-for-startups-bcae73e2cd30#.9umpzso77 • Innovation at 50x, http://www.slideshare.net/sblank/innovation- at-50x-081515-51681670 • How I Built a $2Billion Company by Thinking Small, https://hbr.org/2016/09/how-i- built-a-2-billion-company-by-thinking-small • Uncontrolled, Jim Manzi • http://www.extremefactories.eu/agile-innovation-process-manifesto/

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