A Fractal Approach to Innovation and Product Management
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Touches on many inter-related topics that span product management and driving innovation, barriers encountered, and fractal explanations.
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A Fractal Approach to Innovation and Product Management
- 1. A Fractal Approach To Project Management & Innovation Steve Gladstone Simplexity Solutions spglad@gmail.com August 28, 2015 #Simplexity #FractalInnovation
- 2. Agenda • Today, let’s discuss seemingly disparate concepts, drawing them together to better understand and navigate the puzzle of innovation: – Surprising links between motivation and innovation – Understand the “Innovator’s Dilemma” – Project, product, and solution companies – The “fractal” mindset and behaviors – The consigliere innovator model – Culture and situational awareness fractals – Bringing it all together through “joined‐up” thinking – Fun links included in Appendix, for you dive deeper! – Please feel free to interact as we go…So, let’s explore!
- 3. So, You Want to Have an Impact? So, You Want To Have An Impact… • Explore deeply and personally what “impact” means to you! • Dan Pink: Surprises in motivation… – Money? Yes…and no – For creative tasks, higher rewards lead to lower performance… – It’s really about: Autonomy! Mastery! Purpose! So, You Want To Have An Impact… • Explore deeply and personally what “impact” means to you! • Dan Pink: Surprises in motivation… – Money? Yes…and no – For creative tasks, higher rewards lead to lower performance… – It’s really about: Autonomy! Mastery! Purpose!
- 12. The Innovator’s Dilemma Visualized $ (Cost, Price, etc.) Features, Value, etc. Incumbent New Entrant 10% Growth = $1M 10% Growth = $100M • “Listens” to the customer • Incremental innovation • Organization tuned for sustaining high price point • Inferior product…at first • Mostly ignored by market and incumbent • Pursue low‐end features • But, add more over time… CEO: Which way to go?
- 13. • Perceived by some as “good enough” • Converts some mid‐market customers from incumbent • Others notice and may follow • Eventually, begins to threaten incumbency The Innovator’s Dilemma Visualized $ (Cost, Price, etc.) Features, Value, etc. Incumbent New Entrant • Inertia, slow to change • Fear cannibalization • Lower customer satisfaction • Loss of market share • Struggle to recover
- 14. The Innovator’s Dilemma Case Study: 5.25/3.5 Inch Disks • The 3.5” drive was first developed in 1984 by Rodime, a Scottish entrant. • Sales not significant until Conner Peripherals, a spinoff of 5.25” drive makers Seagate and Miniscribe, started shipping in 1987. • Conner had a small, lightweight 3.5” drive much more rugged than the 5.25”. • It handled functions electronically that had been managed with mechanical parts. • The Conner drives were used primarily in new laptop machines, where customers were willing to accept lower capacities and higher costs per megabyte to get lighter weight, greater ruggedness, and lower power consumption. • Seagate engineers were not oblivious to the 3.5” drive! • In early 1985, less than one year after Rodime introduced the first 3.5” drive and two years before Conner started shipping product, Seagate showed working 3.5” prototypes to customers! • The initiative for the new drives came from Seagate's engineering organization. • Opposition to the program came primarily from the marketing organization and Seagate's executive team; they argued that the market wanted higher capacity drives at a lower cost per megabyte and that 3.5” drives could never be built at a lower cost per megabyte than 5.25” drives. • Seagate's marketers tested the 3.5” with customers in the desktop computing market it already served (IBM, and value‐added resellers of full‐sized desktop computers). • They indicated little interest in the smaller drive. They were looking for capacities of 40 and 60 megabytes for their next‐ generation machines, while the 3.5” could provide only 20 MB at higher costs. • In response to lukewarm reviews from customers, Seagate's program manager lowered 3.5” sales estimates, and the firm's executives canceled the program. Their reasoning? The markets for 5.25” products were larger, and the sales generated by spending the engineering effort on new 5.25” products would create greater revenues for the company than would efforts targeted at new 3.5” products. • Seagate finally began shipping 3.5” drives in early 1988, the same year in which the performance trajectory of 3.5” drives intersected the trajectory of capacity demanded in desktop computers. • By that time, the industry had cumulatively shipped $750 million in 3.5” products!
- 16. Organizational Maturity Model: Projects, Products, or Solutions? (The fractal that is usually much bigger than you!) • Recognize that everyone says they want a solution • Projects – Customer says “Jump!”, and company says “How high?” – Company brand centered in capability to execute • Products – Company willing to gently say “no” to customers – Typically “market” driven • Solutions – Company says, “We are all things to all people.” – Bring together People, Process, Technology – Professional services consumes/customizes company products – Typically viewed as “end‐to‐end” by customer • Question: Which type is your personal sweet‐spot? Is it aligned with the company’s? Note: Projects and products do not typically play well together if they share execution resources.
- 17. Project, Product, Solution Visualized Typical Incumbent Strategy: ‐ Sustain Market Share ‐ Sustain Customer Satisfaction ID Impact: ‐ Lose Market Share ‐ Decrease Customer Satisfaction ‐ Struggle to Recover “Project” “Product” “Solution” • Build whatever customer specifies • “Recreate the wheel” several times • Eventually, claim a “product” • Suffer code fragmentation • How do we contend with NRE‐based business scaling issues? • Build what the “market” wants • OK. We need a “platform” and API gate‐keeper • Truly, have a “product” • Still, can we service mass customization? • Core engineering builds product • Professional services handles customization • Business scales in products and services Leadership Changes Typically Required Organizational Scale (and typically, Time)
- 18. Fractals and Artificial Life: Describing Companies and Cultures? What’s a Fractal (for our purposes)? A simple concept or structure, iteratively applied Amazing, beautiful, “self‐similar”, complexity emerges What’s Artificial Life (for our purposes)? Simulation of complex living structures and functions Based upon atomic, simple rules, iteratively applied Complex behaviors “emerge” Question: Can we use these as paradigms for navigating the innovation and project management “puzzle”?
- 23. Fractal Behaviors of an Organization Drive Emergent Results and Culture Elementary Behaviors Organizational Structure Emergent Outcomes Observe small factors that integrated to final results Observe self‐similar behaviors at differing scales Emergent project results Emergent company “culture” Executive Sponsorship vs. “Sleepership” Information/Knowledge Silos Roles and Responsibilities Responsibilities and Authority Commitment and Accountability
- 25. tc N1(0) . N(0) N2(0) . N3(0) . Unbounded Growth Requires Accelerating Cycles of Innovation to Avoid Collapse Source: Geoffrey West
- 28. Geeky Musings: Can We “Diagnose” Companies? • The same way we can reduce a digital image to it’s fractal equivalent, can we do the same to an organization? • If so, the possible outcomes are: – The elementary fractal organizational “drivers” and pathologic behaviors would be apparent – The life of the organization and evolution could be visualized (in a monte carlo sense) – Possible IT/HR tools to diagnose, measure, and materially cope with the fractal drivers? – Similar implications in social networks, family dynamics, and many other fields – Sounds like Isaac Asimov’s Foundation series (science fiction)?!? Fractally Represent Images Fractally Represent Organization Emergent Outcomes & Root Causes
- 29. Key Fractals: Execution and Communication in Context • Understand – Industry trends and causal relationships – Competitive, revenue, profitability, and growth impacts – Don’t use technology just for its own sake – Product cannibalization fears! • Get into stakeholder’s heads – The CEO’s – The customer’s – Others (internal and external) • Navigate any dual/mixed C‐level roles – CIO reports to CFO – Dual CTO/CEO role – EPMO vs. silo PMs • Who really drives change/innovation? – Engineering vs. product management – CEOs want minimal features, power users want everything • Be forward thinking, but balance tactics and strategy – If you only listen to customers, then you will only be as smart as them – For disruptive innovation, paradigm shifts must be “on the table” – Is failure really allowed? Because…
- 31. Key Fractals: Know Thy Personal and Company Culture • Alignment is essential in any organization – Clear definitions of roles and responsibilities • Project administrators vs. project managers • Useful process vs. worship of process • “Centers of excellence” processes, delivery, and metrics – Commensurate responsibilities and authority • Misalignment can lead to overly political environments • “Heroes vs. Villains” Culture – Matched commitment and accountability • Too much management tends to inhibits engagement • Is it a Project, Product, or Solution based company? – Core to understanding what/how change and innovation will/won’t occur
- 33. Key Fractals: Create a Shared Sense of Urgency • Facilitate joined up organizational thinking/execution • Partner with Marketing for communications – Internal communications • Be crisp and clear about why it is urgent (“an offer they can’t refuse…”) • Does everyone share the vision, or just versions of it? • Authorized internal communications can serve as a lock‐in • Care and feed the messaging, don’t abandon it – External communications • Media and trade shows must reflect the change/innovation • Align or revise branding strategy, as required
- 34. Key Fractals: Bring It Together With “Joined Up” Thinking • Understand existing company projects, products, and solutions • Leverage knowledge of present “organizational maturity” – In company cultural context, is the change/innovation realistic? – Is it worth the professional risk? • Truly “partner” with people/teams/organizations to bring it about – Think like a developer, project manager, marketer, CEO, etc. • Politics of change: Create buy‐in – No buy‐in = No change – Assert with passion and create excitement – Be proactive, not reactive – Take reasonable risks, but mitigate – Change is hard: Empathize, but don’t fully sympathize – Appeal to the “arrogance” of opponents (by making it their idea!) – Ultimately, “Developers own the code” Projects ProductsSolutions Fractals suggest behavior trumps process, particularly at SMB scale!
- 36. Summary: Agent of Change Key Fractal Behaviors • Regularly evidence deep understanding to Execs/C‐levels • Know what it takes to execute an idea in a company/industry context • Know thy personal and company culture • Create a shared sense of urgency through communications • Maintain awareness of existing “fractal” behaviors and weigh desired outcomes • Of course, execute: generate iterative results • Consider the consigliere as an innovator model • Remember, “joined up thinking” makes it happen! • If you do the above, then: – Projects, products, and solutions can execute with highest success probability – Company and deliverables are crisply branded – Gain executive sponsorship vs. “sleepership” – Build resilient trust with Execs/C‐levels
- 37. Finally, Claim Your Seat at the Table • Significant change/innovation rollouts typically have material impact on company • The stakes can be high! • While execution of an idea is almost everything, its not the only thing – Don’t burn too many bridges, as you will need them to come along next time! – And, contrary to “The Godfather”, a carefully placed horse head won’t quite do it…
- 39. Appendix
- 41. The Game of Artificial Life: Emergent Complexity From Simple, Iterative Rules Life is played on a grid of square cells‐‐like a chess board but extending infinitely in every direction. A cell can be live or dead. A live cell is shown by putting a marker on its square. A dead cell is shown by leaving the square empty. Each cell in the grid has a neighborhood consisting of the eight cells in every direction including diagonals. To apply one step of the rules, we count the number of live neighbors for each cell. What happens next depends on this number. A dead cell with exactly three live neighbors becomes a live cell (birth). A live cell with two or three live neighbors stays alive (survival). In all other cases, a cell dies or remains dead (overcrowding or loneliness).