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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
Find your company's unique innovation style, and nurture it into a powerful competitive advantage Praised by business leaders worldwide, Agile Innovation is the authoritative guide to survival and success in today's "innovate-or-die" business world. This revolutionary approach combines the best of Agile with the world's leading methods of Innovation to present a crisp, articulate, and proven system for developing the breakthrough capabilities every organization must master to thrive today and tomorrow. You already know that effective innovation doesn't happen by accident--it is achieved by careful design. Agile Innovation addresses the three critical drivers of innovation success: accelerating the innovation process; reducing the risks inherent in innovation; and engaging your entire organization and your broader ecosystem in the innovation effort. The key frameworks described here build on the proven success of Agile to provide a comprehensive and customizable Innovation Master Plan approach to sustained innovation improvement in the five critical performance areas: strategy, portfolio, process, culture and infrastructure. Major topics include: the power of Agile in the innovation process, how to overcome innovation risk, the best tools to evoke engagement and collaboration, branding as an integral element of innovation, and the best leadership skills and practices that create the special environment that enables transformative growth. Readers will learn specifically how to create better ideas, develop them more efficiently, and work together more profitably and effectively to achieve breakthroughs. The insights offered in this book are highlighted in 11 detailed case studies illustrating the world's best innovation practices at Wells Fargo, Nike, Volvo, Netflix, Southwest Airlines, NASA,The New York Times, and others, in dozens of specific business examples, in two dozen powerful and unique techniques and methods, and a full set of implementation guidelines to put these insights into practice. Key Insights: * Understand how to implement the many ways that innovation efforts can be accelerated to achieve even greater competitive advantage * Learn to create a culture of innovation, greater engagement, and rich collaboration throughout your organization * Discover how to reduce risk and accelerate learning * Implement your own unique plan to enhance collaborative innovation, from leadership through operations * Integrate key agility principles into your strategic planning decisions for sustained improvement * Explore dramatic new approaches to open innovation that optimize large scale innovation * Apply the latest and best technology tools to enhance innovation, reduce risk, and promote broad participation. This is a must read book, a practical guide for fostering a culture of innovation, nurturing creativity, and efficiently developing the ideas that drive strategic growth. And since innovation is not imitation, you know that copying the ideas and strategies of other successful organizations will not produce the desired outcomes. Hence, all leaders must develop their own way of innovating and nurture the right style of collaborating for their own organization. This book will guide you to find your own unique pathways to success. Blaze your own trail to the high levels of innovativeness and organizational agility by learning from the expert guidance and practical, actionable advice offered throughout this important book.
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Veröffentlichungsjahr: 2014
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CONTENTS
Cover
Praise for
Agile Innovation
Title Page
Copyright
Dedication
About this Book
Mastery of Innovation
Why Don't Large Firms Innovate?
Part I: The Innovation Revolution
Chapter 1: Starting at Sprint Zero
Wait, Is There…Resistance to Change?
The Secret Sauce of Innovation
Be Your Own Revolution
Chapter 2: Becoming Agile Rapidly and Painlessly
Individuals and Interactions
Working Innovations
New Habits
Customer Collaboration
Adapt or Die
The Challenge
Chapter 3: Transforming How We Work
Innovating Is Learning
Transforming Ideation
From Insight to Disruption
The World Is Changed
Transforming Execution: From Assumptions to Evidence
Transforming Time: From Meetings to Productivity
Transforming Organizations
Summary: Eight Organizational Principles
Chapter 4: Thriving in Change
Defining the Innovation Process
Change and Mind-set
A Framework for Transformation
The Innovation Master Plan
Part II: Managing Innovation for Tomorrow
Chapter 5: Accelerating Success
The Need for Speed
The Scrum and the Sprint
The Agile Software Sprint
Innovation and Extreme Sports at Wells Fargo
Uncertainty
The Agile Innovation IdeaScrum
Social Workflow
The Research Cycle: Need Finding, Modeling, Ideation, and Prototyping
Volvo + Apple + Symbio + Agile = Creating a New In-Car Interface in Record Time
The Agile Innovation Process
Chapter 6: Reducing Innovation Risk
A System for Innovation
Strategy for Agile Innovation
Four Types of Innovation
Innovation Portfolio Design
Portfolio Success Factors
Measure to Manage
Broader Innovation Portfolio Metrics
Automating Portfolio Management
Summary
Chapter 7: Engaging with Collaborative Teams
Transcending Limitations
What Is Innovation?
People Are the Core
The Virtuous Cycle: Key Elements of the Innovation Culture
Promoting Comprehensive Transformation at Wells Fargo
Summary: Innovation Culture Metrics
Chapter 8: Building Agile Innovation as a Core Competence
Agile Coaching
Facilitating and Managing Collaboration
Removing Roadblocks
Orchestrating Team Rhythm
Innovation Is a Team Sport
Summary: Courage Is a Core Competence
Part III: Leading the Revolution
Chapter 9: Developing Agile Leadership
How Apollo 13 Was Able to Return to Earth1
Is Failure an Option?
Leadership and Uncertainty
Don't Settle
The Self-Actualized Innovator
Maslow's Hierarchy of Needs
Self-Actualizing Organizations
Metavalues
Action Steps: It's All about Leadership
What Is Your Passion?
Chapter 10: Cultivating Core Creativity
Seeing More Deeply
Multivisioning
Great Stories
Practice
From Fear to Flow
Chapter 11: Achieving an Iconic Brand
Branding and Totems
Overcoming Brand Blind Spots: A Case Study
Brands and Archetypes
Storytelling
The Business Panorama™5
Creating Your Icon
Chapter 12: Optimizing Your Infrastructure
Exploration and Production
Dealing with Uncertainty
The Virtual Infrastructure
Collaboration and Ideation
Workflow
Portfolio Management
Engagement
Connectability
Dashboards
Engagement in a Shared Mental Space
Facilitating Innovation
The Physical Workplace for Innovation
Summary
Chapter 13: Advancing Open Innovation
Engaging Smart People in Your Innovation Effort
Agile + Open = Ecosystem Innovation
Openness in Business Ecosystems
Technology-Enabled Openness
IdeaXML
The Next Generation Tool Set
The Promise of Intelligent Openness
Chapter 14: Traveling the Road to Revolution
10 (Easy) Steps
The Revolutionary Leader: What Kind of Revolutionary Are You?
The Power of Commitment
Chapter 15: Using Agile Strategy to Shape Your Organization's Future
Acceleration
Agile Strategy: The Evolution of Innovation
Three Eras of Innovation Tools
Agile Strategy and the Acceleration of History
The Approaching Singularity
The Agile Economy
Our Conclusion: Agile Capitalism
Appendix A Critical Questions
Appendix B Resources for Your Revolution
Appendix C Definitions
Acknowledgments
About the Authors
Index
End User License Agreement
List of Illustrations
Figure 4.1
Figure 5.1
Figure 5.2
Figure 5.3
Figure 5.4
Figure 5.5
Figure 5.6
Figure 5.7
Figure 5.8
Figure 5.9
Figure 5.10
Figure 5.11
Figure 5.12
Figure 5.13
Figure 5.14
Figure 6.1
Figure 6.2
Figure 6.3
Figure 6.4
Figure 6.5
Figure 7.1
Figure 9.1
Figure 9.2
Figure 9.3
Figure 10.1
Figure 11.1
Figure 11.2
Figure 12.1
Figure 12.2
Figure 12.3
Figure 15.1
Guide
Cover
Table of Contents
Part 1
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Praise for Agile Innovation
“Agile Innovation promises to profoundly transform businesses and institutions. By bridging the worlds of Agile and traditional innovation, the authors enable the transformation of self-organizing toward self-optimizing teams, and offer a map for the journey to the self-actualizing organization. This book is a strategic imperative for anybody aiming for success in a brutally competitive, digitally accelerated business world.”
—Errol Arkilic, CEO, M34 Capital and co-creator of the Innovation Corps
“This thought-provoking and inspirational book is a must-read for anyone seeking to master the art and science of innovation and accelerated business development. Simply put, it's a map that will lead you and your organization to exponential breakthrough success in the new Digital Gold Rush.”
—Jack Canfield, Coauthor of The Power of Focus and The Success Principles
“Innovation is about speed. Agility. The old methods of innovation are slow and rarely involve those who matter most: front-line workers. This book absolutely changes the game and it will change the way you innovate. Don't delay. Read it now!”
—Stephen Shapiro, Author of the bestselling Best Practices Are Stupid and 24/7 Innovation, and former Director of Accenture's Global Process Excellence Practice
“Agile Innovation is a must-read for anyone interested in what will become one of the major stories of the next few decades. The global innovation landscape is undergoing profound changes and companies challenging the traditional innovation concept are poised to win. No one is better placed than this team to provide key insights about the blend of agility and innovation.”
—Tan Yinglan, Author of Chinnovation and Partner, Sequoia Capital
“As an advisor to hundreds of startups, I'm very interested in learning all I can to help foster innovation in rapidly shifting markets. Agile Innovation is a game changer. The authors have brought to us a valuable resource that is filled with pertinent case studies and practical advice. It's one of the best innovation books I've read in years and I think its approach can elevate the art and science of innovation at any organization.”
—Akira Hirai, CEO, Cayenne Consulting
“This book is an outstanding addition to the ‘bible of best practices.’ It is certainly a unique treatise on successful, high impact innovation in the explosive new global digital age. More universities around the globe should be offering courses centered on this book's valuable content.”
—Dr. Dixon R Doll, General Partner, DCM Venture Capital, Past Chairman, U.S. National Venture Capital Association
“Finally, a comprehensive book has been written to narrow the gap for companies seeking to make innovation a core driver of sustainable growth and positive financial impact. Today's corporate leaders must build a culture of agile innovation and this outstanding book is the perfect manual for business today.”
—Harry W. Kellogg, Vice Chairman, Silicon Valley Bank
“Nothing has been written about more in the business world over the last decade than Innovation. However, the authors have brought something quite new to the discussion by weaving together many of the threads into a complex and colorful fabric that will aid any organization in fostering and utilizing innovation to grow and prosper. This idea-packed book will provide valuable lessons for those thoughtful business leaders who realize, as the authors note, the risks of innovation are far less than the risks of not innovating.”
—Elliot E. Maxwell, Director of the Internet Policy Project at the Aspen Institute, and former Special Advisor on the Digital Economy to the U.S. Secretary of Commerce
“Agile Innovation is a tremendous leap forward in innovation thought leadership. The authors first synthesize the best prevailing innovation practices of today and then take it to a whole new level. This ground-breaking book has just the right mix of examples and advice, including hands-on methods and detailed management practices. As a result, this book is an absolute gem.”
—Jacob Hsu, Chief Executive Officer, Symbio.com
“There really is no option but innovation. The authors teach you the art of innovation: building the right innovation processes; reducing innovation risks; amplifying innovation through collaborations; and developing innovation leaders. An insightful and practical methodology for winning through Agile Innovation.”
—George Bickerstaff, Managing Director, M.M. Dillon & Co
“Morris, Ma, and Wu have taken what are on reflection two blindingly obvious bedfellows and put them together in a story that makes sense, and just as important, is a fascinating read. The Agile Innovation concept is not just a good one for start-ups to consider, it also presents a disciplined approach for managing what a great many large corporations currently do not manage well.
—Larry Campbell, knowledge management expert
“Innovation is too often discussed in the abstract, almost as a spiritual totem. The authors of Agile Innovation demystify innovation, and lay out a thoughtful road map for readers to understand how to create innovative organizations. It should be on the reading list of anyone who wants to prepare their companies for the rest of the twenty-first century. All our portfolio companies will certainly receive a copy!”
—Gary Rieschel, Founder and Managing Director, Qiming Venture Partners
“Finally, here's a book that pulls far away from the me-too peloton of innovation tomes. Enlightening, energizing and execution-oriented, Agile Innovation should be at the top of the reading list for professional services firms leaders.”
—Andrew Dietz, CEO of Creative Growth and author of The Opening Playbook: A Professional's Guide To Building Relationships That Grow Revenue.
“Agile Innovation is an essential survival guide for businesses large and small in what is an ever-changing but always fiercely competitive ‘innovate or die’ environment. A clear and thought-provoking synthesis of the principles of Agile development that have revolutionized software development, extrapolated to a set of best practices for innovation generally.”
—Gordon Davidson, Fenwick & West
“Agile Innovation is more than a wake-up call! It is about survival issues in a fast changing, highly complex world. A ‘real must-read’ for all leaders and managers who are responsible not only for the further development, but also for the survival of their organizations.”
—Mark Schmid-Neuhaus, MD, German Fairness Foundation
“Agile Innovation pours a very potent brew of innovation insight and wisdom. This is required reading for anyone hoping to thrive in the highly competitive international marketplace in the twenty-first century. It distills the essence of the innovation spirit into an agile process.”
—Jerome Conlon, Former Global Director Marketing Insight, Nike, VP Brand Planning Starbucks and Sr. VP Marketing & Program Development NBC, President Brand Frameworks, LLC
“Sustainable Innovation: the speed to innovate and the ability to foster a culture or constant creativity is becoming a critical function for organizations given the fast pace of today's global business. Agile Innovation captures the essence of this domain in a succinct, informative and highly engaging manner.”
—George Thomas, Partner and Director, IBM Corporation
“Agile Innovation is a very creative and practical book. It borrows very sharp, useful and pertinent learnings from the AGILE methodology to make the innovation process effective and agile. The book has important lessons for all—senior leaders, middle managers, and young managers.”
—Ravi Arora, Vice President, Tata Sons
“A true masterpiece! Agile Innovation is taking us in our journey to a whole new level of innovation. The powerful collaboration between three talented experts has brought out the best book on innovation ever!”
—Signe Gammeltoft Frantzen, Partner, SandS Design
“If there is one book to read on Innovation, we would strongly recommend this. It is an innovation on innovation with a fully integrated approach. It provides a complete guide from plan to implementation, with the agile approach to manage the process and mitigate risk. This is must-have for management to achieve higher chance of success.”
—Alfred Pang, CEO, TSM Singapore
“Agile Innovation provides wisdom, framework, process, and tools that guide people accomplish great innovation results through collaboration, quick response to change, and iterative working philosophy. It's really a great book about implementing innovation.”
—Arthur Lok, CEO, China Institute for Innovation
“Agility meets Innovation. This is a concept blend that will thrive in facilitating exponential value creation in years to come. The book harmonically covers people, leadership, methodological, technological, implementation, and even philosophical aspects related to this novel integration. It's a great book and I strongly recommend it!”
—Fabián Szulanski, Director, Learning Lab, Instituto Tecnológico de Buenos Aires.
“Langdon Morris, along with Moses Ma and Po Chi Wu, have produced Agile Innovation when it is most needed by the market. As we continue to see an evolution from ‘we must innovate!’ to ‘how do we innovate?’ this commonsense approach to moving your organization from simply talking about innovation to actually achieving innovation breakthroughs is simply elegant.”
—Brett Trusko, President, The International Association of Innovation Professionals, Texas A&M University, New York University
“This book is a must-read for practitioners of innovation. The principles of Agile Innovation can unleash the transformative potential from every corner of an organization, creating sustainable competitive advantage.”
—Annie Donovan, CEO, CoMetrics
“Agile Innovation has the potential to move the entire field forward, through the clarity of its writing and the importance of its message. If you are going to read only one book on innovation this year, make it this one.”
—Pascal Baudry, Founder, WDHB Consulting Group
Agile Innovation
The Revolutionary Approach to Accelerate Success, Inspire Engagement, and Ignite Creativity
Langdon Morris
Moses MaPo Chi Wu, Phd
Cover image: Man Jumping © iStock.com/4x6
Cover design: Wiley
Copyright © 2014 by InnovationLabs LLC. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
Morris, Langdon.
Agile innovation : the revolutionary approach to accelerate success, inspire engagement, and ignite creativity / Langdon Morris, Moses Ma, Po Chi Wu.
pages cm
Includes index.
ISBN 978-1-118-95420-1 (cloth); ISBN 978-1-118-95421-8 (ebk);
ISBN 978-1-118-95422-5 (ebk)
1. Organizational change. 2. Creative ability in business. 3. Success in business. I. Ma, Moses, 1956-II. Wu, Po Chi, 1948-III. Title.
HD58.8.M653 2014
658.4′063–dc
232014023093
Dedication
For Elizabeth
With love always, and deep appreciation for all you do.
—Langdon
For Qian
Who is both agile and innovative in the ways of love. Thank you so much for helping me see how beautiful life can be.
—Moses
For Mary
Without your loving support and encouragement, my life would have no meaning. Your innate entrepreneurial spirit has taught me the essence of agility and focus.
—Po Chi
About this Book
Charles Darwin said it quite well:
“In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.”
Innovation, collaboration, and improvisation are essential forces shaping all of business and all of modern life, and they've become vitally important for the individual, for the organization, and indeed for all of society.
The significance and importance all three and their close cousins, adaptation, leads us to some essential questions:
How well are you and your company prevailing in the current environment of accelerating change?
How well positioned are you and your company to benefit from the countless new opportunities that change is bringing?
Does your organization have a rigorous innovation process?
Are you sufficiently agile to survive and to succeed?
These questions matter so much because the scope of the challenges that every organization faces today is nothing less than enormous. Threats are everywhere, technology is accelerating, and success clearly belongs exclusively to those rare organizations that have the capacity not only to adapt to change, but also to thrive on it, and indeed to create it.
How do they do that?
The great companies disrupt industries by reshaping entire market ecosystems. The market is forced to adapt to them.
Perhaps your organization is among these exemplars?
If not, then it's likely that Agile Innovation can benefit you. That is the promise of this book.
Mastery of Innovation
The art and science of creating change is really the mastery of innovation, but innovation takes many forms: new products and services that turn customers into evangelists; new sales channels that dominate markets and confound competitors; accelerated product development time frames that amaze and delight customers, investors, and stakeholders; and novel technologies that inspire wonder.
Agile Innovation asks:
How can these outputs be achieved not just once, but consistently?
Our answer, and the essential argument of this book, can be summarized in this way: The market is becoming brutally competitive. It is much like a war, and to survive, your organization must become proficient in innovation, which, of course, could become one of the most powerful weapons in your arsenal. In fact, given the accelerating rate of change, there really is no other option but innovation.
What is required, then, to master innovation and to become an agile, adaptive, winning organization?
First, design the right business processes that enable you to out-innovate your competition, combining quality and speed.
Second, reduce the inherent risks in innovation while making the right investment decisions in new ideas.
Third, generate ideas that are better than everyone else's by effectively engaging a larger group of people—the entire organization as well as its broader ecosystem—as effective co-ideators.
Fourth, develop and demonstrate exceptional leadership skills, because making this all happen will probably require that you provoke and lead a genuine revolution in how your organization operates.
These principles constitute Agile Innovation, which is a blend of great advances in technology development (Agile Software Development) with the leading-edge practices and principles of innovation management.
How easy to do is all this?
Well, it may not be so easy at all, and it's probably going to be a big challenge. But it is definitely achievable, and the rewards from doing so will be great.
Anyway, what's your next best alternative to innovation? Is there even any alternative? Probably not.
Why Don't Large Firms Innovate?
The development and refinement of Agile Innovation has been the focus of our work for quite some time, and it is a passion that the authors share wholeheartedly. As a consultant (Langdon), technologist (Moses), and investor and educator (Po Chi), we've been deeply engaged in developing, practicing, and sharing the principles and practices of effective innovation management over the past two decades.
Underlying this work has been a constant theme: Large organizations, by their very nature, have difficulty embracing a culture of continuous innovation, and they struggle to adopt the necessary practices.
But this is neither necessary nor inevitable. The belief has to be changed, or there are going to be a lot of unpleasant consequences.
Why don't most large firms innovate well?
Many of the root causes are related to the challenges inherent in managing a large enterprise: the need for coordination, scale, efficiency, and sustained profitability in a brutally competitive, global marketplace, and an equally brutal securities market.
Further, the modern corporation is typically built on structures, rules, and processes that may also inadvertently stifle innovation, or even kill it outright. Whether intentional or not, the premature mortality of ideas and innovations occurs regularly. The logic behind suppressing innovation may even make sense, in a limited, short-term context, such as when senior executives try to exercise control over unwieldy organizations so that critical objectives can be achieved.
In so doing, however, they often sacrifice important long-term benefits. Hence, one of our goals in this book is to show how short-term objectives and long-term needs can be balanced, and how operating units and innovation teams can work in close and effective partnerships rather than as bitter rivals that compete for resources.
During the years that we've been applying and refining these concepts, we've also been nurturing new enterprises (as entrepreneurs, consultants, and investors) and new technologies (as scientists and technologists). Through this work, we've come to appreciate the value of the methods widely known in the tech sector as Agile.
Agile refers to a set of principles and practices that software programming teams have developed with two major goals: to accelerate their work and to reliably produce work of the highest quality. By reducing the burdens of bureaucratic project management, they also free programmers to work more productively and with much greater satisfaction. This effort has been amazingly successful, and a robust methodology has emerged since “The Manifesto for Agile Software Development” (www.agilealliance.org/the-alliance/the-agile-manifesto) was published in February 2001.
In this book, we are delighted to be able to bring the two concepts together into a unified, effective, and practical methodology. How are Agile and classical innovation management related? One way to think of it is this: Agile is a speedometer that allows you to know your speed, and therefore gives you the ability to calculate when you'll reach your destination. Without a speedometer or odometer, reliable measurement, in other words, you have to guess, and the longer and less familiar the route, the worse your prediction will be.
Agile Innovation, in complement to your Agile speedometer, is the global positioning system (GPS) that helps you stay on course. Even without plotting your course in detail ahead of time—or developing comprehensive documentation and specification—you can get started right away, and if you make a wrong turn or hit a traffic jam, your Agile Innovation GPS makes a course correction. Whether the journey is 10 miles or 10,000, you'll always know the estimated arrival time.
In the applications of Agile Innovation we have completed to date, the approach has proven to be a powerful enabler of success, and we hope that as you traverse these pages you'll find the blend of Agile with Innovation a valuable speedometer and GPS for innovation in your own enterprise.
Agile Software, Agile Innovation, and Agility
Please note that in this book when we capitalize the word Agile, it refers to the formal practice of Agile Software Development methodology. We use the terms Agile and Agile Software when we're referring specifically to the movement that has grown out of the Agile Manifesto. You will also notice the term Agile Innovation, which refers to the overall innovation management model that we develop throughout this book.
When we don't capitalize it, we mean the more general concept of agility, which refers to a more general capacity to adapt to change.
David versus Goliath
Many practitioners and advocates of Agile tend to see themselves as Davids, small, lean, and determined, standing toe-to-toe on the battlefield and fighting an enormous bureaucracy of Goliaths, whose sole function is to suppress their creativity, their innovativeness, their productivity, and even the joy they find in their work.
Consequently, in much of the Agile literature, there is an undertone of rebellion, and determination to defend the capacity of programmers to self-organize because they love their work and are fully committed to performing to the utmost of their abilities.
In this respect, the Agile movement reflects a profoundly important and meaningful inner drive.
Inner motivation is the root system that supports great works of genius. External motivation, on the other hand, is based on reward and punishment and can achieve, even at its best, only compliance.
This burning desire to achieve greatness is reflected in the creation of Agile, and this principle of inner drive is also a key premise of our work. By extending this same energy, the same drive, beyond a group of programmers or a research and development team to other parts of an organization, tremendous value can be created and captured.
Although our passion is to direct this marvelous innate creative force specifically toward innovation, this book will show you how the same concepts and principles can be applied in a great many aspects of your organization.
What is the story of Agile Innovation?
The shift we are proposing is from traditional, top-down, control-oriented management to self-organizing, customer-driven Agile Innovation. This is, of course, nothing less than a revolution.
In Part 1 you'll learn what this new way of working entails and why the powerful forces that are driving the economy and society will most likely require your organization to engage in this type of revolution sooner (better for you), or later (procrastinating will come with lots of adverse consequences).
In Part 2 we'll help you design the specific work processes that are necessary to create change and empower innovation throughout your own organization.
In Part 3 we'll suggest the critical factors for you to consider as the leader of your organization's revolution, putting your plans into action.
Innovation is a great journey of creation, and Agile Innovation is the same, only faster and perhaps better. Thank you for joining us!
Part IThe Innovation Revolution
A new movement is emerging.
Product and technology development teams all over the world are now quietly engaged in a highly effective revolution that is changing business forever.
They are self-organizing to adapt to the accelerating rate of change and the complexities of the global digital age. Industry after industry, from Internet software, to aviation, to digital health care, to mobile telephony, is using a process called Agile to turn out better results in less time.
Agile is fundamentally changing the way that business works.
Soon Agile will move beyond the technology world because the insights it reveals are applicable across the entire organization.
This book describes Agile Innovation management, a radically new and eminently practical approach to the challenge of survival.
When this happens, a true revolution will begin—not something limited to the self-contained world of software development, but instead spreading geometrically, catching on in every industry.
The revolution we speak of isn't the kind where people wear berets, wave banners, and hope for a coup d'état. The revolution we mean is a paradigm shift, as described by a modest book published 50 years ago, The Structure of Scientific Revolutions by physicist Thomas Kuhn, which went on to be one of the most influential books concerning the history of science. 1
His core idea is that a paradigm is an intellectual framework that makes research possible, but which at the same time bounds knowledge and results in resistance to the development of new frameworks. A scientific revolution occurs, according to Kuhn, when scientists encounter anomalies that can't be explained by the current paradigm. When enough anomalies have been collected, the discipline is then thrown into a state of crisis, until eventually a new paradigm is formed, which then gains its own followers. An intellectual battle then ensues between the followers of the new paradigm and those clinging to the old.
These insights have been so influential because they describe how the world works—instead of steady, cumulative progress, we actually experience discontinuities and periods of turmoil, uncertainty, and angst, until in the end such a crisis is resolved by a revolutionary change in worldview, in which a new paradigm replaces a now-deficient one.
We are going through such a change today. The old way of working has become swamped by the blinding speed of change, and its bureaucratic structures cannot keep up, leaving organizations of all types struggling for breath, struggling to keep up. The new, emerging paradigm is characterized by the concepts and principles of agility, and thus the Agile Innovation Revolution is a manifesto to guide you toward your future.
It's a new world coming, and by using these techniques and methods to achieve new levels of productivity and collaboration; by empowering and leveraging self-organizing teams; by increasing insight, innovation, continuous learning, and knowledge sharing; and by forging the innovation culture, your organization can speed up its internal clock to survive and to succeed.
In these first four chapters, we will explore the genesis of this revolution:
Chapter 1
, “Starting at Sprint Zero: A Better Way to Innovate,” is an introduction to the current state of Agile project management and classical innovation theory.
Chapter 2
, “Becoming Agile Rapidly and Painlessly,” explains Agile theory and then presents the basic concepts of Agile Innovation management.
Chapter 3
, “Transforming How We Work,” delves into the process of transforming both innovation and execution.
Finally,
Chapter 4
, “Thriving in Change,” reiterates why innovation is imperative for any twenty-first-century enterprise or organization.
Note
1.
Kuhn, Thomas S.
The Structure of Scientific Revolutions.
4th ed. Chicago: University of Chicago Press, 2012.
1Starting at Sprint ZeroA Better Way to Innovate
The software industry is turning around and radically improving. The uncertainty, risk, and waste you are used to are no longer necessary.
—Ken Schwaber and Jeff Sutherland1
How is Agile changing the world?
Let's begin with a bit of background.
If you are new to Agile Software technique, then the term sprint zero, as used in the title of this chapter, may not mean much to you, but for Agile practitioners it means the initial phase of work where you sort the project out to make sure you start properly when you're about to tackle a large programming endeavor.
In Agile terminology, the word sprint refers to a one- to two-week chunk of work, during which a programming team sets specific goals for itself and then works swiftly to achieve those goals.
When work is organized this way, in small and manageable chunks, brilliant and remarkable results have been achieved in the development of large software systems, the kind that run banks, airlines, health care systems, and even governments.
This is in direct contrast to the well-documented inadequacies of non-Agile approaches, which have led to extensive delays, cost overruns, and sometimes brutally terminal failure.
Epic Software Development Failures
You would hope that the technology industry has learned its lessons by now. But you might be wrong about that. The state of Oregon, for example, recently cancelled work on its massive online health care exchange, Cover Oregon, and switched over to the federal government's system, but not before paying $134 million to Oracle for its years of work on the failed project.2 This certainly qualifies as an epic failure, but it is by no means unique in its epicness. Studies by Standish Group published in its annual CHAOS Report regularly find that nearly two out of every three information technology projects fall short or fail entirely for various reasons, most of which are related to the use of a dysfunctional process. This is an amazingly bad performance rate across an entire industry.
But this may be just the tip of the iceberg. Numerous reports and studies have looked at failed IT projects costing hundreds of millions of dollars, and even billions, including an $8 billion failed project for the U.S. government's taxation agency (the IRS), a $170 million project for McDonald's that was completely abandoned, a $600 million baggage-handling system for the new Denver airport that never worked, and a project for the London Stock Exchange that was originally budgeted at £6 million and was ultimately cancelled after 10 years and £800 million.3
Hence, the intent of Agile to find a better way to organize IT projects is not a trivial exercise, but could in fact be significantly important.
The Agile movement was born in response to millions of dollars wasted in failed technology projects and the horrors of even bigger multibillion-dollar disasters. The movement was nurtured and refined by programmers and project managers who were fed up with the ignominy of it all, and who knew there simply had to be a better way. Not finding one ready at hand, they invented it.
Now Agile is being used everywhere, and for very good reasons: It works brilliantly well.
At the same time, the innovation movement has also been evolving, and it's been having a clear and definitive impact on corporate strategy, and particularly on corporate results. Companies that have mastered the art and science of radical innovation and empowered ideation, collaboration, and corporate transformation are deservedly recognized worldwide as market leaders. They've got the magic and the mojo. They've got the market share, too, and the enviable stock prices.
We could cite the usual American exemplars: Apple, Google, Facebook, Starbucks, Procter & Gamble, and Tesla, companies that seem to have taken over the world with out-of-the-box thinking, novel products, and cool new business models. There are many examples in Asia as well, such as Alibaba, Baidu, Tata Group, Samsung, and Toyota. Europe, of course, has many as well—EasyJet, L'Oréal, Unilever, and SAP among them.
We also must note the very long and sad list of firms that were not able to sustain their presence at innovation's leading edge, fell behind, and suffered greatly. Nokia (swamped by Apple's iPhone), Yahoo! (displaced by Google), Kodak (which invented the digital camera and then missed the revolution), Xerox (missed the small office and home office copier market), Lucent (once Bell Labs, the pinnacle of technological prowess), and Sony (which fell from the heights to also-ran status) are only a few of the most famous disappointments.
What causes these companies to lose their mojo? What causes their innovation efforts to falter?
One of the main reasons, sadly, is reported by various studies and research groups ranging from the Product Development and Management Association (PDMA), to McKinsey, to IBM, which variously estimate that newly launched products continue to experience astonishing failure rates of anywhere from 30 percent to around 60 percent. In other words, between three and six out of every 10 innovation projects do not succeed, and even worse, this is happening at the tail end of an innovation pipeline process that was supposed to weed out the losers and focus scarce resources only on the winners. What a sad story of disappointment, what a tremendous waste of resources, and what an indictment of the innovation processes and methods that so many companies are using, which, obviously, are not working.
There has to be a better way.
Wait, Is There…Resistance to Change?
So why hasn't every company made the shift to new and better methods?
Perhaps you've heard some of these excuses in your organization…
We already have too much on our plate.
We just can't afford an innovation [fill in the blank].
The boss will never go for it.
They don't pay me enough to take on this kind of [fill in the blank].
Why should I bother? Someone else will get all the credit.
It's way ahead of its time.
Maybe next year.
Too much chance of failure.
We'll try it after the merger.
I'm not compensated for being innovative.
The return on investment isn't good enough.
It's not my job.
This is only a small sampling, of course. A Google search of the phrase idea killers will show some amusing but also painful and poignantly biting lists, including a collection of 103 different phrases offered on a website called freedom-school.com (if the website still exists when you read this book). Based on the sheer number of sites uncovered by our search for idea killers, it would seem that the sport of idea killing is quite a popular one, and indeed we've all witnessed this in meetings at one time or another.
So, given the prevalence of idea killing, how could we be surprised that people hesitate to take on the challenges of innovation? How unpleasant is it to be humiliated in a meeting by a sly zinger, meant precisely to derail your innovative spirit? Innovation is certainly filled with risk, uncertainty, and ambiguity, and these are definitely not characteristics that modern organizations are built to love. Quite the opposite is true.
On the other hand, given the tidal wave of change across society and the economy that has occurred over the past 20 years, how can any organization's leaders believe that they can survive, or thrive, without adapting, and thus without innovating?
Simply put, only organizations that innovate have a chance of survival in the long run. Those that don't…will not.
One of the major reasons for the explosion of change has been the technologies of the Information Age, a steady flow of innovations that have resulted in a miraculous 98 percent reduction of the costs of computing and communication during the past two decades.
Technological changes, however, arrive like tsunamis in wave trains, one after another, boom, boom, boom! Although what we've just experienced was certainly massive, it's important to note that it was only the first wave, and bigger ones are on the way.
Such as? Another 100-fold increase in the performance/cost ratio for computing and communications will arrive during the next two decades, bringing with it even more disruption. This is roughly equivalent to taking all the power of every supercomputer that exists in the world today and stuffing it into your video game machine; it will be like turning your smartphone into a personal genius companion.
The impact on every industry, every company, and every one of us will be enormous and unstoppable as we experience unimaginable improvements in all the products and services we use across all aspects of our lives.
In the face of this impending onslaught, how can linear thinking, shifting the blame, idea killing, stalling tactics, static business processes, or even what we consider today's best practices in innovation help us maintain our competitiveness? Alas, they can't.
What's already required today, and what will be absolutely essential tomorrow, is a rigorous process of innovation management that reliably creates better ideas, and effectively and efficiently turns those ideas into both tangible and intangible business value. This process will involve nearly every aspect of the organization, and thus everyone, so participation by the many rather than the few will be inescapably necessary. Everyone from the executive boardroom to the creative geniuses in the labs, to those who provide their deep expertise in a particular aspect of business, all the way down to the rank and file—in the real-time enterprise of the twenty-first century, innovation has to come, and will come, from everywhere. (As we will shortly discover, this brilliant innovative expertise will come from outside, too.)
It is therefore time for new thinking, focusing especially on how we can successfully redefine how we're going to survive and thrive in the face of such tremendous competitive pressures.
That's what we mean by Agile Innovation. Are you ready? Good, then let's go.
The Secret Sauce of Innovation
There's a saying among venture capital investors that “Entrepreneurs are like tea bags—you never know how strong they are until you put them in hot water.”
Companies, and their leaders, are the same. In today's demanding business climate, there's plenty of hot water for everyone, in the form of new technologies and new competitors that are providing plenty of challenges for your leadership team.
Despite the grumbling that accompanies a capital crunch or economic austerity, lean years are actually good for young companies. With people, challenges can build character; with companies, it can bond teams, enhance innovation, and instill operational efficiency. Many of today's highly respected brands, including General Motors, IBM, Hewlett-Packard, Microsoft, and Apple, started during the lean times of recession. GM was founded during the panic of 1907, IBM was founded during the panic of 1910–1911, HP was born during the Great Depression, and both Microsoft and Apple were founded during the depths of the oil shock era when the U.S. gross domestic product plunged a daunting −3.1 percent.
One of the reasons that great companies emerge during bad times can actually be explained by the way learning occurs in the human brain. Neurophysiologists use the term plasticity to describe the brain's capacity to modify its own organization, essentially the acquisition of new skills and learning. The concept of being plastic refers to something that can be easily shaped, or molded, meaning that it is not fixed. Hence, the plasticity of your brain refers to its capacity to learn, to be reshaped by experiences.
Interestingly, as recently as several decades ago, most neurologists believed that the brain's neocortical areas were fixed after a certain stage of development, nonplastic. But recent studies have found that environmental conditions can alter behavior and cognition in adults as well as in children.4
This is big news. Science confirms that the adult brain is not static but that it, too, is constantly reshaped by experiences. The Agile Innovator therefore seeks to know precisely what types of experiences can be leveraged to accelerate learning, because learning is, of course, critically valuable to future success.
Stress can also be a powerful driver of change. Not overwhelming, paralyzing stress, but moderately high levels of difficulty and challenge actually do facilitate learning. Apparently, the brain admits to itself, “My survival is at risk. I'd better start paying more attention and focus on adapting, learning, and coming up with new ideas…right now.”
When you're at risk, when you have skin in the game, then you're motivated to focus and come up with genuinely brilliant ideas.
So our point is that starting a company when the entire economy is experiencing a higher-than-normal level of stress can lead to great outcomes over the long term. We see this clearly in the story of Southwest Airlines.
The 10-Minute Turn
When Southwest Airlines was just being established, numerous obstacles had to be overcome, not the least of which was that its basic business model was illegal in Texas, its home state, and new legislation was required for the company to commence operations. After some years of lobbying the company was within days of running out of cash when the legislation was finally passed and signed. After that, the frantic work began to create an airline.
Airplanes were bought, staff were hired and trained, advertising began, and then they started carrying passengers.
In the early days, the company operated four aircraft and served three cities, Dallas, Houston, and San Antonio, on a flight schedule that offered high frequency at a very low cost compared with its competitors. However, as is common with young businesses, it was not long before there was a cash crunch, and it became necessary to sell one of the four aircraft. This would necessitate cutting back on the fight schedule, which would in turn signal to customers that the company was in trouble and drive customers back to the competition, resulting, they realized, in a death spiral.
Consequently, it became necessary to accomplish something that was considered impossible: to fly exactly the same schedule with just three aircraft instead of four. This required that planes land, be unloaded, be reloaded, and depart all within 10 minutes, rather than the existing industry standard of 1 hour.
A SWAT team was formed and was given 72 hours—a weekend—to figure out how to do it. “Most of us, not having an airline background, had no idea that we couldn't do this, so we just did it. We knew our survival was at stake.”5
Without the pressure of imminent collapse, the transformation probably would not have happened, and certainly not in the decisive way that it did.
Also, as it turned out, there was an additional benefit that had not been part of the initial thinking. When aircraft are flying with passengers in the seats, they generate revenue, but when they are on the ground, they do not. Putting the aircraft back in the air quickly and flying a full route schedule with 25 percent fewer aircraft meant higher fleet utilization, resulting in a better return on assets and increased profitability.
During the 1990s, Southwest flourished while many other airlines were descending into bankruptcy, and its market capitalization kept growing, too. At one point, the combined market cap of American, Delta, and United was less than Southwest's, even though in terms of revenue and assets Southwest was tiny in comparison. The 10-minute turn was a big part of its success.
The success of this innovation-under-duress also contributed significantly to the dynamic, innovative culture that pervaded the company. People throughout the organization continued to seek and to find new ways to reduce costs and expand revenues, not only at the behest of management, but often also following their own initiative.
Unfortunately for Southwest, its amazing run to greatness was interrupted by the events of 9/11, which indeed put all airlines into a defensive mode. And just at that point the other shoe dropped, in the form of rising fuel prices, which further hammered Southwest's profitability. It has not escaped these pressures, and while the innovative spirit of the company persists, its competitive advantage has significantly eroded while the larger airlines have finally recovered their footing in the market and on Wall Street.
What Southwest needs, perhaps, is a new generation of innovators to figure out how to differentiate the brand yet again and further develop the once-innovative business model. But it's also possible that Southwest's performance has regressed to the mean of the industry, and its days of superlative performance are in the past. It may indeed continue to be a great company, but without a brilliant innovation or two, it will no longer be an outstanding leader in the industry.
Under stress, groups respond just as the human brain does: they react with fear, they learn…and they innovate. Although the initial reaction may be an immediate urge to withdraw and resist, some advanced circuitry eventually activates. As people expand their creative capacity to solve problems, this invariably strengthens their long-term skills at adaptation and agility, thus providing manifold benefits.
And even better, you, in your role as Agile Innovator and leader, can promote, facilitate, and accelerate this kind of transformation. (More about that later.)
So, back to our point about starting a business in a time of stress—this era is one of those times of stress. The exploding Information Age, and all the change and chaos it's creating, presents a real and significant threat to every organization, but at the same time it brings a remarkable opportunity for innovative thinkers to create or find brilliant new opportunities. The next Google, the next Southwest Airlines, the next Amazon.com, the next Facebook…they're all out there.
But when will they make their move?
It could be that the strategy used by world-class bicycle riders to win races such as the Tour de France is the right strategy: Many of the best make their move when they're climbing the toughest hills.
It works like this. In competitive bike racing, the riders begin in a single group, the peloton, or large mass of riders who are grouped together during most of the race. (Peloton is French for “ball,” as in a large ball of riders.) Because most of the riders remain tightly clustered in the peloton, only the few who are in the front face the full effects of wind resistance. Those drafting behind, much like in a school of fish, the V formation of birds in flight, or an auto race, don't have to work nearly as hard to maintain the pace. Consequently, it's very difficult for the lead riders to escape the peloton, because they're already working so much harder than the other riders behind them and thus they simply lack the energy, a root problem related to the very nature of human physiology, and the factor that makes the sport of bicycle racing so very interesting.
The peloton effect is reduced, however, on hills, especially on steep ones, because everyone has to work much harder to ascend.
Steep hills give the strongest riders the opportunity to break away and outdistance the crowd because they put all the riders under more stress.
Hence, this is the tactic elite riders work so hard to perfect, that of timing the breakaway correctly, and then relying on superior conditioning to sustain the immense individual effort required to maintain a lead so that the peloton does not catch up. The greatest riders throughout the history of bike racing have been the very few who could do this consistently.
The same principle applies to business. During stable and good times the business environment is like flat ground. Under these conditions it's very difficult for any firm to break away. The majority of contenders are content to remain in the peloton, reaping comfortable profits, conserving their energies, and waiting to pounce on any rider silly enough to try to break away. But great business executives take advantage of the hills, the major challenges, and they use those opportunities to make their break for leadership.
Hence, when there's a recession or a major economic transformation occurring, such as the current digital revolution, it can be much easier to break away from the peloton, from all those firms that are content to ride along in a large pack with everyone else.
Does this sound like an overly simplistic interpretation? A study by McGraw-Hill found that firms that advertise during a recession, those gutsy enough to make their move, receive an amplification of sales growth compared with competitors who cut back. The gain, or lift as they refer to it, was found to be an improvement of 135 to 275 percent during bad economic times for firms that stepped up their advertising. In other words, advertising packs twice the wallop during a recession (as long as you actually make it through the bad times).6
From Eighth Place to First
Another stunning example of stress-induced contrarian success is the story of Adolph Ochs, publisher of the New York Times from 1896 to 1935.
When he acquired the Times in 1896, it was the eighth-largest newspaper in New York City, with only about 8,000 readers. There was a brutal newspaper war going on at the time, and one of Ochs's first moves was to reduce the price of his paper from three cents to one cent. Under his astute ownership, the paper grew by focusing on high journalistic standards at a time when most newspapers were still fiercely partisan, and the Times developed a very positive reputation for its objectivity.
By the 1920s, readership had grown to 780,000, but then came the crash of 1929. Ochs, however, did not succumb to the pessimism raging throughout the city, and at one point he issued this memo to his staff saying that “We must set an example of optimism. Please urge every department to go ahead as if we thought the best year in the world is ahead of us.”7
Despite Ochs's optimism, major advertisers cancelled their contracts and the paper's revenues plummeted. Ochs avoided layoffs only by opting to spend the $12 million surplus he had accumulated during the roaring 1920s, using it to pay salaries, keeping the staff intact despite steep losses. Perhaps more important, he insisted on continuing to improve the editorial quality of the paper even as advertising revenue was falling significantly.
When the Great Depression finally ended at the outbreak of World War II his strategy had paid off, as the New York Times had more readers than any other newspaper in the country, which meant that it could also charge higher advertising rates. Ochs's vision, commitment, and risk taking were all validated.
Ochs is a great example of a visionary leader who breaks away from the peloton by using a steep hill to put his competitors at a disadvantage. This move takes courage, perhaps great courage, as well as self-confidence, and a clear view of the future. Ochs had all three. So can you.
Remember, when you're ready to try to break away from the peloton, the steeper the hill is, the more likely you are to succeed. This is true, that is, as long as you're the best-conditioned athlete in the race and you have a brilliant plan.
Our hope is that this book can help you get in tip-top racing condition and inspire you to prepare and execute a magnificient plan.
Today's pervasive bad news, the news that causes everyone else to moan and complain—the economic malaise, the chaos that the digital revolution created, the impacts of outsourcing, political instability, global competition—all of these offer amazing opportunities to outdistance your competition.
When you know how to leverage bad times and use the right amount of stress to enhance your creativity and to exploit the complacency and fears of your competitors, then you can indeed surge ahead.
Be Your Own Revolution
Is it your goal is to learn how to become a true innovator—that is, to develop both the personal mind-set and the organizational culture that embraces disruptive innovation as a core value, practices continuous innovation as a core methodology, and produces breakthrough innovation as a consistent output?
The key characteristic of genuine innovation is the intent to avoid copying anyone else's innovation process…because if you imitated somebody, you've already failed. Genuine innovation is all about finding your own voice, your own path to a new kind of creativity that you can call your own. It's all about becoming your own revolution.
As Jobs said in his now-famous Stanford commencement address, “Your time is limited, so don't waste it living someone else's life. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition.”8
