The upcoming BIL-T conference on Radical Innovation has driven quite a bit of discussion about how to make innovation work at companies and with architects, technologists, and IT departments. This article explores some of the innovation methods IASA uses and how you can guide your company to becoming more innovative more quickly.
There are many organizations that want to drive an innovation culture. They have ideas of open spaces, bean bags, game tables and a group of thinkers constantly testing, constantly experimenting with new business models, new technologies, combining and recombining until they have become Google or Amazon or any of the other popular models for constantly innovating companies. Silicon -anywhere.
But few organizations have the true appetite for innovation nor the awareness of how to truly drive it within a company. In addition, the average board may pay lip–service to innovation, but do they truly want the majority of ‘types’ of innovation?
Consider Greg Satell’s 4 Types of Innovation:
In this model the innovator is based on how well the domain is defined (like quantum mechanics versus retail) and how well the problem is defined (being able to have Wi-Fi on a ship at sea versus understanding weather patterns). By breaking it up this way it becomes apparent very early on that most organizations are actively motivated toward ‘sustaining innovation,’ which while important doesn’t change the fundamental behavior or predictability of business models. Thus, you have the famous Kodak dilemma of inventing something that put them out of business. The innovators dilemma then is much like democracy, how does an organization define innovation in a way that constantly challenges itself, but also delivers consistently, timely, and efficiently.
Arguably, technology has been incentivized for many decades to be efficient, cost-aware and ‘just barely’ innovative. The goal of most organizations has been to create technologists who are dedicated to reuse, scale, predictive outcomes (however impossible those are), and efficiency overall. Meanwhile, innovation is a much messier business. Both breakthrough and disruptive technology innovation are a threat to the businesses they involve, thus creating two major roadblocks to creating an innovation culture, a) the people involved in technology are themselves motivated and incented to be risk averse, and b) most organization leadership are also motivated and incented to be risk averse.
So how does an organization drive and innovate especially today when innovating is the only real solution to staying competitive? Specifically, what are some rules of the road to get toward a more innovation driven technology group?
- Business Models Drive Risk-Appetite: A startup often has a high degree of risk tolerance as there is not as much to lose and the very notion of the startup is based on hope and dreaming (and a lot of sweat and effort). However, even in that space there is a big difference between a clothing retail startup and a heart-monitoring device startup. Defense, banking, government agencies, healthcare all have a few things in common, but one is that their business models are inherently risk averse. This creates an interesting challenge in hiring the right people and growing the right type of culture for innovation. Specifically, it is necessary to create very safe spaces for failure, no-cost experimentation and other culture hacks to allow the organization to adapt to an idea driven, high mistake tolerance necessary for innovation to get going.
- You Can’t Give Someone an Innovation Injection: This is the hardest part about becoming an innovation driven organization. People. People who are not driven by innovation love working for risk-averse companies. And no one wants to fire people who work hard and well. But innovation takes a shift in mindset, and in some cases a new type of thinking. Planning an innovation culture happens in stages and at the heart of those stages is allowing people to find their “uncertainty comfort zone”… In the SATIR change model there are numerous roles and not everyone is comfortable with the deep uncertainty of innovative endeavors. This led to the dual-mode IT methods and other equally silly ways of organizing innovation (silly because an organization cannot make an “innovation group” while everyone else does “the boring stuff”). Instead, the organization must change it’s DNA and HR models to identify innovative as well as necessary investments and be able to work in value management and human dynamics to allow people to learn how to deal with the more uncertain business models that innovation creates.
- Innovation Happens Closer to The ‘Edges’: Traditional hierarchical organizations are dying on the vine, even though humans by their nature will always retain hierarchies (at least until the singularity puts the machines in charge). But the real problems, solutions and ideas happen as close to the customer as possible. Pushing decision making and investment to the edges is a sure-fire way to stay innovative, as long as the organization can deal with the massive sprawl of chaos this creates. This installment will be followed by one on Agile Architecture @ Scale and methods for delegated investment and decision making. which will help in that space. Think highly trained and effective technical innovators as close to the product owners and delivery teams as possible.
- Efficiency and Efficacy Aren’t the Same: Most people equate efficiency with goodness. And in a way it is good, reduced costs equals more margin at the same revenue after all. However, innovation is looking for efficacy for customers unsolved problems or even whole new types of customers as in Blue Ocean Strategy and similar. Efficacy is more about how effective the organization is, overall, in finding a new customer and delivering value to them, in the current business model or inventing a new one. Finding and customers isn’t about selling the current product, it is about filling a void in the current customer ecosystem, especially one that no one is looking at. Airbnb, Uber and the rest changed the nature of the ecosystem. They didn’t solve the problem of sleeping overnight or getting to a restaurant in any truly different way (ok that is arguable, but still a customer sleeps overnight in a bed just a differently owned bed).
- Innovative Is A Process and NOT A Process: The thing that most organizations try to do is create an innovation process. Go to this or that website and submit an idea. Get a reward. TaDa! they are innovating. But innovation impacts much more than capturing ideas from client, customer, stakeholder, or shareholder. It is a process of nurturing ideas, testing them, failing at them, and trying them in different ways. Continuous experimentation and the ability to for those experiments to enter into the change management queue. It takes a degree of faith, a deep understanding of value management and a willingness to lose. Owners are not born, nor are they cataloged. They are burnt by dozens of failures. This eagerness to embrace uncertainty, failure, value, and investment thinking takes much more than just creating a demand shaping cycle for IT, and going back to a previous point, it takes people who are able to handle it (with or without style).
As organizations mature their goals and structures often reduce their innovative capacity. However, there are a great deal of opportunities and new business models, which promise to, slowly, change the landscape. Architects, in the new methods, are becoming critical to the technical investment mentality necessary for any long–term innovation culture in technical business models.
Keep your eyes out for the next installment on innovation “The Innovative Nervous System” in which we will review and discuss methods for connecting disconnected organizations in highly agile and technology driven businesses (which describes all businesses of course). And join IASA for the Radical Innovation Summit coming on March 11!