Showing posts with label Csutomer Value. Show all posts
Showing posts with label Csutomer Value. Show all posts

Sunday, March 22, 2020

Why does the business love Agile development?


Agile continues to be the preferred way of delivering business outcomes. Still organizations use waterfall techniques especially to the system of records. But it is agile that is becoming de rigeur for system of innovation and differentiation. Agile’s willingness to fail is the primary reason that endears it to the business.

I have been involved with more and more teams, especially in Europe. There are some very clear observations that are quite evident.

  1. The mentality and emotion quotient surrounding a waterfall project team is still based on avoidance of risk. Of course, they do fill up the RAID log as it is commonly known. Documentation trumps up all other requirements.
    Agile Model in action
  2. A pre-mature optimization happens in the delivery of such waterfall projects. Many factors contribute to it. One is the time lag behind the business requirements and delivery when everything changes around you in a faster manner. Second, the freezing of architecture and design without understanding some of the future-changes start pushing the projects into a tight corner.
  3. Integration happens at the last and that’s where new but significant risks start to emerge as the project deals with other adjacencies.
  4. Agile embraces risks and that’s what makes it adopt a different approach. The team starts in a humble manner and learn as they progress. Early and constant feedback changes the games.
  5. With each sprint / release, integration happens. The product may be incomplete but it is brutally subjected to feedback and criticism. In general, the right behaviour, in agile teams, doesn’t make them nice and avoid negative feedback. The old adage “Silence is golden” doesn’t work.
  6. As the teams, in waterfall, are split into smaller units for tighter control and delivery, the risks due to dependencies (known or unknown) rise faster. Michael Nygard says in Architecture without an end state “The problem with dependencies is that you can’t depend on them.”
  7. Waterfall assumes the leader is quite capable and prone to enforcing a herd mentality. This works well to avoid a difficult terrain but not when the business is waiting to expand. In agile, the management trusts the teams to find their own way. This is not to was off one’s hands completely. After spending time to help the teams understand the big picture, trust the team to negotiate further. Equipping and empowering culture are important.
  8. Recognizing that change is quite frequent, it is better to work on what we know latest instead of applying an artificial freeze. Agile teams remain flexible.
  9. Team happiness becomes critical in agile teams. Continue to measure it.
  10.  Agile teams indulge in such planning where more minds are put to work. Instead of waiting for someone to solve their problems, they are encouraged to find their own. The team, typically, rises to the challenges and comes with measures.

Not all parts of IT need to become fully agile for the sake of it.  But, the entire IT, as a coherent entity, needs to be agile o rnimble enough to the changing business. Where it makes sense and where IT remains a blocker to realizing business outcomes are those areas that should embrace this culture. 

Finally, a word of caution. Do not brand agile with no-process or free-for-all approach. It is where you lay the stress that becomes different. Projects in agile mode are also supported by quality and rigorous document and associated metrics. Informality should not be confused with indiscipline.

Tuesday, October 8, 2019

How to transform the organizational DNA into an "Innovative" one?


How is innovation driven in your organization? 
What is the role of your CEO? 
How do we push this into the DNA of the enterprises? 

Well, here are some thoughts:

Today, every enterprise is subjected to more triggers and disruptions than ever before. To me, the critical ones are:
  • Impact of digital / new technologies in business (diminishing margins, eroding of competitive advantage etc.) as well as in employee workforce (changing skills, automation, type of jobs that are going to be generated etc.)
  • Learning space has undergone a rapid change. Take MOOCs. Today, the very concept of going to university to acquire skills is being keenly debated. Give a laptop with an internet connection. People can start business or provide value. The barriers to traditional thinking and the required infrastructure have gone out of vogue rapidly.


Before answering the innovation related question, we need to understand how to interpret “INNOVATION”. First and most important point is to differentiate this from INVENTION. Innovation implies an invention that is commercialized. ISO defines this terms as “Ideas that are implemented and deliver value to customers and enterprises.”

Innovative companies are always, a few steps, higher than the rest. This manifests in two forms mainly – higher profits and/or higher growth. Innovation triggers could be many – New technology, New business model, Gen Y skills and Digital disruption, Market opportunities etc. 
  • Innovation can never be serendipitous or accidental. Every enterprise must understand the factors responsible for an innovative organization and try to set up and sustain.
  • Two key factors are important for nurturing this – CULTURE and STRUCTURE. If the underlying cultural issues are not addressed, no amount of fancy INNOVATION OFFICERS can bring any tangible benefit. The structure is a powerful enabler of innovation. 
  • Innovation can happen incrementally or radically across multiple dimensions. Here is a quick table to visualize this.


Innovation Dimension
Level (Incremental)
Level (Radical)
Business Model


Process


Product or Service


Management System


Production



  • Another way to look at the innovation is to understand the type of changes and the market.

New Concept / Process / Technology
Disruptive Technology
Breakthrough Innovation
Existing Concept / Process / Technology

Incremental Innovation
Disruptive business concepts

Existing Market
New Market

  • We can also look at strategic innovation, open innovation, value innovation etc. In the best seller Blue Ocean Strategy, we hear “Value innovation” that aims to make the competition irrelevant as compared to the traditional red ocean strategy that aims to be one-up.
  • Open innovation brings the organizations and external parties together with tremendous improvements in business model or new services or license fees. This can be outside-in.
  • Another way to see this is a PUSH or PULL type. PUSH type means the organization has uncovered a new technology / product or service and it tries to find how to successfully use that to differentiate. PULL starts with customer need.
  • Innovation cannot be assigned to one pocket of the organization and hope pinned on it. IT has to permeate the entire organization. Yes, a specific office / roles / KPIs are a must to kick-start the process.
  • In order to assess the current innovation footprint of the organization, look at the following aspects:

o   Products & Services
o   Customer Insights used / experience given / engagement
o   Learning capabilities
o   Process
o   Value propositions / platform / capture

  • Look at the capabilities across the innovation management:
o   Ideation
o   Selection
o   Development
o   Commercialization
  • After the assessment, suitable action plan for creating or strengthening the innovation management system, across the enterprise, is to be formulated with specific KPIs to understand their progress and impact. The aspirations should be matched with capabilities.
Implementation

It is this area the most enterprises struggle. Focus on the following:
  • Leadership style of the CEO (doesn’t have to be fixed. Should be adaptable). You have to be an explorer at some point in time or a climber. Explorer doesn’t demand short term profit or growth. Climber builds on strengths never losing sight of the overall goal. There are various other styles.
  • Who is responsible for innovation? Never assign this to a few people and close your eyes. Your eventual goal, as CEO, is to embed this as part of DNA. You may still need to identify few people as the shakers or movers to give the required fillip.
  • Be clear on the KPIs – short / medium and long term. Different types of innovation with different time horizons call for suitable understanding. Let’s say, a CEO wants to open a new office in Antarctica. What should the centre be known for? Is it just another location diversification with no meaning? Are you prepared to give some time once you commit the resources? RoI / Profit can help in reinforcing and expanding the current business. But new business / innovation opportunities call for new metrics such as NPV based on prototyping, Strategic option value etc.
  • To get some incremental innovation, a major change to the structure and culture may not be essential. But, they are the very mechanisms that can teleport a company into the field of radical innovation.
  • The workforce learning culture needs to reflect the hunger for innovation. There are organizations that allow their employees to work on BAU as well as strategic initiatives. The latter would call for new skills to be provided for through training and prototyping.
  • If we take a look at the standard business maturity S curve (Emerge, Grow and Mature), it comes as a S curve. We start with a competitive advantage, utilize it to the full before it loses lustre and the margins start to diminish. The innovative organizations must start inventing a new S curve whilst riding high on the current one.

 
Business Growth & Innovation Curve



If your CEO is too busy and lives from one quarter to another but dishes out all the right terms, the market wants to hear, frequently with no genuine on-the-ground-movement, it is a sure sign of “Decline” setting in.

References: