Archive for the ‘Process’ Tag

Being a frugal innovator

Apple and Google recently created a buzz as they launched their latest phones with all sorts of new features.

Improved cameras, fingerprint sensors and gizmos to save battery life were among the offerings to win over the public.

Slick designs and major international product launches may make innovation seem like a sophisticated practice that’s easy for companies with big budgets and plenty of time, but what if you don’t have that luxury.
The reality is that some of the most successful innovators get significant results without outspending their rivals. For example, Procter & Gamble minimizes research and development (R&D) investment and time by getting product teams to tap into the creativity and problem-solving efforts of outside entrepreneurs, universities and start-ups.

Apple has launched some of the world’s most successful products despite spending less on R&D (as a percentage of revenues) than many of its competitors. And companies such as Amazon and Google have used quick, low-cost experiments to quickly gain consumer knowledge and to identify and scale winning ideas, while also to pulling the plug on white elephant projects.

Most companies need a practical approach to innovation that can be used regularly to get good results.

More than 15 years of client work and research has taught me there’s a middle way between ad hoc initiatives and building expensive innovation factories. We developed a system I call the Thrifty Innovation Engine (TIE), which offers companies an alternative approach.

It’s based on the view that innovation is simply fresh thinking that comes from inside or outside of the organization, combined with actions to create market results through higher revenue, or lower cost.

Here’s how the process worked for a software client. This firm’s approach to innovation veered from rushing emergency product upgrades for single clients to funding ‘new venture’ business units that looked well beyond a two-year planning horizon. Neither approach delivered the expected business results, but they did generate plenty of politics and expenses to boot. We helped the client implement a TIE – a 120 day innovation germination and commercialization process.

Phase 1 – 10 days

Assessment, priority-setting and getting a team together

This was vital, as management didn’t have a clear picture of spending, or accountability. A small team of product managers, programmers, financial analysts and marketers looked at ideas and bucketed them according to potential customer appeal, capabilities, financial returns and ease of commercialization. The team then chose five ideas for customer feedback.

Phase 2 – 20 days

Market validation

We introduced the five ideas to 16 strategic and prospective clients and four industry leaders through a series of sessions. Our goal was to find out how each idea met customer needs, what features were important and how emerging technological trends could be used. Two of the ideas generated significant customer interest and were placed in the commercialization pipeline.

Phase 3 – 75 days

Commercialization

A small and highly motivated group of programmers were dedicated to each idea, along with a budget and internal mandate. This wasn’t a sideline project starved for internal support. The core project group continued to be accountable and provide input but were told to use a minimalist touch. Low cost, speed and client consultation were guiding principles. For example, the team was encouraged to use lean methods such as open source tools. Each team also collaborated with the clients to minimize risk and assure market acceptance.

Phase 4 – 15 days

Final steps

The team reviewed the process and what they learned to fine tune the framework, which included committed resources, defined practices, metrics and knowledge management policies. A system was also set up to track the business results and customer feedback and to cycle these findings back into the TIE knowledge bank.

Developing an innovation engine like this won’t guarantee your firm becomes the next Apple or Google, however it can help your efforts become more productive and ensure your great ideas are market driven and not long shots.

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Iron Dome innovation lessons

The old ditty ‘when Mother Nature gives you lemons you make lemonade’ tells us a lot about about being creative, particularly when innovation is critical to your corporate strategy — and survival. In the current conflict between Israel and Hamas, the lemons in questions are the hundreds of rockets being fired into Israel on a daily basis. Israel’s ‘lemonade’ was the development of the Iron Dome anti-missile system, which has quickly become one of the most impressive weapon-defence systems of the past 20 years. What lessons can businesses glean from the development of this world-class technology?

The Iron Dome was developed by Israeli defence contractor Rafael Advanced Defense Systems. Its development from ideation to deployment took about seven years, hundreds of workers, dozens of suppliers and more than $200M in investment (much of it supplied by the U.S.). The Dome’s purpose is straightforward and exceedingly difficult; the system is designed to track and intercept incoming short-range missiles with its own missiles before the attacking missiles strike their targets. Missiles that would have hit an unpopulated area are ignored, in order not to waste munitions. To date, the system has been very successful, intercepting approximately of 90% of the threats it faces. Rafael is currently looking to sell the system to a variety of countries.

Aside from its military success, the Iron Dome is a model of innovation commercialization under tight constraints. Below are seven lessons gleaned from a variety of public sources. The quotes below are from project team members and were anonymously cited (for security reasons) in the Times of Israel newspaper.

1. Create urgency

Contributing to the protection of your nation can be motivating. However, Rafael’s leaders put wood behind the arrow by making the Dome a strategic priority. The project’s constraints — tight timelines, technical challenges, and cost limitations — were clearly articulated so there were no role misalignments or executional misunderstandings.

2. Assemble the best people

Having the right mix of capable people is vital. Rafeal’s management assembled a technical dream team. According to one engineer, “The best people in the field came together for this project.” Patriotism was not the only motivator: “Many engineers were inspired by the technological challenges and … fought to participate in the project.” As it turned out, much of the team was, through design or chance, made up of very curious and creative individuals able to sustain a high workload and quickly solve problems.

3. Optimize the team size

Given the constraints, management decided that using a “lean, mean” team of motivated experts was the right tack. The modestly sized core development team — numbering in the dozens — was much smaller than what you would typically see on major initiatives in bigger organizations. The payoff was faster project speed, less politicking and reduced management complexity.

4. Quickly evaluate issues

One pressing issue was how to collate and evaluate the numerous conceptual and technical ideas, and technology fixes. The team developed excellent screening tools to help analyze options and decide when to let go of an idea and move on. These methodologies avoided analysis paralysis, and accelerated the pace of experimentation and prototype development.

5. Experiment regularly

A culture of risk taking and continuous learning permeated the project team. Part of this culture involved running many experiments to test ideas and technology. Successful experiments were studied to distill technical shortcuts and share best practices. Failures were also systematically analyzed to avoid repetition. These practices minimized technical risk, avoided duplication and maximized speed.

6. Collaborate closely

The Iron Dome was developed in close collaboration with the users and other stakeholders to reflect real-world needs. One team member said, “Our relationship with the people in the field was unprecedented; this was essential for adapting the system to all the constraints in the field.” Given the need to quickly deploy the system, the Dome was designed with simplicity in mind so as to improve manufacturability and ease of transport.

7. Be entrepreneurial

For a prolonged period, the Iron Dome faced criticism from many circles — vested institutional interests, the media and military experts — around cost, potential effectiveness etc. The team used these concerns as a personal challenge, and to further refine their plans. According to one engineer, “Maybe we should thank the media, because when you read a cynical article, you say to yourself, ‘Let’s show them’ and you tackle the project, invigorated.” Another said, “In retrospect, it was the constraints, which seemed almost insurmountable, that led us to develop creative and successful solutions,” including engineering lower-cost parts from scratch and using components that were discovered in a toy car sold at Toys ‘R’ Us.

The development and effectiveness of the Iron Dome teaches companies that innovation success can be more about attitude, common sense and collaboration — the intangibles — than investment and size of R&D teams. Managers would be wise to consider these lessons.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Organizing for cloud computing

Many organizations we work with are diving head first into the latest IT game changer, cloud computing.  While a comprehensive technical and financial analysis is usually undertaken, few companies thoroughly consider the organizational implications of this strategic move. They do this at their own peril.  We have seen cloud computing implementations go astray when the wrong structures, processes and practices compromised the right technical solution.  Managers would be wise to consider whether their organizations are cloud-supportive before re-architecting their infrastructures.

In a traditional IT model, technicians, hardware and software are tied to specific geographies, departments and business units.  In most cases, this model fails to maximize operational flexibility and IT asset utilization.  A CC architecture, on the other hand, centralizes and virtualizes IT resources, making them available to all users when needed as needed. The result is greater operational agility, lower costs and higher IT scalability.  This fundamental change in the way IT is treated has major implications on a firm’s organizational system and culture.  For example, who controls virtualized IT resources and priorities in an ‘on demand’ environment? How do companies execute projects when assets and capabilities are decoupled from a physical location? And, what work practices are better suited for a more transactional and fluid CC environment? 

If they are to maximize the benefits of CC, business leaders must rethink how their enterprises are organized and run. Based on our consulting experience, we know the following areas are a good place to start:

Focus on tasks, not structure

CC’s rapid IT provisioning enables companies to be more flexible and agile, for example, in deploying new applications faster or responding quicker to market needs. However, many firms have rigid structures and processes that were developed in the era of static IT resourcing.  This traditional model is too limiting to effectively exploit the benefits of CC.  To be cloud-ready, managers should experiment with other organizational approaches that are more synergistic with the way CC works.   For example, an adaptive, SWOT-team structure and working style can more quickly respond to new priorities and deploy the resources and expertise needed to deliver on the business need.  The film industry is a good example of this kind of adaptive system; a wide variety of people and capabilities come together quickly at different points in the production process to execute on a creative concept and plan.  At completion, the people and resources go back to a central business unit or are dispersed onto other projects. 

Form follows function

In a traditional IT model, resources are usually structurally (if not mentally) “siloed” and linked to specific functions via non-standard workflows (i.e. processes)  Putting IT resources in the cloud decouples them from the constraints of a physical location, allowing them to be managed more centrally and deployed virtually.  As such, CC can help bring about the formation of a true Shared Service Organization, a structure that delivers key business benefits. For example, a capable SSO is essential to enabling the adaptive business system mentioned above – assuming good workflows are in place. However, Gary Tyreman, CEO of Univa, a leading supplier of Cloud Computing solutions, cautions that “to realize value, an organization must integrate its cloud-powered IT services into existing workflows.  Where those workflows are broken or non-existent, they need to be fixed and defined.”  Secondly, a SSO brings significant value including lower administrative costs, increased management control & standardization, and the possibility for greater organizational learning.  Finally, having a SSO allows IT managers to focus more on pushing the business forward as opposed to hoarding resources and building fiefdoms.

Collaboration breaks down barriers

The common business environment – hierarchical roles, non-standard processes, and department-based metrics – encourages employee practices that are ill-suited to the dynamic nature of CC. To best leverage the cloud’s capabilities, employees need to change how they work.  To begin with, the leadership must foster increased collaboration and alignment within the firm as well as with external vendors.  Examples of the changes required, include:  better aligning IT teams and vendors to overall business objectives (versus more parochial departmental goals); encouraging end-to-end project collaboration (versus point-in-process support); and placing greater importance on team and individual skills enhancement (to drive best practice adoption).  To make these changes stick, leaders will first need to get two things right in their management system.  One, project accountability should live with the business sponsor. Two, responsibility and authority must reside with the SSO leadership.

According to Tyreman, “For most companies, moving to the cloud is more an organizational challenge than a technical problem.”  Fully tapping CC’s potential will require enterprises to recast their structures, processes and management systems where appropriate. Though this may not be easy, it need not be scary. Companies that are open-minded, practical, and flexible will create the right organizational environment to fully leverage the Cloud.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.