Every Team Can Innovate – Driving a Culture of Innovation

Summary:  

In most organizations today, when we say innovation, people always point to a different team or another group within the organization.  There are innovation weeks, hackathons, etc., that organizations do in order to involve many parts of the organization.  Many of these ideas are often left as sticky notes on a wall and never make it to production.   The topics discussed here are not new but are often misunderstood. Most executives are hungry for new ideas flowing into the hands of customers. Especially in a post-COVID era where customers are buying in different ways, it’s more important now than ever.  

Design Thinking 

“A human-centered co-creation process focused on real end-user needs that yield the highest value to all stakeholders.” –  Stanford D School 

Stanford-dschool-Design-Thinking-Process-Schmarzo-2017.png

There are two parts to it: 

  1. A Process  
  2. A Mindset – A bias towards Action, Reframing, Mindfulness to the design thinking process, Radical Collaboration (by bringing together a cross functional team), and Curiosity (beginner’s mind) in understanding and solving a problem  

In most organizations, different groups do not talk directly to each other. For example, the Business, Product, IT, Marketing, Sales, etc., do not work as one team. So, the premise of design thinking is that we can unleash people’s creative potential by forming cross-functional teams that come together to solve an agreed-upon problem statement. Design thinking also allows organizations to jointly discover the right problem to work on.  

Design thinking does not have any answers to downstream issues like business architecture, tech platforms, channel strategy, pricing models, etc. 

Lean Startup 

The Lean Startup Principles  

http://theleanstartup.com/principles  

A framework for building Minimum-Value Products based on validated learning. The lean startup concept came from the startups built by Eric Ries in the Bay Area and was formalized in his book Lean Startup. 

Lean Startup is based on 5 key principles:  

  1. Validated learning 
  2. Entrepreneurs are everywhere  
  3. Entrepreneurship is management 
  4. Build Measure Learn loop 
  5. Innovation Accounting  

The goal is to create a few experiments, pick the riskiest assumptions first, build something, measure it, and decide to pivot or persevere. We don’t make any design assumptions and everything is driven by what we build and how the customers respond to it.  

When you pivot you are not going away completely from the vision of the product. But you are making a change to production definition, strategy, or in general, where the product is headed.  For example, you may shift from a test of mail catalog way of advertising to targeted ads to users using a digital platform.  

Unlike prototypes, MVP is intended to test the business hypothesis, not just the technical or design feasibility.  

The ideas can be built for MVP as the simplest possible validation/learning loop. Here are some examples:  

  1. Video – A video tells the story as if this was a real product.  
  2. Concierge Model—This is a full-service white glove service where there is no actual product when an order is placed. Real humans interact with the customer to understand their wants and needs.  
  3. Fake Door – Instead of putting it on the real product, a fake product or area is created.  This could be a landing page that shows a feature when none exists. https://medium.com/@tsharon/fake-doors-mvp-42242fd68b6f
  4. Wizard of Oz – Customers think they are interacting with the real product. E.g. This is how Echo was tested. When you asked Alexa a question, a developer from another room answered the question. 

 

Design Thinking Lean Startup
Assumes Extreme Uncertainty Y           Y
Assumes Customers don’t know what they want Y Y    
Rapid Build and Learning is the only way to build the right product Y Y
Startup Management Framework N Y
Ideation Framework Y Y
Has a MVP focus, and you look for a market fit N Y
Cross functional team Y N
Highly dependent on collaboration culture Y N

Innovation Accounting is the term used to learn how to scale a lean startup. It includes three learning milestones:  

  1. Set up a baseline with an MVP 
  2. Tune the engine in agile sprints to make things better (measure and see how products are mapping to the baseline) 
  3. Pivot or Persevere 

Agile Ways of Working:

Agile values and principles have been guided by the Agile Manifesto since 2001. Please see http://agilemanifesto.org for details. 

Design thinking works directly with the agile value of “we value customer collaboration over contract negotiation”. Lean Startup techniques promote an MVP concept or working product at all times. 

Even after nearly 20 years since agile thinking was introduced in organizations, many organizations still struggle to get agile right. It often becomes just another tool we are trying and often starts looking like Waterfall. 

There is a book called Culture Eats Strategy for Lunch. More than half of the organizations around the world fail to implement agile. The current flavor of Agile in organizations depends on the leader and the school of thought they were raised on. 

Design thinking similarly fails in organizations where the right cultural fit is absent. 

In organizations where Agile has been largely successful, they often followed what is now called “inside-out Agile.” 

Inside Out Agility

At its core, the key to delighting customers depends on the organization’s culture. To unleash our employees’ creative potential, we need to empower workers in a culture where making mistakes is not punished. 

Culture:

In the book ReEngineering Alternative, William Schnider describes four kinds of cultures.

four kinds of cultures

For Agile and Design Thinking to succeed, organizations must have a culture of collaboration and cultivation where “ We Succeed by working together.” We must create the right structure in the organization to create and sustain this culture. Then, we need everyone to believe in and follow the agile values and principles. 

After that, we can introduce practices like Scrum, Kanban, and XP and tools like Design Thinking and lean Startup techniques. 

Dual Track Agile

In many organizations,  the team working on discovering what problems to solve and the team doing innovation is different from the actual team building and maintaining the product. This creates two problems:

  1. Low Morale—Teams that are actually doing the work feel they are not allowed to be creative, so they keep doing the same kind of work. 
  2. Value Delivered Decreases – The time to fix true customer problems takes much longer. 

In this article, https://www.jpattonassociates.com/dual-track-development/ Jeff Patton, elaborates on what is now known as Dual Track Agile.

Imagine if we can get every team to spend a part of their sprints on discovery, ideation or prototyping activities. Often the teams that are closest to the customer are the ones who know the most about how to improve the product. 

Dual Track Agile

As shown in the picture above, if the product backlog has items that are meant for discovery, ideation, prototyping, along with regular product work, then each sprint the team will spend time doing both innovative work and product development work. 

dual-track-diagram

https://www.jpattonassociates.com/dual-track-development/

The picture above shows two loops: the discovery loop and the development loop. Both work streams are fed into the same team. A process like ScrumBan will work well here as we can do short iterations for discovery tasks along with scrum for production tasks. 

Defining Innovation

Innovation is any idea, improvement, new feature, or service that adds immediate value to the product. It is often confused with invention, which is a discovery.  

Innovation uses a creative mindset deeply rooted in truly understanding customers’ problems. While innovation is most related to disruption, it can also be micro or incremental innovation. Micro or incremental innovations are a lot easier to achieve. An example of disruptive innovation is Uber as a concept. 

When Uber came up with the idea, they were not trying to disrupt, they were just trying to fix a travel problem that came from the fact that when the founder traveled to Paris, it was tough to manage the cabs. That concept has now evolved into Uber. 

A micro innovation is when you send an email in gmail and if the word “attach” is in the email, then Google prompts you for the fact that you may have forgotten to add a doc. This feature later got implemented in all the email platforms and is now considered a normal feature. 

Innovation is a fairly structured process, and when implemented wrong ends up with hundreds of sticky notes hanging in conference rooms, and nothing gets done about them.

A four-step approach to Innovation that every team should consider: 

four-step approach to Innovation

Ideate:

Understand the customers’ problems and devise many ways to solve them. This is applicable when you have access to a group of customers or experts in the business domain. It happens in a matter of days.

Many ideas are killed in the room, but some make it to the next phase. Prototype.

Prototype:

This implies validating the idea with prototypes to get quick feedback. It need not be a fully blown product. It could be as simple as a Low-Fidelity Prototype, like a paper prototype. It could also be a Clickable Prototype if it’s an app created using tools like Invisionapp (as shown below) or similar tools.

Prototype

Conclusion 

It’s more important than ever to infuse true innovation into our products. To do this, we need to enable each team with capacity in their workflow to do innovative work as part of their regular process. Design Thinking and Lean Startup provide the necessary tools for every agile team to add incremental ideas to help improve the customer experience. 

More resources to read or watch:
  1. Fake door intro – https://medium.com/@tsharon/fake-doors-mvp-42242fd68b6f
  2. Wizard of Oz MVP – Read more at https://www.yarandin.com/en/wizard-of-oz-mvp
  3. Dual Track Development – https://www.jpattonassociates.com/dual-track-development/ 
  4. Different ways to prototype – https://medium.com/steveglaveski/12-types-of-prototypes-to-test-your-idea-36f6d076c8f5
  5. Design Sprints – A must-read that describes the Google ventures one-week design sprint process. The Sprint Book
  6. This book captures all the ideas that were used by Eric Ries in his startups and are widely accepted in the industry. Many points in the lean startup section in this write-up are based on this book. The lean startup eric ries
  7. Introduces the power of storytelling. A must-read for every product manager. Weekend-Language
  8. This book is the basis for inside out agile and the concept of the four kinds of cultures in organizations.
    The Reengineering Alternative

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