This post looks at the blended innovation model within an enterprise – it expands on the previous post on A Start-up within an Enterprise
In a market segment/space, the portion that’s captured by an enterprise is its core. Outside this core is the new growth opportunity (the white space) that the enterprise has not (yet) captured; there can be additional enterprises in the same segment/space and over time the segment/space can increase and/or decrease – for the purpose of this post, we will assume that the segment/space stays the same.
For most (enterprise) organizations, the core is grown by the natural evolution of the products/services: as customers use the products/services their requests transform the roadmap. With (somewhat) uniform time and resources, focusing on everything all the customers ask for becomes a challenge and priority is given to the top tier customer base.
Most enterprises operate this way due to the low risk, as the needs have already been validated (due to customer demand). This type of innovation falls under evolutionary innovation.
For startups, the entire “new growth” opportunity becomes the initial target; as time goes on and effort is put into defining the product-market-fit a smaller “core” emerges. In many cases the (perceived) core might pivot several times (see below A -> B -> X) prior to eventually finding its eventual core (if it doesn’t completely fail by then).
The risk is much higher as customer validation still needs to happen, and significant time is spent in validation/product-market-fit. This type of innovation falls under revolutionary innovation.
When these two behaviors exist within their own respective entities (startup and enterprise) and are in the same space/segment they form a complementary relationship – which often results in the demise of the enterprise (unless the enterprise acquires the startup). The customers that are lower in priority for the enterprise move to the startup, either because the product is too feature rich, the needs are not met or they feel that the enterprise has become too big for them (low end disruption, See Clayton Christensen’s work on disruption). As they move out, the enterprise sees that as an opportunity to expand to the new (higher revenue) opportunity and move away from the lower end. As time goes on, the enterprise’s core continues to move outwards and the startup continues to encroach into the enterprises core until the enterprise has nothing left (eventually leading to the startup becoming its own enterprise).
The above describes the outcome when the two innovation modes are two different entities – but what if they were to be combined within an enterprise as a strategic initiative?
By making it a strategic initiative to combine both of these models within an enterprise to achieve a blended innovation engine; enterprises can greatly improve their competitive advantage and also accelerate their organic growth. With executive sponsorship, an additional dedicated team would need to be created (the MVIT).
A simple matrix can be put together to understand the differences between the core and the MVIT:
The interplay between the teams in a blended model is outlined below (to cover additional complexity a multi-core/multi-BU enterprise is used).
An enterprise that has multiple BU’s may cover different verticals in its “new growth” space; however, since each core operates in an evolutionary way, most do not cash in the opportunity to build organically within the shared (white) space.
There also needs to be some sort of “idea allocation engine” so that white space ideas (shared and non-shared among various BU’s), non-core customer requests and other exploratory ideas can be funneled into the appropriate team as there may be several ideas that seem “revolutionary”; but in-fact, they are actually more evolutionary in nature. The VCG (venture champion group) can help be the funnel to ensure that the MVIT is working on the appropriate opportunities (see:A Start-up within an Enterprise).
Once the idea generation and intake funnel is in place, the MVIT can begin piloting product for customer validation by releasing small pilots in the various spaces that iterate in functionality over time with customer involvement (as the viability becomes more obvious).
Developing the pilot in a common language/platform will help with the transition and once the pilot is ready, it would be supported by the MVIT. Should a pilot gain significant traction, the MVIT would continue to support it in a limited availability engagement and once a MVIT produced product enter limited availability, the BU should start planning for support, integration, release and productization under GA.
The integration/transition process from MVIT to Core will likely be significantly more involved than the other efforts.
Depending on the release and GA schedule, the Core will absorb the customer-validated pilot into the core – providing it a competitive advantage that was accelerated with the help of the MVIT that it would otherwise not have had.
A blended innovation model can greatly improve the competitive advance for an enterprise and also accelerate its organic growth. To successfully implement a blended innovation model it must be taken on as a strategic initiative, backed by executive sponsorship, have an additional dedicated team (MVIT), an idea allocation engine and a process for transition so that the investments in the blended model can be realized.
Coming into it, there were bits and pieces I had done over the years at various times/jobs and there was a lot of theory on how one would build a lean innovation lab within an enterprise to help accelerate innovation without negatively impacting the core enterprise model. This opportunity allowed me to put it all together and convert theory into practical experience.
Startups on the other hand, do not known how money will be made, what really is the value proposition, what the profit formula looks like; they must find product-market-fit before they run out of money.
Running a startup with a model that’s suited for enterprises will hinder disruption; running an enterprise with a model that’s suited for startups, will result in chaos.
- A dedicated “innovation” team that works outside the company’s core “processes” (a.k.a. red tape) does not exist
- You share or borrow resources from other teams who help out in addition to their core duties or have a “20% time” policy.
- A budget to spend on non-core R&D and other expenses was never factored in and/or approved.
- People expect the output from this “innovation” team to follow the same rate of return as your core product teams.
- You plan on engaging other (Architects, DevOps, Eng., etc.) core teams after all the work is done to come up with some sort of transition plan.
- No committed initial plan on what you will go after initially.
- No pass/fail metrics were setup.
- You do not have complete buy in from the top.
While all of the reasons above carry weight, if I had to pick one, it would be the first reason – the lack of a dedicated innovation team.
For most enterprises that have a part-time innovation team; all that innovation gets pushed aside when shit hits the fan – then its all-hands-on-deck – innovation, becomes an afterthought.
From a previous post: “It’s important for an enterprise to have a team that focuses on innovation as a “full-time strategic” activity and not as a “part-time ad-hoc” effort in order to have a greater chance of success with innovation – here is why: 75 % of venture-capital-backed start-ups fail; and 50% of backed start-ups make it to their 4th year. These startups, usually consist of dedicated entrepreneurial teams trying to build something, spending 100% of their energy, every minute of every hour trying to make it successful – they are in it full time. If a startup’s “full-time” innovation effort has such a low rate of success, what will be the success rate of a part-time effort?”
A dedicated team must be created if an enterprise wants to make innovation a strategic effort. If you have no one fully focused on innovation, you’ve decided not to focus on innovation.
For a week or so, my son has been failing, he constantly fails, every day, every hour but he is so adamant that he won’t give up; he tries and tries again – and fails for the unknown-th time (yes he has failed that much); He has spent majority of his life failing; almost all 11 months of it.
To him, it’s not failure, to him, he is learning how to walk, or eat, or talk.. just like his sister did, and my better half, myself and almost everyone I’ve known.
At any given point there are thousands of seminars going on about “Success” and how you can learn “how to succeed”; some will teach you how to be successful at flipping houses, investing, growing a business, setting up an eCommerce shop that takes a few hours per week where you can set your own hours and “like Bob, make $10,000 per month” with the disclaimer that these results are not typical….
….But what about failure? Who teaches you how to fail successfully?
While there are lessons to be learnt from others in being successful; these lessons are based on other people’s failures and what they learnt from them – they learnt to fail, successfully.
We are born with a “learn by trying” and “learn from failure” behavior but at some point many of us lose it because we are taught that failure is bad.
While “success” is the end-result or the goal that we wish to attain, we really should tell ourselves that “it’s okay to fail” (avoiding obvious failure paths and not self-inflicting intentional failure) and we should be trying to figure out how to fail successfully; “I failed, I’m now going to get up and try a different approach” – you have to be okay with failing.
Unless we try and push our limits and drive towards the point of “possible failure” we wont discover our potential.
In leadership, failing successfully is important as it tells your followers that you too are human; that its okay to be wrong, and that you learn from it; that its okay to try something different and experiment. I don’t have all the answers for my teams and I try various different things to find answers that work – I end up with a lot of failures before I end up with success.
You have failed successfully when you have failed, learnt from that failure and have gotten back up to try again.
In my pursuit of becoming a better leader I sometimes forget to look at my the lessons life has taught me much earlier on in life (as a child), its interactions with people that ask interesting questions that help dig out those lessons – this is one of those.
I grew up in Dubai – back then it wasn’t all the glitter and glamour it is today, things have changed dramatically. One thing that has not changed though, is the summer heat.
I am not sure what you may have heard, but Dubai has two seasons, “”hot” and “very hot”. So, growing up in Dubai and school being out over the summer heat pretty much meant that we were mostly indoors.
Being stuck at home gave us just a few options: watch TV (not much to watch), play games, read books. The games were fun for a while, but they were the same games, TV kinda sucked…. the only thing that changed, or was new was “reading books”. Junior school on-wards at the end of the school year, my parents would buy the books needed for next school year and being bored, we would study them over summer. This turned out to be a great thing to do because once the school year started, I was already familiar with the material, had already done the required readings and most of the homework – I could mess around in class and do what I wanted, and since it was no longer summer, I could go out and play after school – it was a lot of fun.
I was performing, my homework was done, I already knew everything and I could do whatever I wanted; there was no harm that I could have been doing by having fun…. right? well. I was wrong.
Eventually (think it was grade 9) a teacher called my parents in and together they explained to me that while it was great that I was on top of my game, my “fun” was becoming a distraction for others because the other students were unable to concentrate and get work done. Since the others had not already gone through the material, someone like me should be helping them get their homework done and leading by example rather than distracting them with fun alternatives.
We all have different motivations for pushing hard and getting things “done”, i.e. “I just want to push through he last few minutes of this workout and complete this 1000 meter row so that I can sit down and take a break”, or “I just want to finish coding this feature so that I can get back to learning about Node.js”, or “I just want to finish my work so that I can have fun..”… (who really wants to be rewarded for finishing early with more work?) working hard and having fun is great – there should be a healthy balance. Top players work hard and take a deserved break; However, most of us do not know or even think about how our actions may negatively impact others by creating distractions, or may impact ourselves and stop us from growing or delivering to our full potential; when the fun does negatively impact others/ourselves, it is important to recognize and address it. In the event that you do end up in a situation where someones “fun” is negatively impacting others, or themselves: do what my teacher did and have a conversation explaining the impacts. In my opinion (and experience), explaining the impact (of an observed issue) can make a world of a difference and often solves the issue.
At the end of the day, its the culture you build as a leader that dictates how people “have fun” and what work means to them.
At a meet-up earlier today I was asked “how can one make a team perform better”; I believe this question can be answered in many different ways and I would like to share my opinion(s):
Would you rather have a team that reluctantly does as you ask or would you rather have a team that does what you need it to do before you ask?
Culture has a large role in Leadership; in order to lead, you need to push a culture that people want to be a part of (follow).
There are several areas you can focus on and below are four (of many) things that I like to keep in mind when I am building “Culture”:
- Build and foster an environment that drives ideas bottom up as this increases engagement and hunger for solving challenges. The people on the front line(s) have valuable feedback that they want to communicate but do not know how – build communication and engagement.
- Actively recognize and reward, be humble, chose to publicly provide positive feedback and privately mentor with constructive criticism – build appreciation and mentorship
- Be as transparent as possible, over communicate, share road maps, expectations, perceptions, feedback, motivation – build trust
- Build and implement a collaborative environment, have people tie in with each other, be open, honest, humble, we spend majority our of day together and should want to be together – build a family
The focus should not be on “making a team perform better”, it should be on improving “culture” – Improve culture and your team will automatically perform, better.
Taking just these four points into account: when you focus and improve culture, your people will be more engaged, have trust in you, want to grow and have the desire to help others be successful around them (imagine the care bears); these type of teams happily give it all they got and even go above and beyond to ensure success.
People growth – Old blood vs New blood
I wrote my first post here on Jan 23 2011 and that post was titled “Startups – importance of your team“; Its been a little over 2 years since I wrote that post.
Most of us work 5 days a week, putting in about 8 or so hours a day (we will stick to the average/norm here). We come back home in the evening to spend anywhere from 1 to 4 hours with our family/friends.
When friends and/or acquaintances form a startup, the long hours and the close working relationship build on existing relationships and everyone at the startup works as a “family”; but what happens when there are no existing relationships? or what happens when you already have a family and someone new tries to come in? Wouldn’t it be awkward if you were out with your family/friends and a stranger joined your group and just hung out? would you be your self? most wouldn’t.
So how do you take an existing family (a started up culture) and add newer members to it? How do you mix the two so that you do not end up with friend circles?
I have 4 simple attitudes/behaviors that I build my base on:
“We are not that different”.
The new member see’s a whole new planet, different people, cultures, processes, jargon, etc. The first step should be to look for similarities between what they know and what they should know. For my teams I use a buddy system and its usually the previous newest member who buddies up with the new member. They go over materials, documenting anything new that might come up, go for lunch, talk about process, go through the who’s-who, engage the new person in conversations with the other team(s); they try to get to know this person as if they were dating each other.
“We got this, lets work on it together”.
How do you start work? where do you start? who do you ask? Scary questions for someone looking under the hood of something they do not understand. Here is where the buddy comes in again; during stand ups and sprint planning the buddy might offer “we can work on this together”, or someone else on the team might say “hey this is a good problem for me to show you how xyz works, and we can solve it”… they get the knowledge, they figure out how to start, they experience the process and they know how to close it. Build trust and accountability.
“Your team mentioned that you are catching on so quick, what can we improve?”
Over communicate reinforcement of team acceptance, ask for ideas on what can be improved, engage the new member; engaged employees have ideas and feedback that they want to share, things they have questions about.
“You are doing great, let me share my vision on how you play an important role to the team”
Setup a growth plan that’s challenging and communicate that it may be challenging and track to it. I like to plan for the 1, 3, 9, 12 and beyond and use data obtained directly or through peer feedback to gauge fit; if there is going to be tissue rejection, you need to act fast and figure out what you need to do to make it work successfully.
These 4 steps get you on track but you will still need to build additional on-boarding processes (around material and core knowledge ) that will grow the employees product knowledge. Its also important to keep your existing members in mind when you optimize culture as you want to grow the existing employees as well and not just the new ones.
At the end of the day it helps if we recognize that the teams we work with are more than just “Random people”; they are people we spend several hours with, they are friends, people we trust, can openly collaborate with and people we want to continue to work with.
When one finds a team they can work with for the rest of their life and can call family, its no longer “work”…it’s just a large friends & family gathering where they just happen to be working on something together and having fun.
We should all build and be part of such teams.