Mohan Sawhney - this is agile innovation

Kathryn Bice - AAP

4 minute read

Agile innovation is vital for surviving in a business world that is in a state of "permanent beta".

"Permanent beta is a state of restlessness and experimentation, something that is today inescapable," Professor Mohan Sawhney, Director of the Center for Research in Technology & Innovation at the Kellogg School of Management told the World Business Forum in Sydney on Thursday. 

He quoted Amazon's Jeff Bezos's point: 

"Customers are always wonderfully, beautifully dissatisfied."

Customer satisfaction is a matter of meeting expectations, but what Amazon aims for is "customer delight", which means giving customers something they didn't even realise they wanted, Prof Sawhney said.

The Agile innovation approach emerged from Silicon Valley about 20 years ago, but is now proving crucial in the broader corporate world, Prof Sawhney said.

Agile offers a way to "move faster, learn cheaper and collaborate better," he said.

This is key to survival in an environment shaped by "volatility, uncertainty, ambiguity and complexity", or what has become known in the US military as the "VUCA world".

Why aren't you innovating?

Prof Sawhney described the "old innovation paradigm" as slow, expensive and rigid.

The old paradigm, innovation is done in-house, the focus is on minimising the risk of failure. Under this system, intellectual property is proprietary and customers are passive recipients of innovaton. Organisations make "big bets on long projects."

By contrast, Agile moves away from the "big project" and sequential execution to iterative planning and testing with small, collaborative teams.

An organisation that wants to be an agile innovator needs to be "nimble, ambidextrous and collaborative", Prof Sawhney said. This entails a new approach to process, structure and people. 

Pillars of Agile Development

Amazon use the "two-pizza rule" - the team should not include any more people than can eat two pizzas.

1. Define priorities and themes

  • drive sales growth
  • increase customer passion
  • make it easy to do business with us
  • improve the competitiveness of our product
  • improve our attitudes to risk, culture and capability

2. Create a collaborative workspace

Encourage democracy in the workplace so that people feel comfortable walking up and speaking to someone, rather than sending an email.

3. Get ready

  • Don't try to do it overnight. Train people in agile. 
  • Create a Directly Responsible Person who "owns" the backlog of the project.
  • Appoint Executive Sponsors for each focus area.
  • Run marketing on a two-week agile cycle.
  • Create six scrum boards - one for each area of focus.

Why you aren't designed to grow

  • Opportunities are not aligned with organisational silos.
  • No incentives for cross-business unit collaboration
  • Lack of incentives for risk-taking and experimentation
  • Lack of talent mobility and talent hoarding
  • Lack of "homes" for disruptive growth initiatives
  • Fear of cannibalisation and disruption

Moving to Collaboration Innovation

Connected innovation is an externally focused approach that relies on harnessing the power of networks and communities to amplify innovation reach, accelerate innovation speed, and improve the quality of innovation outcomes.

Three possible sources of innovation

1. Crowdsourcing:

2. Innomediation: Use intermediaries because you don't know enough smart people and they don't know you. Consider Nine Sigma, Innocentive, an innovation market with more than 300,000 scientists and innovators available to work on problems. US Air Force Research

3. Scouting: You go and look directly for people who can help you with innovation, such as the BMW Startup Garage. The innovation management team select the 

How do we become agile? 

1. We change the way we work. We change the mentality by saying we are going to be collaborative, move fast and break things. If you move fast you break smaller things more frequently and it's not called failure, it's called learning.

2. Set up an opportunity-focused organisation, isolate ...integrate 

3. Collaborate. Move from the invention model to the connection model, move from "the lab is my world to the world is my lab".