Today, technology/product choices and development partners are everywhere. This, coupled with collaborative development tools, makes it possible to have a workforce worldwide. Or, you can Google your technical requirements, and probably find a handful of vendors that already built something close to what you want. So, how do you decide when to build or when to buy?

The answer should be simple, right? You do a cost/benefit analysis of buy vs. build, and you follow its recommendation. Yet, there are many variables that affect our decision, and some of these are myths that need to be recognized and dealt with appropriately.

Myth #1 — We have a fact-based decision making process

We like to believe our decisions are driven by logic and data. Yet, our emotions and instincts play into our decision making process more than we care to admit. Just think back to your personal experiences of buying a car. I remember walking out of a dealer because of the lack of chemistry and trust I felt towards the sales-person. This doesn’t mean you should ignore your intuition and your gut feelings. Quite the contrary, you need to incorporate that into the process and use it to further investigate areas that seem too good to be true.

Myth #2 — We can find exactly what we need

We live in a world where the choices are limitless, right? Unfortunately, the buying process is all about making compromises: price, scalability, maintainability, dependency, flexibility, control, support, functionality, time-to-market, availability, usability, integration, … Just look at iPhone customers and what drives them to unlock their phones regardless of the risk: instant messaging, GPS, voice recorder, eBook reader, cheap roaming, … These are all valid features that one would want on their smart phone. ☺

Myth #3 — Our organization’s culture is irrelevant to our decision making process

Quite the contrary! Your organization’s culture and your leadership is everything when it comes to build vs. buy decisions. NIH (Not Invented Here) syndrome is a classic influencer, which usually is followed by the we will loose control argument. Again, these all are valid concerns that need careful consideration. To be successful, you need to bring the team along, consider their concerns and put an action plan in place to deal with the risks. Oh the other hand, if your team is already feeling overwhelmed, asking them to take on another development effort will likely to backfire.

Myth #4 — Buying is not creative/innovative

This is another take on the Myth #3 and the organization’s culture. You need different strengths and competencies to be good at buying. Your customers expect you to deliver a unified solution that clearly solves their business problems. Your marketing team expects you to continue to deliver on your brand image. Your support team needs a supportable and maintainable product. So, obviously buying is more than just throwing things together and expecting them to work well, there is considerable effort involved.

Myth #5 — Building is cheaper than buying

After all, you are already paying for the engineering hours, right? But, what about the opportunity cost? Or, how about the peanut butter approach of spreading your resources too thin? We tend to think about building as a one-time event, without considering the cost of deployment, support, maintenance or scalability. In my experience, obsolescing anything is an emotional process that takes precious time. So, make sure you consider the full picture and not just the one-time engineering costs.

Myth #6 — We can build it faster/better than integrating

This may be a valid argument. But again, just because you can do something doesn’t mean you should. On the surface, the technology might seem straight forward, but have you considered all other vectors? I once had a discussion about whether or not it makes sense to build our own worldwide labor time tracking solution. Again, it was not just the technology, but the cost (and risk) of becoming an expert at understanding all government and labor policies around the world, which constantly changes.

Myth #7 — Buying is not strategic for us

Proponents of this myth perhaps did not hear about the fast-follower strategy. Fast followers recognize the challenges of entering into a new market and/or technology: unknown customer reactions, cost of educating the market, unforeseen technology glitches, … So, fast followers wait on the sidelines until the new market/technology is sufficiently mature before entry. By building and integrating on others’ technologies, fast followers can further compress their product lifecycle and get to market even faster. Later on, as the value drivers for the new market become clear, the fast follower can decide to re-implement previously bought technologies by building their own.

So, here is a quick summary of different factors to consider when making build vs. buy decisions.

• If your culture is not open to buying and you don’t have the leadership strength to manage the change, then this is a wrong time to buy. However, if the scope is limited, it could also be a precious learning process for your organization.
• Focus on your core value drivers: what really matters to your business and your customers. Make sure your effort and energy is spent in these areas.
• If the technology/product in question is not a strategic value to your customers or to your firm, ask yourself if it is worth developing the competency in-house.
• Time-to-market for extending into new markets and customer segments is an important competitive advantage. In this case, it might make sense to buy first and then build second.
• Consider if this product/technology is a one-time use, or a core building block for your product portfolio.
• Quick prototypes (using off-the-shelf technologies) are invaluable to firms for test-driving new ideas. This quickly (and with low cost) enables the firm to understanding potential risks, opportunities and customer behaviors.
• Consider how well the technology/product to be purchased would be integrated into your product line and to your value-chain (sales, customer support, marketing, …). You need to manage the complete value-chain to be successful.
• Though on the surface buying a technology might reduce your development risks, it might increase risks along another dimension, such as integration and dependency management. Make sure you build these into your plans.

Finally, with apologies to The Clash ☺

Should I build or should I buy now?
If I buy there will be trouble
An if I build it will be double
So come on and let me know
Should I build or should I buy?

Technorati Tags: buy vs. build decision factors, myths of make vs. buy, fast follower strategy

Today’s WSJ published an article on IBM and virtual teams: How Teams Can Work Well Together From Far Apart (you might need a subscription). By using their global team, IBM has been able to cut down the development time of WebSphere from 18-24 months to 4 months. Based on the article, here is what makes the team productive:

• Have a common understanding of the task
• Clarify roles and responsibilities
• Set firm ground rules
• Get to know other team members
• Communicate often

Aside from wikis and instant-messaging software, the team breaks down the deliverables into small, well-defined chunks (these tasks are shared with everyone, globally and around the clock.) This, combined with the discipline to continuously update the wikis, helps to keep the miscommunication down. They also highlight the importance of communicating (even if it means interrupting someone) and being open with ideas and information.

It is nice to see a truly virtual development team environment that is also successful. If you know of any others, please share.

Technorati Tags: virtual teams, WSJ.com

You might have read various customer reactions to Apple’s iPhone price and product line adjustments. Overall, I would bucketize the comments into 5 general categories:

• It is only a fad and you get what you deserve;
• I am extremely angry at Apple for doing this to me;
• They didn’t deliver any of the updated functionality they promised;
• You are an early adopter, you can’t complain about the price;
• Anything & everything else;

So, what does that mean about iPhone customers? Everett Rogers, early researcher on the topic of diffusion of innovations, highlighted the fact that not everyone adopts innovations at the same time or the same rate. In his book, Diffusion of Innovations, 5th Edition, he described the adoption process as a sociological activity where everyone proceeds at her own pace based on her perception of cost/benefit analysis and emotions. Rogers identified 5 categories of adopters, and he observed that if you look at the cumulative number of adopters over time they follow an S-shaped curve.

• Visionaries/innovators have a high level of risk tolerance and the ability to deal with uncertainty. They love new ideas, new technologies, and are willing to deal with setbacks, even if it will cost time and money. In this fashion, they are crucial to the innovation process as they bring new ideas and innovations into society and seed the diffusion process. The first 2.5% of the adopters.
• Early adopters (the next group) are looked upon by society as opinion leaders as they take more time to determine whether to invest or not. Their acceptance of new technologies and innovations increases others’ confidence, and as change agents they speed the diffusion process. Studies have shown that early adoption entails the ability to comprehend and handle complex and ill-defined technologies, and that these individuals tend to be well-educated and well-financed. They represent 13.5% of the category.
• Early majority follows the lead of the early adopters. They are cautions towards change and new ideas. However, once the early adopters’ experiences indicate success, they follow. They represent 34% of adopters.
• Late majority exhibits skepticism and caution, especially if there are unanswered questions about the innovation. However, they respond well to peer pressure and eventually adopt the new technology. They represent 34% of adopters.
• Laggards, as the word indicates, lag behind everyone in the adoption curve. So much so that by the time they adopt a technology, something newer has already been introduced. They represent the final 16% of adopters.

(In case you are wondering… I am an “early adopter” who is offset by a “laggard” hubby (self-proclaimed Luddite). In the end, it is a nice balance for our relationship.)

Apple is expected to have 10% of smartphone sales by the end of 2007, and just after a few months of release they reached their first million handset sales. Considering this, and reading through customer comments, I can’t help but wonder if I am looking at three generations of adopters mixed into one: inventors, early adapters and early majority.

It is evident that we live in a world where the development cycles are continuously shrinking and firms are looking to introduce new products at faster rates. Steve Jobs is pushing it further by readjusting iPhone’s price to be more competitive with the market. However, as our ancestors said, there is time and place for everything and nothing is without consequences.

Previously I looked at the innovation lifecycle and how one can define success goals for each phase in the model . Do you think acceleration of the adoption curve interferes with innovation’s natural progression, as the firm needs to manage the conflicting interests early in the technology’s lifecycle?

Technorati Tags: iPhone, diffusion of innovations, implications of increased adoption rate

The lack of white space management is one of the leading causes of project failures and delays, especially in siloed organizations. As frustrating as white space can be, its successful management and analysis can bring fruitful innovations and sustain competitive advantage to the firm.

So, what is white space? It is basically the gap, the fuzzy space and separation between what is known and understood. It is vague and ill-defined as to the ownership, the strategy, the process, the opportunity, … Yet, when it is analyzed and utilized well, it gives clarity, structure and emphasis to an opportunity or to a specific issue.

Our traditional project management processes are quite task oriented, where the focus is the successful execution of each individual task. No doubt you need to focus on execution. Unfortunately, constructing the forest one tree at a time works only if you have built the forest before and now working on an update. In this case, your main challenge is the hand off process, where your well-defined inputs/outputs and ownership, along with critical metrics will help reduce the size of your white space. If you are swimming in uncharted waters, you need to manage things differently and here are some ideas for your toolbox.

• Clearly understand what your customers value. In many cases, the cross-functional areas are in need of white space management, such as product installation, upgrades or 3rd party solution integration. Define the problem and key performance vectors from the perspective of the customer. Favor simple over complex and adopt the KISS principle as your motto.
• Setup a virtual war room to improve communication and coordination among teams. Make sure to include the updated versions of key project information, team member’s names/roles, competitive intelligence knowledge, project status, risks, milestones, … Leverage this to establish a sense of urgency that is shared by all.
• Use the staged-freeze process to group and manage critical tasks (Building a Project-Driven Enterprise: How to Slash Waste and Boost Profits Through Lean Project Management). As Ronald Mascitelli describes, this is very similar to building a house. You work with your builder to determine how best to schedule key decision points that support important building stages while accelerating work and reducing waste. After all, deciding to install in floor heating after the concrete floors are poured is an expensive proposition. You can extend this process to manage risk areas, resource constraints/schedules and key marketing events.
• Know, monitor and manage your critical path. These should be identified and regularly reviewed as the project progresses. Critical path is any activity that puts the complete project schedule at risk. Not only identify the risk, but also determine objective metrics to monitor their status.
• Utilize dedicated teams and task forces where possible. Many studies have already shown the impact of multitasking to productivity. If you can’t ensure dedicated teams, establish small task forces with clear charter, objectives, milestones, and metrics, where they are guaranteed to spend some of their time on these specific issues. Just remember not to go task force happy. It is contagious, and too much of a good thing can loose its value.

Remember, innovation is a system and new ideas come to fruition in the cracks: cross-functional areas, in between business units and products as well as shifts that occur within the value chain with partners and customers and market analysis. Middle managers play a crucial role as integrators and white space managers. This is especially true in siloed organizations where there is no one person that is assigned to managing the project end-to-end. Here are some of the characteristics of successful white space managers.

• They see their firm, partners and customers as part of the larger ecosystem. It is not about each individual group’s performance or ownership rights, but how the collective community operates together as a system.
• They recognize it is about the customer and creating that compelling customer experience. They continuously look for ways to go beyond traditional methods to create new value for the customer.
• They focus on the idea and the problem at hand and how it should best be handled as part of this system. They set performance goals that reflect the total system rather than separate parts.
• They recognize the glue that connects the dots is temporary, and look for ways to ensure the organization learns to self-sustain. This can be through coaching/mentoring, recommendation for structural changes and/or processes as well as influencing the organization’s culture and values.

Innovating in white space can represent quite a challenge for established firms. It is one thing to fund an idea, but another to push to full-scale implementation and commercialization while answering the strategic questions of who, what, where, how as Jeffrey Phillips points out. Here are key success factors to innovate in this space.

• Your innovation culture is key to success. It needs to have tolerance for risk-taking and failure, but also encourage experimentation, learning and recognition to challenge the status quo .
• Recognize that ideas need a platform for testing and validation. As a manager, not only support this process but also help ensure its success by providing the needed expertise, information and knowledge, ground cover during the attack, …
• Be creative and persistent as you look for ways to bootstrap resources. Focus on demonstrating value quickly while working with what you can gather up. Remember, it is about negotiations and making people realize they are getting more than giving.
• Engage your entire organization by “extracting resources from context to repurpose for core“, where core is your competitive differentiation (Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution). Include as part of your strategic planning processes the reapplication of critical resources to drive innovative projects.
• Ensure the support of a senior executive for your venture. This executive plays the role of a champion, sponsor, financial supporter, coach and mentor during your commercialization process.

In summary, in your projects remember to focus on both sides of the coin. Analyze and assess the opportunities embedded in the white space. Find those gems and polish them to improve your competitive standing. But, also don’t neglect the operational side of the white space. Focus on your execution to improve your efficiency, effectiveness and overall performance.

Technorati Tags: white space management, innovation management, middle managers, project management

What follows below is my interpretation and application of Werner Heisenberg’s uncertainty principle and Einstein’s relativity theory to innovation management. It is meant as a philosophical thought provoking reading, and I hope you will enjoy it. Afterwards, please share your thoughts with us. Of course, now that I asked for comments, I have already impacted your ideas and conclusions, but I won’t say how.

In extreme simple terms, the uncertainty principle states that it is impossible to determine exactly both the position and the velocity of a particle at the same moment: the more accurately you try to measure one, the less accurate the other becomes. This principle had profound impacts on how we view the world, as we now have a non-deterministic model for the universe. On top of that, just the aspect of observing in the present state could change future events! This interesting paradox has been contemplated by Erwin Schrödinger with his Schrödinger’s cat experiement: is the cat dead or alive? With all that and more, we know have quantum mechanics theory, where instead of a definite single prediction for a given event, we have a number of different possible outcomes and likelyhoods.

Einstein’s theory of relativity basically states that there is no absolute or universal time that all clocks would measure. Instead, each observer has his own measure of time, as illustrated in the twins paradox. Furthermore, Stephen Hawking showed that the time would come to an end inside a black hole, where no light can escape.

So, we are living in a universe where nothing is deterministic, where the even the thought of measuring will likely change the outcome that is being measured, and even then, everyone has their own measures… Not to mention, with an ever expending universe, everything will eventually collapse on itself and become a black hole. Conceptually, I can’t imagine anything better that describes the challenges of innovation management and offers suggestions for coping.

Is the cat dead or alive? Now, ask the same question of your innovation or your new product that is about to be launched. As attractive as it is to have a ‘yes/no’ answer, the more appropriate approach is to measure the probability of various key outcomes. Think about it, how many times has a project been canceled because it didn’t meet a revenue projection plan, or a certain market size, or competitive foothold in the market place before the product even made it through the doors? Just like a quantum state, which is a combination of position and velocity, our project’s factors and likelihood of its success is a representation of a project’s quantum state. It is a combination of various key variables, usually specific to the given project, with their own set of measurement challenges, as it is impossible to accurately measure one variable without impacting others.

So, as the uncertainty principle states, your innovation doesn’t have a definite path, but more likely follows a probability distribution. How you measure and capture its progress and likely outcome of your innovation, as well as where in the life cycle you do it will certainly implicate the path that your innovation follows. The point here is not that this is good or bad, but more how do you get to a repeatable success story, I mean, probability distribution? At its core, this is the essence of innovation management.

Well, this is where your culture comes in. By embedding the needed aspects of innovation management and related measurement systems into your culture, you no longer introduce a random element into the system due to an observer interfering with the experiment and creating unintended entanglement. Rather, the process and its measurement is now a natural part of the system. In other words, you no longer need to worry about the cat. Now, the cat feeds itself and cares for itself until such time when the cat’s time comes to an end naturally or via a black hole where the concept of time no longer applies.

This brings us to the theory of relativity, which unfortunately also holds true for the innovation process. From experience, each stakeholder in the innovation system tends to have their own idea of success, priorities and objectives. Again, this is not good or bad, but just a fact. Through a good communication and an alignment process, it is quite possible to establish an agreed upon definitions for success, priorities and objectives. However, while this will hold true for a given point in time, it requires ongoing realignment in order to stay aligned.

Things do come to an end, eventually. Even for super products and innovations, where the product no longer generates necessary revenue to balance the force of its cost of maintenance. In the case of stars, they continue to shrink under pressure eventually becoming black holes, where light doesn’t escape and the concept of time no longer applies. Again, how is this different from products that are well past their useful life and should have been discontinued long ago? Where creativity, talent and other useful assets of the firm are shrinking away without any reasonable probability for creating a big bang? Yes, things do and should come to an end, eventually.

There is much we can learn and apply from theories that surround us. As I relearned recently, the more things change, the more they stay the same. Remember, early on I asked for comments. But, now that I asked, the probability of you actually doing that is next to nill. So, why don’t you surprise me anyhow.

Technorati Tags: innovation management, uncertainty principle, theory of relativity, Einstein, Heisenberg, Schrödinger, quantum mechanics

There are many things to consider during your innovation journey: insights into your customer and markets, good understanding of your ecosystem and its complex interactions, being comfortable with uncertainty, your culture and its dynamics, focusing on concrete milestones while managing to a long-term vision, and even a bit of luck.

Peter Drucker has boiled down the essence of the innovation process into the following three necessary conditions: innovation is work, innovation is built on strengths and innovation is an effect in economy and society.

Innovation is work

“There is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new system.”
- Niccolo Machiavelli, The Prince

Drucker indicates that innovation is work; it is hard, focused, and purposeful and makes great demands on diligence, on persistence, on commitment and requires resilience. Winston Churchill made the statement “To improve is to change; to be perfect is to change often.”

It is important to remember that innovation is not a linear process, but an iterative one. You learn by doing, where you discover market and technology unknowns and make course corrections on the fly. No wonder the traditional business planning falls flat in the face of the innovation process. Instead you need to utilize planning tools that are more appropriate, such as the assumption based planning processes.

Innovators must build on their strengths

Drucker also points out that innovators must build on their strengths, that innovators look at opportunities over a wide range, but evaluate these opportunities on the merits of their fit with the innovator herself, and with the organization.

Hamel and Prahalad define core competency as something that a firm can do well, such as technical know-how, specific processes, design skills, innovative culture, or relationships with customers and suppliers. However, more specifically, a core competency needs to meet the following conditions:

• Has a direct customer benefit, such as lower cost, key feature/functionality, …;
• Is difficult for competitors to imitate, thereby providing key differentiation;
• Has the ability to leverage and utilize the competency in other parts of the firm, including products, technologies and/or markets;

Jeffrey Phillips of Innovate on Purpose shares a key observation: “consider your core competencies when you generate and consider ideas, but don’t define them too narrowly or you’ll likely miss a great opportunity - one that exists at the intersection of your capabilities and anothers.”

My experience and past interviews in large organizations have shown that opportunities that are adjacent to the organization’s existing competencies help increase the innovation’s success rate. Along the same lines, there is a higher degree of failure on projects that did not have synergistic fit with the organizations’ strategy or existing workforce competencies.

Building new competencies in an area is a valid reason for pursuing a new innovation. M&As are often used to close a competency gap, and to acquire new ones. However, about two-third of M&As fails. At the same time, the innovation process requires constant vamping of your core competencies and exploiting them in unique and creative ways. So, not only do you need to build on your strengths, but also you do need to have the competency to further grow your strengths.

Innovation is an effect in economy and society

Finally, Drucker indicates that the innovation is an effect in economy and society; it is a change in behavior of customers, in how they work and produce something. As such, he points out that the innovation always has to be close to the market, focused on the market, and be market-driven.

Yet, market adoption and acceptance is a complex process where one rarely has the power to control. No wonder resilience is highlighted as an essential strength for the innovators. Innovators use their experiences and skills for solving problems, where their background and interest define their innovation’s target focus. However, the real work starts with the answers and insights they gather through this experimentation.

With that, we came full circle – innovation is work, it is built on strengths where strengths continuously need to evolve, and it is an effect in economy and society, where its adoption requires even more work and new competencies for it to be successful.

Technorati Tags: innovation process, core competency

I previously wrote how creativity, invention and knowledge are the key ingredients for innovation. Innovation thrives in environments that nurture new ideas, creativity and sharing as it is built on existing ideas, knowledge and inventions. As a system, innovation is collaborative, multidisciplinary and requires diverging viewpoints and experiences. It is also inclusive, and it is about bridging and extending linkages and interactions to build something that is greater than its parts.

On the other hand, organizational silos are barriers to innovation. As the name represents, they are highly-vertical, where the communication and collaboration outside of the organization is at best minimal. It seems, as a business matures, it becomes impossible to avoid becoming a victim of a silo mentality. This is mainly due to the nature of business and people: the essence of success strives to keep order and maintain the status-quo that created it in the first place. With that, it is a challenge and a requirement for businesses to reinvent themselves, as recently demonstrated by the Yahoo Memo: The ‘Peanut Butter Manifesto.

Organizational silos come in different shapes and sizes. Some are obvious as they bring out the worst in people: us vs. them attitude, playing schedule chicken, finger pointing, CYA (cover your a**) syndrome, political turf fighting, and power struggles are all common examples where the situation eventually leads to attrition of good people. Hopefully this does not describe your current workplace, however you have probably experienced some of the other types of organizational silos.

• Geographical silos — Globalization increases the urgency to break down geographical silos. Lack of customer information and understanding, disconnected systems, and inconsistent hand-offs between teams in different geographical locations often result in missed opportunities, unhappy customers and waste as everything gets duplicated at all locations.
• Functional silos — These tend to surface between departments where the authority rests with the functional managers, such as marketing, sales, R&D, etc. Although R&D and Marketing collaboration problems are frequently noted, you can experience silos forming within the same department where there are differing types of functional responsibilities. The QA team feeling like a 2nd class citizen compared to developers, or the usability team not feeling listened to are common complaints.
• Organizational silos — Organizational silos usually occur between business units. As a customer, we are the ultimate losers and we feel the impacts of the firm’s disfunction the most. Usually in the form of products that lack interoperability, different customer experiences, purchasing processes, usability, … Basically a lack of company brand.
• Project silos — Lack of best-practice sharing and the inexistence of organizational level project management processes and standards result in project silos. On the surface this might seem innocent, yet it results in inaccurate and inconsistent project status reports with major challenges for implementing an effective portfolio management process, not to mention lack of quality, usability and delayed project releases due to difficulty of managing resources and budgets between projects. This is why there is an increase in PMO (Project Management Office) creation and centralization of project management activities.
• Technology silos — Usually driven by NIH (not invented here) syndrome, needless technology silos result in interoperability issues between products from the same organization, wasted development and testing efforts, increased development costs and increased time to market.

In summary, organizational silos are bad for innovation, bad for the organization and bad for the firm. Fortunately, the symptoms of the illness caused by organizational silos are pretty obvious. So, you know you have a silo problem when:

• You cannot share knowledge or information for developing new ideas or resolving problems;
• You are sure that any information about your firm’s customers, markets or competitors is classified as top secret;
• You gave up on any hope of leveraging and building on your firm’s existing assets, such as IT infrastructure, manufacturing, operations for new ideas and products;
• For every forward step you take, you seem to take 2 steps back and you see its impact in decelerated cycle time of new product introductions;
• You have a culture that values personal expertise and knowledge creation over teamwork;
• Deja vu is your middle name. You feel like you are stuck in the twilight zone, wondering why the history repeats itself, and if you will ever escape;
• You are stuck with bureaucracy and endless pointless meetings even over simple problems, and you are certain that having a root canal would be less painful than this;
• You are stuck in a cycle of incremental improvements and about to suffocate as you are trapped in the confines of the capabilities of your organization;
• Everyone seems to completely lack awareness of who does what in the organization, resulting in duplication of efforts and more needless waste;
• You are convinced they were thinking of your organization when they defined brain drain;

Silos are generally the result of organizational structures, senior-management priorities and values, and the culture that is created through the existing reward system. Using a 5-prong approach, you can break through the silo mentality and bring down the walls.

Emphasise the appropriate values

Trust, respect, honesty, communication and collaboration are the needed values to build your organizational culture around. As you shift from top-down driven organizational dynamics, you need to promote values that will enhance your organizations communication and collaboration capability and enable your teams to resolve conflict and improve their decision making capability at their level.

Build a culture of collaboration

Cultural changes need to start at the top: leaders will need to consistently and constantly communicate and demonstrate the importance of sharing, leveraging and collaborating across the organizational silos. Certainly the reward system can kick start the needed transformation by focusing on making collaborative performance objectives part of the employee review process. Recognition of people who work across the organizational boundaries will also reduce the emphasis on individual achievement, and shift the focus to collaboration.

However, building a culture of collaboration is more than just encouraging better communication and sharing. It is focused on creating value by effectively and efficiently utilizing the available assets (knowledge, people, tools, …) and bridging the gaps regardless of job title, functional expertise or organizational belonging. This requires not only a sense of shared purpose, but also a greater understanding of how everyone contributes to the organization’s success. To create that understanding, invest in job rotations and international assignments, utilize cross-functional teams and invite others from different areas to your meetings.

Rally around a shared purpose

Rather than top-down direction setting, build a sense of shared vision and purpose, personal accountability and empowerment throughout the organization. Shared purpose allows everyone to connect to an idea that is bigger than them, and allows them to see how their day-to-day activities contribute to the bigger goal.

To further the cause, bring systems thinking to your organization by integrating your departments, and building in collaboration by utilizing cross-functional teams, ignoring org charts and focusing on innovation and customers. With that, increase the transparency in your organization, openly communicate decisions, priorities, financial challenges, competitive pressures, and strategic initiatives to all.

Make it easy to connect and share

Lets face it, developers are not the most outgoing kind, but they are curious and usually hungry. And, there are ample opportunities to connect and share. So, look at ways to bring people together in your firm through idea exchange days, open house days, best practices exchanges, internal seminars, brown bag discussions. But don’t stop there, find ways to extend your collaboration network outside of your firm by bringing speakers and scientists, tap into your customers and suppliers.

Also, utilize collaboration technology and social networks to connect your project members, experts, hobbyists, early adopters and visionaries. Make these tools and communities work for you.

Focus on the important stuff and measure accordingly

As I mentioned before, what gets measured gets done. So, focus on the important stuff like your customers and innovation. This further encourages cross-pollination of ideas and collaboration. Furthermore, set aggressive goals that require collaboration, such as the case with P&G where they expect 50% of the company’s new products to come from outside the P&G labs. This requires building a network of outside innovators, scientists, customers and suppliers to tap into new ideas and develop new products.

Also revisit your brand identity and make sure it emphasizes working-togetherness and having one-voice. The standardization of your brand image will not only improve your relationship with your customers, but will further promote a sense of one company, one organization and one team.

There is a right time for everything, including building silos

Though silos are bad, there are times when you do need them, but more clearly what they represent: an enclosed structure and/or a protective shelter.

• Prevent technology and idea contamination in situations where your competitor also becomes your partner. This is more common than you may think, especially in large organizations. It is crucial to limit interaction between your product development teams and teams that are working closely with your competitor to avoid any potential contaminations and lawsuits. It is also a good business behavior.
• Cultivating a new business within a mature organization requires tender care and protection from the big corporate mentality and culture.
• M&A process highlights the tension between staying in full compliance with government rules governing mergers and acquisitions, yet accelerating the integration process as the M&A finalizes. Utilizing the clean room concept, you can gather and analyze sensitive information from both companies, and in turn support the merger teams and accelerate the integration process.

These are certainly valid cases for building a silo and limiting communication to the outside world. However, in your organization, it is still important to maintain an awareness of why, what and how-long this silo will last. Basically, be transparent within a reason.

Technorati Tags: organizational silos, barriers to innovation, collaboration, silos, break through the silo, building a silo

I’m always amazed to hear what kids pick up from conversations, TV shows, books, friends, … Recently I heard my 9-year-old tell his friend that the Nintendo Wii has “bad graphics”, but he doesn’t care as he enjoys the games. Turns out he was repeating what he heard during a game console comparison on Cartoon Network. The source of this propaganda is irrelevant, but it gives us an opportunity to discuss the characteristics of disruptive innovations.

Clayton Christensen first defined the concept of disruptive technologies in his book The Innovator’s Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials). The concepts that he described have become the reference work on disruptive technologies, particularly for large and established firms. Christensen defined disruptive products as follows.

First, disruptive products are simpler and cheaper; they generally promise lower margins, not greater profits. Second, disruptive technologies typically are first commercialized in emerging or insignificant markets. And third, leading firms’ most profitable customers generally don’t want, and indeed initially can’t use, products based on disruptive technologies.

I am a fan of James Burke’s PBS TV series Connections (Connections 1, Connections 2 DVD Set, Connections, Vol. 3). In his shows, he explains disruptions occurring from coincidental inventions, changes in regulations and society, exploding demand for new products as well as growth in complementary technologies created through strange connections. With that broader context, it is possible to further define disruptive technologies and products as follows.

• They create new markets and customer segments that previously did not exist or were thought unattainable;
• They initially target underserved customers;
• They are perceived as inferior by existing mainstream customers;
• They attract early adopters and create loyal followers as they offer new performance vectors previously unmet;
• They reduce complexity and are simpler in design and easier to use;
• They specifically target breakthrough improvement in a new performance vector;
• They can require a new business model or distribution method;

Nintendo’s focus has been continuous improvement of customer experience through innovative products, such as the release of Nintendogs that enabled gamers to train virtual puppies. They also made it to the Forbes‘ list of The Top 10 Disrupters Of 2006. With the introduction of Nintendo Wii, they have seriously impacted the status quo of console videogaming especially from the perspective of how, who and why:

• how we interact with the virtual world of gaming;
• who plays with these games;
• why we play them;

With that, Wii certainly had a disruptive impact on the society and its ecosystem, which not only enabled Nintendo to change the way it competes, but also enable revenue growth through new high-value customers that was previously not attainable. It is important to note that even the name Wii was chosen to bring a sense of inclusiveness and togetherness.

Many hard-core mainstream customers might disagree that we reached a point of diminishing returns in graphics. As Sony and Microsoft concentrate on more graphics power and beefier consoles, Nintendo is focusing on changing the rules of the game by coloring outside the lines. With the motion-sensing controller, they are redefining how we interact with video games where the players take a very active part in the game, and burning calories in the process. I was personally surprised to see how entertaining Mario Party 8 is for both the players and the spectators. As the games are more interactive, parents are more willing to let their kids play the video games, and also more likely to play along.

With more graphics power and beefier consoles, Sony and Microsoft are leading the pack with more realistic graphics which are also more complex in nature. For me it is a challenge to remember all the push buttons and movements on a controller. However, Nintendo Wii’s motion-sensing controller broke down barriers by removing complexity in playing games. It made real life games, such as tennis, boxing, baseball, more fun and simple to play, thereby entering into a market, ages over 35, that was not accessible to the videogaming industry previously. Today, it is not unheard of for grandparents to buy a Wii system for themselves after playing with their grand kids.

Nintendo Wii is also opening up doors to new uses beyond gaming. Glenrose Rehabilitation hospital in Canada is using the consoles to help patients with movement and balance issues. Wii Big Brain Academy enabling all ages to participate and keep brain sharp, but also connect with WiiConnect24 to network and measure how they are doing against other kids. The educational and health-care arena is a new market previously untapped by the videogaming industry.

Nintendo has proven the validity of motion-sensing and control technology. With that, we’ll see rise of new markets and industries utilizing the motion-sensing technology, where it will be embedded into everyday technology from cell phones, TV remote controls, computers, cars …

So, when is it important for you to look for disruption in your product lines and technologies?

• Your definition of competition has been to match competitors functionality and feature set. You feel like you are fighting them in their battlefield and not making any headway towards the hill. So, it is time to look for a new hill with your own rules.
• Your mainstream customers are more interested in price than feature set or functionality. They are starting to highlight good-enough products that are cheaper from your competitors.
• You are praying for a miracle and your growth is mainly driven through mergers and acquisitions.
• You are noticing and dismissing new entrants that are penetrating your market through your under-served customers.
• You lost touch with your lead users and have been stuck in a never ending cycle of continuos improvement.
• Your market is shrinking, yet there is clearly untapped markets and customers to be reached.

Ultimately the powerful disruptive innovations are about the people. It is not as much about the impact they may have on industries or markets, but how they transform our lives. Just think back to the introduction of glucose meters and how they improved the lives of diabetics, or iPod/iTunes on how we listen to our music, or blogging technology and YouTube on enabling anyone to become the content creator and publisher, or Internet enabling globalization. Anyone, any where, any age, any skill-level now have access to the products and technologies, inexpensively, easily without dealing with the previous complexity.

There is obviously more to disruptive technologies than what we just discussed. Though the risks are high and the immediate return on investment is not obvious, with well planned technology/product management, clear focus on customer and good timing the results can be spectacular.

Technorati Tags: Clayton Christensen, James Burke, disruptive technologies, Nintendo Wii, disruptive innovations

The Wall Street Journal recently had an article on “Working Together… When Apart: As employees scatter around the globe, virtual teamwork has become crucial. Here are 10 rules for making it work” by Lynda Gratton (June 16-17, 2007). You can access the article on WSJ.com or Business Insight section of MITSloan Management Review.

After managing a large team of globally distributed developers, I also came up with my rules for making virtual teams work. So, if you have to play the hand that is already dealt, here are my rules for building high-performance virtual teams.

1. Align organizational values to support virtual teams — Just do it! might be a great slogan for encouraging employees to act, but not as effective when the goal is to improve teamwork and communication between your dispersed teams, especially at the early stages of team forming and storming (reference: Tuckman Model of Team Development). Along the same lines, e-mail might be your preferred mode of communication, but it can also be a challange for teams where English is their second language. You’ll be suprised to see how a simple phone call can improve team productivity, communication and morale.
2. Think local, act global — Not everyone can work productively in isolation, i.e. limited face-to-face contact, work is done mainly through e-mail, IM and some phone conferences. So, where possible look for ways to establish a small team working together at a given location. It will improve trust, build a sense of commitment and support the feeling of being part of a larger team. Also, support diversity by encouraging each of your locations to have their own culture. However, make sure they all share your common organizational values.
3. Practice transparency and objectivity — This is a good rule to follow regardless, but even more important if you are managing a virtual team. Remember, someone’s perception becomes another’s reality. Transparency enables interested parties to understand what and why, while objectivity brings facts, diverse perspectives and sense of fairness into the discussion.
4. Agree and enforce team processes — The last thing you need is an unexpected check-in right before a major build and release cycle. Make sure your team understand and follows the agreed upon procedures and tools.
5. Promote leaders with good facilitation skills — When bringing diverse teams and experiences into a new project, it helps to have a good facilitator that has everyone’s trust and respect. See my previous post on characteristics of a good facilitator.
6. Risk manage your project — Vacations, sick days, and unexpected issues are inevitable. However, these emergencies are ever more heightened when dealing with differences in time zones and communication gaps. With that, risk manage your project by identifying and assigning backup individuals to risky areas, or dividing up the work among different sites.
7. Rotate meeting times and locations — Working across different time zones and locations is disruptive to personal life. So, share the load by rotating meeting times and face-to-face meeting locations.
8. Mandate a day of silence — Although it is great to have a team that can virtually work 24×6, and maybe even 24×7, the overhead associated with working in a virtual environment can be wearying. So, depending on the intensity of the interactions, declare a day, such as every virtual Friday, as a quiet day. This will give everyone a break, and allow people to recharge their batteries.

So, what works for you?

Technorati Tags: Working Together… When Apart, virtual teams, building high-performance virtual teams

This is the continuation of my previous blogs on roadmapping:

• Roadmaps and Roadmapping: What and Why
• Successful Product-Technology Roadmapping
• How To Manage The Initiation Phase For Successful Product-Technology Roadmapping
• Get Down To Business: Developing Your Product-Technology Roadmap

Once the roadmap is developed, the next step in the process is its communication and implementation. If you thought the hard work is behind you, think again. This phase can be one of the most challenging activities for an organization, especially if the recommendations require complex cultural and leadership changes.

Conversant has defined a conversational model which they referred to as the cycle of value. The cycle of value promotes establishing a shared purpose, ownership, accountability and building a foundation for learning and improving. This model also fits well with the steps required for a successful dissemination of our roadmap.

The cycle of value has 3 distinct phases:

• Align — conversations are focused on building a shared purpose and understanding;
• Act — conversations are centered for successful launch of initiatives and clarification of accountabilities;
• Adjust — conversations are all about reviewing results, learning and improving;

Lets examine these phases from the perspective of disseminating our roadmap. You can read more about the cycle of value and other conversational tools in the Communication Catalyst: the Fast (But Not Stupid) Track to Value for Customers, Investors, and Employees by Mickey Connolly and Richard Rianoshek.

Align

The goal of this phase is to create a shared purpose and vision for our roadmap: know-why, know-what, know-how and know-when. With that, it not only requires communication of the roadmap, but also the validation and critiquing by all stakeholders. The communication methodology should enrich the roadmap by enabling collection and processing of the insights gathered during discussions. In addition, this phase should also include:

• Evaluation of risk vs. return;
• Deciding among the alternative strategies;
• Agreement on the prioritization of activities and projects;
• Plan for change;

Act

Once the alignment is achieved, next step is to put in motion the needed projects and activities as agreed by the roadmap. This includes:

• Initiation of relevant projects and partnerships;
• Commitment of resources and budget;
• Agreement on the performance measures, targets and key milestones;
• Announcement of clear owners and accountabilities;

Adjust

The value of your roadmap is directly correlated to whether its information is kept current and up to date. However, keeping the roadmapping process alive is one of the challenges that an organization faces. As such, investigate ways to incorporate your roadmap review/update process to your business strategic planning or budgeting cycles. Also, identify clear owners, frequencies and method of review/update cycle that will be used for keeping your roadmap current.

Adjust phase should include concise summary of accomplishments, challenges/disappointments, new insights, changes in the competitive landscape as well as the review/status of the critical success factors for successful roadmap implementation that were previously identified. Based on the review, any needed updates to the roadmap should be initiated and followed with dissemination of the roadmap as discussed. Below is the visual summary of the roadmapping process steps I have laid out: initiation, development and dissemination.

Technorati Tags: roadmapping, product-technology-roadmapping, roadmap, cycle of value