Flatspace: An Incubator for Innovation.
Author: Dennis Herremans
“In order to remain competitive in the digital millennium, you need an agile company that can quickly adapt to change and be sufficiently dynamic to possibly even lead this change.”
Easy, isn’t it?
Well, if you’re a small startup with only a handful of employees then it probably is. By the very nature of a startup, you don’t have a lot of hierarchical overhead or rigid processes (yet). But let’s be realistic: if you’re an existing company with hundreds or thousands of employees, then making the transition to an agile company becomes a lot less simple. Restructuring your company, your processes and the mindsets of your employees takes time, resources and knowledge that you might not have in abundance. The question is then: how do you initiate and accelerate this process without any detriment to your current operations? Is it even possible to prosper during this period?
Welcome to Flatspace…
What you need is to create an incubator for innovation - a special section within your company with one goal: to solve your (current and future) customer’s problems. This incubator should be staffed with diverse skillsets, from business and marketing experts who understand your market and your customers, to user experience experts and technical gurus. Once the right p eople are on board – a challenge in of itself - you should allow them to freely organize themselves. No hierarchies, bosses, projects or program scopes. Just a flat organization of highly motivated equals whom can find each other as needed and cooperate to form small, independent and self-organizing teams. Here at Ordina, we refer to this as a High-Performance Team (trust me, it works… See our offerings for more details).
Why does this work?
Well, we’ve established that large, rigid and hierarchical companies face difficulties in transitioning to an agile, dynamic organization. A possible solution is creating agile “startup-like” entities within the company. These High-Performance Teams will be the driving force for your innovation. We’ve also given them a single, clear directive (and a lot of freedom to execute it). To reiterate, their focus should be identifying and solving both past and future customer problems.
You don’t need huge teams and mega projects to innovate. You just need to find the right customer problem and solve it to get ahead of the competition. To illustrate with an example, nearly 15 years ago (around 2003) there was a small group of Harvard students who detected a simple “customer” problem: it was hard to keep in touch with former classmates. So they decided to solve that problem by creating a website where people could keep track of their friends and classmates. By now this household story has become well-known, though certainly not as much as the resulting website. It’s called Facebook and the resulting company is now one of the “Big 4” technology companies next to Amazon, Apple and Google. It didn’t require a huge team or a big company. A small, agile team of dedicated people focusing on the right problems was all that was needed.
Let’s look at a few examples closer to home…
When I’m away from home and I forgot to program the recording of my favorite television series, I can just take my smartphone and do it remotely (or I can even watch it live on my phone). All thanks to the Telenet Yelo Play app. When I get an invoice, I don’t have to run to the bank to transfer the money. I can just take out my smartphone and do my banking remotely. I can even speak to a bank employee, if needed. All thanks to the KBC Mobile app. All from the comfort from my own home. All at the time of my choosing. Given how busy our modern lives are this is a real benefit. These two applications identify a customer problem, boiled down to time efficiency and convenience, and create an elegant solution to resolve it, thus improving the customer experience.
As we’ve established in a previous post in this series, to get ahead of the competition, your organization must improve the customer experience. However, do not think that internal processes are out of scope for your High-Performance Teams. If you can streamline your supply chain, then you can get more products to your customers on time. If you increase efficiency, this opens the possibility of reducing costs thus lowering prices for your customers. If you can predict when a device, such as a train, generator or assembly robot will break down before it happens, then you can perform preemptive maintenance and avoid the problem – and the resulting negative impact that customers would have otherwise experienced.
Don’t be afraid of failure.
Let’s re-visit our mantra: You just need to find the right customer problem and solve it. Well, the “just” part might have been a bit overly-optimistic. The right customer-centric mindset will already get you a long way, although knowing which customer problems to solve and how to solve them is not trivial. Therefore your High-Performance Teams should experiment and not fear failure. With classic corporate projects failure is often not an option. This is because the projects take years to complete and cost millions. Within your innovation incubator things are totally different. Don’t be afraid to fail. If you have a good idea - implement it, test it, release it and see if it works. If it catches on, then great! If it doesn’t then drop the idea, reflect on why it hasn’t worked and move on to the next one. Be willing to fail, but fail quickly. Don’t endlessly try to fix something that isn’t working. Falling into a sunk cost fallacy won’t insure you against further losses. On the contrary, more often than not, this will actually deepen your valley of loss.
To illustrate, Google is an excellent example of this approach. Google+, Google Notebook, Google Helpouts, Google Glass, Picasa, Bump, BufferBox … All of these are innovations that Google tried, and which didn’t succeed. However, other ideas such as Gmail, Google Maps and Google Drive did work and are now an integral part of the success story of Google as an organization.
But won’t this cost a lot of money?
Let’s be honest. How much would such an innovation incubator add to the total yearly operational cost of your company? You can decide how many people you assign to the High-Performance Teams in your innovation incubator. You dictated investment decides and provides absolute control over the cost. Because of the fail fast philosophy, you’re not pumping money into a bottomless pit. Instead, an alternative thinking scenario can be put forward: How much resources will it cost your organization if your competitor has the next great idea and revolutionizes the market? How much is it worth to you to get ahead of the competition? This is something that you must decide based on your own organization’s goals and values. Do you value innovation?
Don’t focus on direct revenue generation, as such. Focus on improving the lives of your customers, solving their problems and giving them a better customer journey. Remember, a multi-billion dollar company like Google or Facebook can offer its core services for free by focusing on secondary revenue generation. Telenet doesn’t make you pay for using the Yelo Play app. KBC doesn’t charge extra for mobile banking. Don’t wait until it’s too late. Start your transition into an agile company now.
Implement your incubator for innovation now. We at Ordina have the skills, experience and dedication to be your strategic partner on this journey. So, give us a call…