Blue Ocean for your innovation commitment

speech_bubble_reviews_noBackground philmckinney.comIn ‘Become the innovator you are‘, in order to craft a bespoke innovation organization, we reviewed some emblematic companies famous for their innovation identities:3M, Ideo, Google, Decathlon, Gore.

New comers show tremendous initiatives: Spotify, Flavi, Netflix, Valve have successfully implemented flexible empowering organizations, and humanistic culture values that are worth sharing. They shine like a glaring opportunity with regards to common innovation management.

  • Spotify peculiar governance was put in place to scale the Agile methodology Spotify uses for product development. Business structure is divided into small autonomous unit called squad, based on the ‘feature team‘ pattern, and feeling like a mini-startup. Related squads are grouped into tribes, behaving as “incubators”. For sharing knowledge and creating common tools, Spotify runs chapters (similar skills within a tribe) and guilds (community of interest across tribes) as “the glue that keeps the company together, and raises economies of scale.”

  • Favi is a French small industrial business that entirely reinvented its organization bottom-up 30 years ago: ‘Favi, the factory that runs without bosses’. Activity has been divided in 15 small factories of 10 to 40 people: each unit co-opt leaders to handle work flow and investment. A unit doesn’t work for a boss, or a reporting, it is fully customer-oriented. Units stand together to absorb peak loads. Some hints illustrate their outside-the-norm way of doing things: “a company eager to unleash the potential of its employees must cut into anxillary support functions. There is no productivity without happiness, and happiness involves doing things which have meaning.”

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  • Freedom and responsibility are paramount in Netflix culture, and unfold in powerful and simple management guidelines: “A responsible person is someone who doesn’t wait to be told what to do, picks up the trash, and behaves like an owner. To avoid being a process-driven company while growing, we want to manage with ever more high performance people, not with rules, we want to increase talent density, attracting high value people through freedom, to make impact; one outstanding employee gets more done and costs less than two adequate employees; it involves managing through context: high performance people will do better work if they understand context. Responsible people thrive on freedom, and are worthy of freedom, we try to get rid of rules when we can: there is no vacation policy or tracking, and policies for expensing, entertainment, gifts & travel come to “Act in Netflix’s Best Interests”. Flexibility is more important than efficiency in the long term: “If you want to build a ship, teach people to yearn for the vast and endless sea” by Saint-Exupery. Culture is how a firm operates, our culture supports rapid innovation and excellent execution, effective teamwork of high-performance people, highly aligned, loosely coupled, a culture that avoids rigidity, politics, mediocrity, and complacency that infect most organizations as they grow; great workplace is not espresso or sushi launches, it is stunning colleagues: we help each other to be great”.
  • As described by Michael Abrash from the inside, “Valve is different”: “Hierarchical management had been invented for military purposes; in the Internet age, with massive network effects, first mover dominates, most of the value is now in the initial creative act: there’s little benefit to traditional hierarchical organization designed to deliver the same thing over and over; what matters is being first and bootstrapping your product into a positive feedback spiral with a constant stream of creative innovation. Valve was designed as a company that would attract people capable of taking the initial creative step, leave them free to do creative work, and make them want to stay. Consequently, Valve has no formal management or hierarchy at all. It is employee’s responsibility, and theirs alone, to allocate the most valuable resource in the company – their time – by figuring out what they can do that is most valuable for the company, and then go do it (similarly to Gore’s practice). People commit to projects, and projects are self-organizing; there are leads, but they’re chosen by informal consensus. Because there are no managers to cling to their people and their territory, no reorgs to plan, no budgets to work around, any part of the company can change direction instantly at any time. Hardest of all to believe is the level of trust, trust is pervasive, the company is transparent to its employees; Valve just trusts its employees and gets out of their way so they can create value. Creative people are the key to success, and Valve structuring around those people has been successful.”

As notes Spotify, leadership is on-going iterative process. Thus, Netflix released an updated version of its 2009 cultural mantra.

These examples are groundbreaking showcases, standing as Blue Ocean for thriving innovation. One might wonder which model to embrace: each company has to build its own innovation identity, taking advantage of situation potentials.

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Blue Ocean approach gives us a few tips we can apply to craft our own strategy: tuning the level of key attributes of innovation value proposition.

Innovation value proposition goes through 3 main steps, creating, developing, engaging:

  1. creating encloses drawing new ideas, creating the concept;
  2. developing means transfering concept into elegant realization, prototyping, testing, iterating, designing the leadership platform;
  3. engaging involves scaling, toggling from the lab to mainstream, getting the entire company to commit in the innovation delivery and propagation, go to market and crossing the chasm.

Rapid innovation model suggest 4 levers to accelerate your innovation delivery: autonomy, ‘creative tension’ (clear stretched goals and innovation expertise), strategic alignment, modular design.

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Blue Ocean for innovation means graduating each of them depending on your context and target:

  • When you’re in the start-up stage, priority is to focus. Armed with this bright  idea of yours, creating phase is behind you; you should be frigging busy to streamline development, build first release, test, refine, iterate, go to market, prepare to scale. Don’t be shallow, go deep, plough your land without distraction, be simpleminded toward customer’s interest: it requires to “be both stubborn and flexible, even simultaneously” as Jeff Bezos observes. It’s really a culture of collective game, relay race, commando expertise to develop business, convince, persuade, cross the chasm and scale: ‘creative tension‘ seems the attribute to raise.
  • If you’re looking to expand a mid-size company, extend your span from one main market position and looking for diversification, you should press for creativity and provide autonomy: a handful of people, ‘matching the right people with the right ideas to staff’ (@lindegaard) will pursue a portfolio of innovative projects. You could borrow to ideation methodology like C-K to generate parallel streams of innovation, without closing the funnel, or complete a deep dive with your customers and observe them, embracing ‘Design Thinking’, or look for non customers and unfold new targets according to Blue Ocean approach; you will further frame feature teams, using Minimum Viable Product and iterative prototyping to develop.
  • Imagine now you’re in a large company with various established business lines, and innovation is perceived as cannibalization. Your challenge is then to renew the innovation spirit, bringing new ideas, fresh air, remoulding the spirit toward risk tolerance. Top-down commitment is required to create a culture of innovation. Completing strategic alignment across the company is a broad endeavor: creating necessity for change, spreading the new era, working towards the same goal, sharing common language, connecting ideas, shaping acceptance for innovation are on your agenda. ‘Innovation needs to support strategy, but every once in a while it can create it’ (@timkastelle) is a different point of view everyone should believe in.

Fourth lever, modularity is a tool appropriate to all phases: API accelerate your innovation and distribute your business, and designing product and api shall be simultaneous to make a better impact.

Have a good innovation trip, steer your innovation ship to its Blue Ocean, and keep in mind that besides these frameworks, ‘people are way more important than tools!’ (@timkastelle).

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