Crowdsourced innovation strategy through collaborative IT tools

Crowdsourcing your innovation strategy within the organization sounds like the perfect idea generation mechanism. When Whirlpool started to use IT collaboration tools in the mid-2000's to collect, share and collaborate on innovation projects it not only increased the likelihood of serendipity. A side effect was that you could track which ideas were hot - aka which topics people across the global organization were working on. Was it design, pricing or sustainability? By counting the number of projects and ideas within each domain and topic a bottom-up innovation strategy was built. Those hot topics set the innovation agenda. Crowdsourcing the innovation strategy has several novel advantages:

• Don't bother spending time and energy on what to focus on - let your people across the globe decide implicitly through how they spend their time 
• Don't think on how to engage employees and changing the innovation agenda - it's changed by engaged employees in real time responding to changes in requirements and the context where you do business
• Don't have special activities to connect people and organizations - they will find and connect with themselves were it makes sense 

Serendipity and prioritizations happens by themselves through bringing smart people together sharing ideas. Using a structured IT tool fostering collaboration will not just connect people from far away. Such an IT tool will also enable progress tracking, KPI collection and idea repository. Choosing the right IT based collaboration tool requires you evaluate and decide on:

• Who will use it? Will it be a smaller or larger set of people inside the organization? How will you engage external parties such as universities and startups?
• How will you track progress? How long will you track the progress of an idea? Will you use it as a repository to store ideas or will it be more of a project management tool as well?
• What external material will be available through the site? Who will manage it and update it? Should it be only links or will you store it locally as well?

The answer to these questions sets the foundation on what kind of IT collaboration tool you should use when enabling your employees to define the innovation strategy from the bottom and up.

RUSH-data enabled through Enterprise Architecture

In a turbulent market an agile organization requires RUSH-data. RUSH-data stands for Realtime, Unfiltered, Shared and Holistic data. An organization with access to RUSH-data has the building blocks to become agile and act upon market changes with unprecedented speed. It does not, however, guarantee that it moves faster and more vigorously than others.

• How do you enable RUSH-data? 
• Which parameters to tune? 
• How can Enterprise Architecture help setting the level for where to extract the data and when? 

First an example to get the thoughts flowing. Zara, the Spanish fast-fashion retailer, co-locate staff from design, manufacturing, supply-chain and store operations in units of 240 people per cohort. That enables the people to share unfiltered data in realtime enabling them to get an holistic view of the current state. That enables them to respond much quicker to market demand and get new designs in stores within 3 weeks instead of 3 months for competitors. The cumulative effect over the years has led Zara to outpace their competition in growth and profitability.

Where does Enterprise Architecture come into play? Isn't this a case for not using Enterprise Architecture and trust oral word-of-mouth instead of complicated ERP systems? Well, it could be if you don't succeed. But we've done communication for thousands of years and still only Zara manages to leverage human communications. So how can Enterprise Architecture help here?

First of all you must have a culture of information sharing and thirst for more data. Otherwise no system in the world can save you. Prepare for a funeral ...

Then I believe Enterprise Architecture can help in these ways for each element of RUSH-data:

• Realtime
• EA sets the non-functional requirements for gathering data. Is it set for real-time or only providing snapshots? How does the snapshots accumulate across IT systems? Will it distort data accuracy and age?
• Which data needs to be available in real-time to enable RUSH-data?Aggregation of data across systems often leads to distortion disabling real-time attributes. When designing the EA design for RUSH-data.
• Unfiltered
• Is data available from its sources or only aggregated in reports with conclusions drawn? Can anomalies be traced or is it averaged and crunched to nonrecognition? Trends are important - however trends indicate strong movements. Developments grow from small significant anomalies that needs to be traced and identified. 
• Shared
• Collaboration and sharing of information is crucial in todays turbulent markets. A large component is to have a culture of sharing. Assuming a sharing culture, then how can EA drive sharing? Through assigning roles and ownership of data it will be much easier to decide upon how and to whom information should be available and in which format. Through an SOA information can be both unfiltered and shared in the right format to each person.
• Holistic
• EA is very good at identifying information ownership throughout an organization. Which master data combined with realtime information from the source will give a holistic view of how we're doing right now? Work on reducing the information size to craft the data-set needed to get the holistic view. Then create services that supply that information in a dynamic manner. Through the SOA the information can be shared, unfiltered access to raw data in realtime. RUSH-data made real through Enterprise Artchitecture.

Next thing to do is how to visualize RUSH-data. What's your opinion on the best ways to make visualization simple, fast and collaborative?

More reading:

• Don Sull's blog on RUSH-data: http://blogs.ft.com/donsullblog/category/rush-data/
• Matthias Scholander on the CIO Perspective of RUSH-data: http://www.matthiasscholander.com/2010/08/strategic-agility-the-cio-perspective/

Has Enterprise Architecture reached its Plateau of Productivity?

Enterprise Architects pride themselves with driving IT from a business perspective. Are they doing that or is it just another case of technology driven IT? This time with structure and control as underlying forces.

What shall Enterprise Architects do to really benefit their organization and add value?
There are two main drivers that you as a business leader have to balance between; Exploitation and Innovation.

• Exploitation. Exploit any given opportunity to the maximum. Be as efficient and operate with low cost. The IT delivery itself should of course be Lean. But more importantly it should enable other departments to be lean in their processes and operations. Embrace possibilities. Don't be too reliant on standards, especially IT standards. Let each business area decide what is best for them in terms of functionality, not in which system to use. 
• Innovation. Innovate within the IT delivery. How can we help the business being more efficient? Have IT drive Innovation, from idea generation to replication of new products, services and business models across geographies. Enable exploitation of new innovations through effective and efficient IT solutions. What should they look like? Well, be close to the business and listen, invest in agile IT support systems that are evolving over time. Calculate at least 25% of IT costs to be spent on new development, not just IT operations and roll-out.

The aim for an Enterprise Architect is to enable, guide and steer the IT delivery between these two extremes. Pushing Exploitation to be as efficient and extract as much profits out of any given opportunity. Driving Innovation to create new opportunities and being agile enabling new sources of revenue.

The most important things to get right are then:

• Interfaces. Let interfaces drive the enterprise integration, not standard systems. Service Bus is a technological solution to a business problem. Get the business solution right then the technology will solve itself. Having interfaces, common data models and master data drive integration will definitely drive integration across business domains in large enterprises.
• Collaboration. Share ideas, solutions and experiences across all silos. Collaborate physically and digitally. Use video, IM, YouTube, Twitter, etc to share and discuss across the entire enterprise. "If Xerox knew what Xerox knows" is a famous quotation from an organization inventing everything but not exploiting anything to their benefit.

Plateau of Productivity? Yes, unless we focus on interfaces and collaboration instead of steering and controlling Enterprise Architects have definitely reached the Plateau of Productivity. What do you think are the constraints for enterprises making more usage of Enterprise Architects to avoid the Success Trap of staying in the Exploitation domain and getting stuck?

IT driven innovation

IT becomes a major driver behind increased speed and results from innovation. With manufacturing becoming a commodity and marketing increasingly hard and expensive many organizations are turning to innovation as the new revenue source. Innovation can create higher valued products from existing manufacturing capacity and simplifies marketing through improved experience.

IT greatly speeds up innovation and increases the effect in four areas:

• Measurement. How do you measure the current state of affairs?
• Experimentation. What is the value of this idea?
• Sharing. Who can benefit from my new knowledge?
• Replication. How to scale the new innovation throughout the organization?

These areas are important as separate activities and most organizations do one or several of them. They reinforce each other further magnifying the effect from each area. Improving measurements gives you better data easier and cheaper. Experimentation thrives on faster and cheaper measurements. Sharing those results further increases the value across the organization. Replicating successful business innovation enables faster scale ups and shorter time to market.

Measurements is radically improving the way we collect data and sort it. Nano data from click streams, emails, discussion boards, web trends, CRM, supply-chain, etc. Business intelligence is tapping into this area; needs to tap into the very bits and pieces of the nano data and make it available to the organization.

Experimentation through IT tools based on improved measurements. Measurement both to feed into the idea generation and to evaluate the effect from different ideas. Retailers can use IT to efficiently instruct different displays and then use improved nano measurements to follow up sales and profitability. New business models can use IT to track the consumption of goods and services through RFID tags on individual levels.

Sharing the results of experiments and the measures improves others to innovate. They don't have to invent the wheel again, can get the exact data measure setup, sharing ideas that for some reason failed (sometimes the most important aspect as failures seldom gets documented and less often shared).

Replication of innovations once they've been evaluated and proven is the key to successfully reap the benefits. The first three areas help organizations find and nurture new innovations. IT makes it possible to take that innovation and roll it out quickly and seamlessly. IT drives replication of business processes themselves. An example is how a bank is replicating a new loan process across all branches, a new customer return policy, displaying new food products in a retail store. Measurements enable the follow up of how well replicated the innovation is.

Collection of nano-level data is the foundation for IT driven innovation and replicating the innovation across the organization enables fast time to market.

Cognitive Surplus

What did you do before the web? How was it possible to find a restaurant in those days? During breaks - what did you discuss?

The world used to be disconnected and communication was one-way - from producer to consumer (unless it was from Aunt Annie - then it was totally wasted ;-)). We consumed what others were producing - clothes, food, houses, TV, radio, music, etc. Today we still consume what others produce - with the big difference of us being able to search for what we would like to consume - gone are the days of mass-market consumption. Using Chris Anderson's words - The Long Tail becomes the new Mass-market. We still consume - but not the same stuff. And that's why we have so few common things to discuss.
The even bigger difference that emerges is that we nowadays not only consume - we produce - and for free!

Instead of just passively consume what others produce - we now turn our time and energy into producing. The time previously spent on TV alone represent 1000h/year. That passive time is now slowly being turned into creativity - especially among younger people. Contributing to blogs, wiki's, Twitter, Linux, Facebook, etc are the new time-killer - and this time we fill it with thoughts, creativity and true dialogue. Spare-time previously spent on TV is now being redirected into creativity.

In the future each of us have some 1000h/year to spend on creativity. Shall we continue to watch TV and passively consume what other produce or start contributing ourselves? This extra spare time is what researchers call the Cognitive Surplus - the current passive time possible to turn into creativity. All Wikipedia entries represents some 100 million hours compared to 500 billion hours of TV in Europe and US - there is a large pool of time potential out there. Combined with our drive to do things that are engaging, interesting and because they're the right things to do. Spare-time, sharing technology and motivation of interest will enable us to become more creative - creating new topics to discuss during breaks (not because we have to - just because we want and we can).

Which Wikipedia article will you contribute to tonight?

Instead of TV why not read any of the following for more inspiration:

• Great spare-time discussion between Shirky and Pink on Wired
• Cognitive Surplus by Clay Shirky
• What motivates us: Drive by Daniel Pink

Watch your extreme customers

Your extreme customers are leading you into the future - explicitly - if you just care to watch.

The Chinese appliance manufacturer Haier uses their maintenance and repair guys to watch what customers are doing with the appliances. Where are they used, in what environment, who is using them and for what purpose. When a lot of washing machines got clogged with dirt they did not just assume the customers were stupid - they investigated the root cause. What did they find? That their customers were cleaning vegetables in them - can you clean clothes you should be able to clean vegetables seems to be the logic. Did they put big warning signs on the appliance - DON'T WASH VEGETABLES? Did they sue them or tell their customers it was their own fault?

No they changed the design to enable washing of vegetables as well as clothes. They watched what their customers were using their products for, listened to why they wanted to use it that way and then changed their behavior and designed a machine meeting the needs. Did customers notice what Haier did? Were they happy? The answer was loud and clear - market share in rural China went from single digits to 24% in 3 months in a market growing exponentially.

How do you start listening to your extreme customers?
First of all, in an article in Harvard Business Review April 2010 issue (Behold your extreme customers) researchers found that only 8% of managers cater to the needs of extreme consumers - so you will be pretty alone. Your extreme consumers can be engaged through for example:

• Let customers take ownership. Let the customers form communities, groups and influence/control product development. Lego took a whole new route after gathering their most devoted users and developed Lego NXT, the Robot Lego.
• Ask customers for help. Involve extreme customers in focus groups, ask them to test products to the extreme or suggest new designs.
• Sponsor events. Extreme events targeting the extreme customer. Costume dressing parties, all-you-can-eat festivals or invitation only parties where you must prove you're an extreme customer.
• Share consumers’ stories. Share in papers, advertising or on the web the most extreme usage of your products. Let your extreme customer become the hero.

How can you let your extreme customers drive your product development, marketing and brandbuilding?