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Digital Transformation is tricky

According to Samsung, the company implemented what they call a New Concept Development in 2013. At the time, this was the new product development strategy of Samsung. I’ll explain what this has to do with Digital Transformation in a minute.

As a part of Samsung’s overall innovation process, a Project Innovation Team (PIT) was born out of the need to have an incubator group to work with every business unit to provide more market insight.

Taking advantage of the Google Android operating system, the company is nowadays leading the global Smartphone market with 22% in Q2’19.

It is interesting to read Yoon’s comment on the core of the change.

The primary mission was to change our customer-facing product development process from engineer-driven to customer-driven

Yoon C. Lee

Samsung’s PIT is following a four-step process: Understand, Ideate, Concept Development, Concept Finalization.

Transformation In Progress

Around 2006, the time the team has been established, a lot of organizations made the step to customer-centric development. In retrospect, I’m asking myself why it has ever been done differently, to be honest.

Considering the sizes of enterprises such as Samsung, Microsoft (which also performed a remarkable transformation), GE, ABB, etc. it is no wonder that some large companies are still in the process of implementing the new concepts.

Thinking of the Past

In most cases, the companies had a more or less working product management which was shielding the customers from development team questions such as “what do you want to achieve”.

The development teams were embedded in V and waterfall models, which work very well for products where components need to be put together.

Software development, however, is a creative process which can better be compared to painting a picture. Even a doctor’s visit to check the reason for certain symptoms comes closer than assembling a motor.

At the same time the handover date, scope of work and resources/price needs to be communicated upfront. A timeline is set to, for example, ramp up the complex marketing machine.

This is also btw, why I think it is not good to speak about projects in product development:

A project is temporary in that it has a defined beginning and end in time, and therefore defined scope and resources.
And a project is unique in that it is not a routine operation, but a specific set of operations designed to accomplish a singular goal. So a project team often includes people who don’t usually work together – sometimes from different organizations and across multiple geographies.

PMI

A product team is quite the opposite. It is an in many regards well-balanced, empowered team that stays together and continuously explores opportunities as long as the product is alive. The goals are defined per iteration and base on moving targets, such as KPIs.

Why the Digital Transformation is so hard

Until today, applying the project way of thinking, which is dominant in industrial environments, to product teams causes friction in organizations. This might also be related to the fact that development works best with budgets than cost/effort estimations.

Effort estimations and Statement Of Work-based pricing almost always lead to a lock-in of too many variables (quality, resources, time, money, scope) which lead to missing the agreed goals.

So why is it so hard in large enterprises to think of development like going to a doctor?

Digital Transformation isn’t about digital products

It’s about an organization’s mindset

Everybody accepts that doctors can’t tell upfront how long it will take to heal, so why do we expect the development team to be able to do this?

It is convenient and gives a feeling of control.

But it is a lie.

Consider the pain involved in accepting this. Whole sales organizations are incentivized to sell equipment which gives a commission. If such organizations are asked to sell digital subscriptions, you are set up for failure.

When given the choice, a salesperson would always choose the one with the high commission over the low. To be honest, who wouldn’t?

On the other side, for example for co-development, it is better to use incremental delivery contracts. This enables the customer to exercise influence and get what is required with a lot less emotional pain. On top of this, it enables a faster go to market for the customer himself.

Embrace Change and move on

The sooner an organization moves on and deals with this, the sooner products can be created that really provide customer value. After adapting the required mindset, introducing digital products is easy.

Where value flow is, there can be cash flowing as well

Conclusion

So what’s important for a successful Digital Transformation is:

  1. Separate disruptors / the Product Innovation Team (PIT) from the rest of the organization, while they are in their ideation to allow them to be creative without the judgment
  2. Get the PIT regularly grounded by involving operational entities
  3. Give the PIT market access
  4. Understand that PITs have another working mode (explorative, hypothesis-driven vs assertive)
  5. Incentivize everybody on the goals of the transformation
  6. Have goals that make sense for each organizational level
  7. Manage goals and expectations (a mindset doesn’t change overnight)
  8. Embrace failure, but require to document what has been learned
  9. Give everybody in the organization a voice (not via townhalls, but via collaboration platforms)
  10. Record every meeting and hold people accountable
  11. Reduce meetings to 6 participants and have a timebox
  12. Note the money spent for a meeting
  13. Trust the teams to make autonomous decisions
  14. Digitalize internally first, then externally
  15. Change the mindset to “You rent a team and don’t buy the outcome”

By now it should be clear, why I picked Samsung in the beginning. I think they are doing a lot right, which is why I’d like to cite Yoon again:

Without a replicable process, it is very difficult to make innovation stick within a large organization. But there is a secret sauce to it. Make the process extremely simple.

Yoon C. Lee

Print your guiding principles on the back of every business card. Why should you hide them from your customers anyways? You might, after all, have the same gole but didn’t know yet 🙂

Tricks to Boost Innovation

Every company wants its employees to meet financial targets and at the same time be as innovative as start-ups. Many try to increase innovation by incentive programs or other extrinsic, but expensive factors. Continue reading if you’d like to save some money and learn some tricks to boost innovation.

While getting money for innovation is good, creative minds are often less extrinsically motivated. Most likely other factors would boost disruptive innovation in large enterprises a lot more:

Appreciate an idea (give credits where they belong, no stealing of ideas) and be supportive (give a voice, give space).

Boosting innovation might be easier than you think and doesn’t cost a fortune.

Practical Tip 1 – Be Prepared to Document

Keep a nice notebook (paper) and a pencil next to your bed to make a note whenever the muse visits. Don’t do it on loose sheets of paper. It doesn’t have the same effect and it gets messy fast. Leave space when you start with an idea by using the right sides only for example and write down dates whenever you add info.

Enterprises should provide online space where employees can propose ideas and collaborate with others (enterprise idea management platform). Employees throughout the company can join a project, not just a specific group.

You will see that over time the book with your ideas will get very full. You will go back to ideas you had years before and supplement them over time. I started with my books 9 years ago and got several hundred potential business and startup ideas.

It also happens from time to time that you see ideas you had in your book appear as actual products. Don’t worry about it, but take it as an “It can’t be too wrong what I’m thinking if some of the greatest minds have the same idea.” Try to learn from these occurrences how the innovator brought the topic to life.

Practical Tip 2 – Provide Environment

As an enterprise, plan some money for domain experts to provide a platform for further ideation (afterburner) of topics added to the enterprise idea management platform.

Allow departments to easily fund employee projects. Introduce an innovation currency (1 coin per person) for every employee which can be spent independently.

This fixes that some topics never get fixed due to the profit/loss responsibility of internally competing departments.

Practical Tip 3 – Learn to Sketch

Learn how to sketch. It is easier to add a small sketch to an idea than to describe it, especially when you want to communicate your idea in order to gain support for example in a management review presentation.

Practical Tip 4 – Provide Resources

Make room for innovation. If you are a company, I would highly encourage you to make room for your employees to explore better ways.

Give free access to equipment in their spare time such as servers, spectrum analyzers, motors, CNC machines, lathes or whatever you’re working with.

If employees have a good idea, encourage them, connect them with resources and give credit. Treat their ideas with respect and at an appropriate time, act as a sponsor / financial angel.

Practical Tip 5 – Rapid Prototyping

Automation and fast turn around is key. If you’ve left the initial stage (sketching, enriching) of the idea, being fast to iterate is key.

In the hardware world, this means rapid prototyping with 3D printing, 3D scanning, the use of a desktop CNC router, etc.

For software try either low code platforms or ecosystems with plenty of libraries and automate as much as possible.

Try to focus on “delivering” full cut-troughs through the stack to allow potential customers to test your product. This is where you should do hypothesis-driven testing at the latest. I prefer to already start it at the beginning.

Hydra, A Recipe for Innovation

According to Greek mythology, Hydra was a water monster with nine heads. Eight of these heads were mortal and the ninth immortal. Heracles (Roman = Hercules) was sent by Eurystheus to kill the Hydra. Every time Heracles cut off one of the serpent’s heads with his mace, however, the Hydra would regrow two new.

Even though the story is most likely just that, a story, it can serve perfectly to visualize a basic principle which can be employed to have more ideas and be more innovative.

The head symbolizes a thought process or an idea. You, the innovative mind, are Herakles and the mace represents some sort of activity.

An activity can mean writing it down, sketching the idea or creating a prototype, etc. So some form of doing or taking action. It can also mean to delegate the task of exploring an opportunity, work with a university (Capstone, Ph.D., etc) or discussing it with a team of open-minded colleagues.

Every time you take action, you allow your mind to let go of a thought it otherwise would try to process and view from different angles.

You can use Hydra to increase the flow of ideas in all situations from business ideas to vacation ideas. Because you just need a blank notebook to get started, you can do it everywhere, no matter whether you have a power supply or not.

The core of Hydra can also be found in other techniques, such as brainstorming. It can be used in slow-motion multitasking.

Practical Tip 1 – Be Prepared to Document

Keep a nice notebook (paper) and a pencil next to your bed to make a note whenever the muse visits. Don’t do it on loose sheets of paper. It doesn’t have the same effect and it gets messy fast. Leave space when you start with an idea by using the right sides only for example and write down dates whenever you add info.

Enterprises should provide online space where employees can propose ideas and collaborate with others (enterprise idea management platform). Employees throughout the company can join a project, not just a specific group.

You will see that over time the book with your ideas will get very full. You will go back to ideas you had years before and supplement them over time. I started with my books 9 years ago and got several hundred potential business and startup ideas.

It also happens from time to time that you see ideas you had in your book appear as actual products. Don’t worry about it, but take it as an “It can’t be too wrong what I’m thinking if some of the greatest minds have the same idea.” Try to learn from these occurrences how the innovator brought the topic to life.

Practical Tip 2 – Provide Environment

As an enterprise, plan some money for domain experts to provide a platform for further ideation (afterburner) of topics added to the enterprise idea management platform.

Allow departments to easily fund employee projects. Introduce an innovation currency (1 coin per person) for every employee which can be spent independently.

This fixes that some topics never get fixed due to the profit/loss responsibility of internally competing departments.

Practical Tip 3 – Learn to Sketch

Learn how to sketch. It is easier to add a small sketch to an idea than to describe it, especially when you want to communicate your idea in order to gain support for example in a management review presentation.

Practical Tip 4 – Provide Resources

Make room for innovation. If you are a company, I would highly encourage you to make room for your employees to explore better ways.

Give free access to equipment in their spare time such as servers, spectrum analyzers, motors, CNC machines, lathes or whatever you’re working with.

If employees have a good idea, encourage them, connect them with resources and give credit. Treat their ideas with respect and at an appropriate time, act as a sponsor / financial angel.

Practical Tip 5 – Rapid Prototyping

Automation and fast turn around is key. If you’ve left the initial stage (sketching, enriching) of the idea, being fast to iterate is key.

In the hardware world, this means rapid prototyping with 3D printing, 3D scanning, the use of a desktop CNC router, etc.

For software try either low code platforms or ecosystems with plenty of libraries and automate as much as possible.

Try to focus on “delivering” full cut-troughs through the stack to allow potential customers to test your product. This is where you should do hypothesis-driven testing at the latest. I prefer to already start it at the beginning.

Slow-Motion Multitasking

Highly creative people often have one thing in common and I’m glad we now have a name for it: slow-motion multitasking.

Texting while driving is a bad idea, we can agree on this. But for a specific kind of activity, doing multiple things at the same time is exactly what we should do.

Science has shown that multitasking on a per-second basis, also known as human multitasking, is decreasing productivity.

But I’d like to argue that developing multiple ideas at the same time is something completely different. This means you should move back and forth between ideas, depending on where you can contribute to the success, not where you have to work due to an artificial schedule.

But please, this procrastination/piling up of initial ideas should not be confused with firefighting, also often observed when people work on different topics at the same time. It should also not be used as an excuse not to work on a difficult topic.

If you just had a brilliant idea for another topic, it is beneficial to set one thing aside for some time. Switching allows the brain to visualize a problem by taking new impressions and learnings into account.

I observed working on projects of different domains at the same time works best for me. For example, defining the architecture for industrial, real-time analytics, high-throughput streaming application and building (design, manufacturing) an endurance drone.

This can be perfectly combined with open innovation and Hydra.

Practical Tip 1 – Be Prepared to Document

Keep a nice notebook (paper) and a pencil next to your bed to make a note whenever the muse visits. Don’t do it on loose sheets of paper. It doesn’t have the same effect and it gets messy fast. Leave space when you start with an idea by using the right sides only for example and write down dates whenever you add info.

Enterprises should provide online space where employees can propose ideas and collaborate with others (enterprise idea management platform). Employees throughout the company can join a project, not just a specific group.

You will see that over time the book with your ideas will get very full. You will go back to ideas you had years before and supplement them over time. I started with my books 9 years ago and got several hundred potential business and startup ideas.

It also happens from time to time that you see ideas you had in your book appear as actual products. Don’t worry about it, but take it as an “It can’t be too wrong what I’m thinking if some of the greatest minds have the same idea.” Try to learn from these occurrences how the innovator brought the topic to life.

Practical Tip 2 – Provide Environment

As an enterprise, plan some money for domain experts to provide a platform for further ideation (afterburner) of topics added to the enterprise idea management platform.

Allow departments to easily fund employee projects. Introduce an innovation currency (1 coin per person) for every employee which can be spent independently.

This fixes that some topics never get fixed due to the profit/loss responsibility of internally competing departments.

Practical Tip 3 – Learn to Sketch

Learn how to sketch. It is easier to add a small sketch to an idea than to describe it, especially when you want to communicate your idea in order to gain support for example in a management review presentation.

Practical Tip 4 – Provide Resources

Make room for innovation. If you are a company, I would highly encourage you to make room for your employees to explore better ways.

Give free access to equipment in their spare time such as servers, spectrum analyzers, motors, CNC machines, lathes or whatever you’re working with.

If employees have a good idea, encourage them, connect them with resources and give credit. Treat their ideas with respect and at an appropriate time, act as a sponsor / financial angel.

Practical Tip 5 – Rapid Prototyping

Automation and fast turn around is key. If you’ve left the initial stage (sketching, enriching) of the idea, being fast to iterate is key.

In the hardware world, this means rapid prototyping with 3D printing, 3D scanning, the use of a desktop CNC router, etc.

For software try either low code platforms or ecosystems with plenty of libraries and automate as much as possible.

Try to focus on “delivering” full cut-troughs through the stack to allow potential customers to test your product. This is where you should do hypothesis-driven testing at the latest. I prefer to already start it at the beginning.