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Taking Disruptive Solutions to Market

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When an entrepreneur dreams up a new product opportunity and launches their start-up, they are surrounded with advice on the steps to follow:

  • Define the customer problem or job to be done
  • Develop a minimum viable product as a solution
  • Prove product-market fit by winning customer support
  • Validate scalability, unit economics, etc…

While these steps are relevant and useful, they can create an unduly linear view of the path to success.

 

Success is never a simple straight line.

Discussing start-up and new product success in this way creates the impression that the path to market looks a little like this:

Slide1A relatively direct relationship between product and market might work for some simple product solutions, particularly those involved in offering a new product direct to consumers. However, lean start-up has reminded us that success takes loops of learning and iteration to find that match between product and market.

Help customers embrace change (despite resistance).

When you start to work on more complex solutions that involve systemic change or large changes in buyer behaviour, buyers can acknowledge the need and the value of the solution but still offer resistance. These buyers cannot simply buy the product. They must also decide to embrace disruptive change to long established ways of working. Disruptive business-to-business products require changes to systems, processes or jobs and have other implications for their target customers. Strong institutional forces will exist that are opposed to change. To realise the benefits, the customer needs to be prepared for a wider and more significant change.

Declining systems give way to new ways of working.

The Berkana Institute has a theory of change in large scale systems highlighting resistance will prevent straight-line adoption of new change. If the change threatens the current way things work, you won’t get direct adoption. Change under this approach may happen when the current system declines, giving way to a better system that will replace it. That new, better system is developed outside the current system as a small group of innovators name the need for change, connect in networks, nourish the new change and bring it forward as a new approach.

Two-loops

Disruption brings change and creates new markets.

The Berkana Two Loops model of change gives us a new way to look at the path for disruptive products that bring about major changes in organisational systems. If we consider the introduction of cloud computing technologies as the introduction of an alternative systemic approach to technology, we can map it against this model.

  • At first, traditional technology organisations saw cloud services as a threat to their traditional model and particularly the end-to-end control of infrastructure.
  • Cloud services grew with new and innovative organisations, in grey market IT and at the edges of organisations. This gave the new cloud services time to clarify the problems and use cases, develop the new approaches and connect the first customers. The communities of early customers helped the solutions to mature and foster the underpinning systems of delivery, management and support. Communities of practice grew up around these technologies and created a range of tools and processes that helped cloud computing become enterprise-ready.
  • Eventually, a wide range of organisations are prepared to ‘leap the chasm’, seeing potential to migrate to these new cloud systems and embrace a very different way of working.

Slide2

This approach of creating a new market for a new solution is why we commonly see disruptive technologies suddenly race into prominence. They have been long fostered by the communities of early innovators and have built the networks of partners, ecosystems and systems to propel rapid growth. They are examples of ‘seven-year overnight successes’.

Build a strong ‘ecosystem of relationships’ to bring about change.

At LanternPay, we have seen this scenario playing out. We have had strong support from our work with innovative early customers in plan management in the NDIS and in government payments with the Transport Accident Commission of Victoria and Lifetime Support Authority of South Australia. These relationships have helped us to develop strong growth in provider partnerships. Importantly, we have focused all along on the potential of an ecosystem of relationships to accelerate innovative change well beyond payments in our target systems of health care, aged care and disability. This approach has delivered us a rapidly growing pipeline of new payer relationships, a growing suite of integrations and a product roadmap across all our target markets. Each element helps make the change decision for a provider or a payer that much easier to make.

Simon Terry is consultant, speaker and start-up advisor who focuses on developing the strategy, leadership and collaboration to deliver complex innovation in organisations. He also puts these skills into practice delivering growth strategy for LanternPay, a claim payment platform for health care, aged care, disability and government payments.

 

Interview on Fintech Startups and Social Purpose

I was interviewed recently by Macquarie Group on fintech innovation, LanternPay and the need for a fintech startups to have a social purpose. Fintech’s are maturing into key collaboration partners for players in the finance ecosystem. It is important that finch’s understand that finance is about more than money and play a social role.

Part 1: Discomfort in the #FutureofWork

When we talk about the future of work, we talk about managing learning, creativity, uncertainty and complexity as human roles. The processes, the predictable and routine will be automated. What we do not discuss enough is that with this shift comes an explicit embrace of discomfort. We need to value discomfort in our organisations.

The Role of Discomfort

We aren’t always comfortable in a business context to use emotive language. One reason we tend to slip past discussion of discomfort in the future of work is that we tend to use rational logical language like uncertainty and complexity to discuss the work context. These are terms with precise, businesslike and emotionless language. We don’t explicitly pull into view the emotional flip side that comes with a human experience of these states.

  • What does uncertainty feel like: uncomfortable, frightening, doubtful, etc
  • What does complexity feel like: uncomfortable, overwhelming, challenging, etc

The concept of Flow from positive psychology highlights that we can create positive experiences from challenge, but only when we focus, experience our capabilities rising to match the challenge and get feedback on our progress. In many demanding modern workplaces with thousands of electronic daily distractions, these conditions are not being met, while the uncertainty,complexity and pace of change continues to rise.

Many of the practices advocated as part of the future of work attempt to bake an increased level of discomfort into work. The theme generally is that it is better to have a small difficult conversation early rather than suffer a failure or breakdown later. The list of practices that encourage or increase the frequency of uncomfortable conversations is long: purpose, values, agile, lean start-up, holacracy, working out loud, collaboration, transparency, design thinking, etc.

What we need to embrace is the role that discomfort comes with a strong focus on learning. The value of humans in complex and uncertain activities is collaborative learning. Each of us learns when we are out of our comfort zones. When we are out of our comfort zones together, the quality of our interactions becomes critical.

Ending the Parent-Child Relationship of Employee Comfort

Increasing discomfort in the workplace crashes straight into our traditional paternalistic approach to employee engagement. The goal is defined as creating a positive, engaged employee committed to the goals of the organisation and prepared to offer discretionary efforts internally and externally. Uncomfortable thoughts need not apply. The implicit or explicit promise of much employee engagement literature is that the role of the employer (fulfilled by senior management) is to make employees comfortable – provide a clear vision and purpose, simplify processes to make them easier, provide security of benefits and career, provide consistently rewarding work, and lead effectively.

Lead effectively is perhaps the most dangerous phrase in that list because so much of our leadership expectation is hierarchical and modelled on a benevolent parent. Leadership in any human context is not parenting. In a future post we will consider effective leadership for uncertainty and complexity. Without that clarity, we continue to see leaders who feel that their responsibility should be to take away uncertainty, to reduce complexity and to remove discomfort. By taking the work on themselves, these leaders dramatically increase their own discomfort, fail in their roles and fail their employees. Avoiding the work only makes the situation worse for all involved.

We need to accept that discomfort is not going away in our workplaces. The organisation and its leaders cannot take on the responsibility of removing the adverse affects of a changing environment of work. Removing employees entirely would be an easier challenge (and one many employers seem to embrace). Rather than removing discomfort the challenge for any organisation embracing the future of work is how to manage discomfort and how to ensure that it is productive for employees and the organisation.

This post is part of a multi-part series exploring discomfort in the future of work. Future posts will examine how organisations, leaders and individuals can manage this discomfort. These posts are part of a process of working out loud to explore these uncomfortable concepts so feedback is welcome.

Part 2: Personal Discomfort in the Future of Work

DDRG Panel: Leadership & Digital Workplaces

A great panel discussion at the Digital Disrupt Research Group of the University of Sydney on Leadership and Digital Workplace, featuring Kai Riemer, Sandra Peter, Euan Semple, Anne Bartlett-Bragg and I.

Three Levels of Co-Creation

As we begin to explore the collaborative potential of connection, co-creation is becoming increasingly important solution to problems. Organisations are increasingly looking to employees, partners and suppliers to be a part of efforts to co-create solutions to complex problems. Collaborative co-creation is a key part of the Solve phase of the Value Maturity Model. As we practice co-creation, we discover bigger opportunities to create value.

Co-Creating Ideas

Most co-creation begins with some kind of crowd-sourcing of ideas to solve problems. Diversifying the sources and inputs into the creation of a solution can enable big steps forward. Often new stakeholders have solutions to hand, see potential to reuse capabilities or bring opportunities to do things in new ways. Crowd-sourcing can be a fast and effective way to gather inputs from a large group of people towards a solution.

Efforts at crowd-sourcing solutions need to plan for two main challenges:

  • Lack of Connection: To contribute meaningful solutions, people need to feel connected to the problem and to each other.
  • The Volume of ideas overwhelms Execution: ideas are great but the exercise to sift and integrate diverse ideas can be a drain on execution. This is why many efforts at crowd-sourcing turn into a show of ‘engagement’ with no traction on the ideas submitted.

Co-Creating the Work

The next level of co-creation is when people come together to take a solution and execute it. The challenges of a problem don’t stop when you have an idea. People need to solve all the little issues and manage the idea until it is successfully implemented.

Make sure the expectation in you co-creation community is that work will be done to solve the problem.  Give the community the autonomy to follow their ideas. People will contribute better ideas if they think that they have to see them through.  Co-creation is more meaningful to a community that has been asked to work the problem together. Challenge them to take their ideas and see them through to implementation.

Co-Creating the Problem

The final level of co-creation goes back to the start and looks at the system from a higher view.  This level removes the constraint that the problem definition is externally imposed on the community. At this level of co-creation, the community has responsibility to find, create and implement its own solutions. To do this the community is going to need to start to ask questions about Purpose, the scope of the system and what goals they have for the system.  Bring a diverse group of stakeholders in to shape the problems and you may discover new problems and that some of your current problems aren’t such a big issue. The third level asks the community to own co-creation from Purpose, through Diagnosis, and then to the Design and Execution of any solutions.

Work Ahead for 2017: Foundations, Personal & Organisational Work

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As the end of November approaches, that time has come again when we must consider whether we have the right initiatives in place for ourselves and our organisations as we get ready for 2017.  How are you transforming the capabilities and work practices in your organisation to make sure that your teams are more effective in their work?

Why is Work Changing?

The way we work is fundamentally changing under the influence of five main drivers:

  • Pervasive Global connection: As internet connectivity has gone mobile, we now have the ability to connect with, to converse with and to see the whole system of our stakeholders any time anywhere.
  • Automation: Digital technology has enabled us to automate simple tasks and string together increasingly complex processes and systems.
  • Data and Analytics: As digital connection and digital automation expands so does our ability to gather data and analyse that data to provide insight and run complex algorithmic processes.
  • Changing Consumer Expectations: As consumers are exposed to the potential of digital through consumer technology and consumer services, the businesses must meet disruptive and exacting standards for convenience, service, value and speed.
  • Accelerating Pace of Change: Disruption, greater responsiveness to change and ever-shortening cycles of feedback are the new norm for business and our work practices must adapt to enable our businesses to keep up.

We have already seen great change in digital transformation.

Further dramatic changes in the nature of work are here but ‘not yet widely distributed’ to borrow the phrase of William Gibson..

2017 Future of Work Recommendations

With these pressures on the way we work, every business should have a focus on how it is changing the way its people work and the practices that will support ongoing transformation of work. Here are my recommendations on what work you should have on your backlog for the new year:

Foundations:

These five are in place in your organisation today. However, they may not be well understood, managed or serving your purpose.  As you look to 2017 it is always worthwhile to ensure that the foundations are sound and well aligned.

2017-foundations

Purpose: Be clear on your personal purpose. Look for that purpose in the work you do. Clarify the shared purpose in your organisation. Don’t impose a purpose designed around the leadership table. Discover the purpose through the stories and the work that bring your organisation together.

Strategic Value: What value are you trying to create to fulfil your purpose? What kinds of value matter most to your stakeholders? When do they know you are creating value? What measures tell you that you are achieving your goals?

Networks: To compete in the network era, your organisation must be networked. How are you bringing people together to connect, to share, to solve problems and to respond to the networks around your organisation? The technology matters less than the connection, the behaviours and the shared purpose. Are you clear on the strategic value of your communities, are they well supported with sponsorship, investment and community management so as to accelerate their value creation?

Culture: Move beyond words on a poster. Move beyond generic platitudes. Move beyond an agglomeration of individual team cultures. What specific values are shared across your organisation? Why do these help fulfil your purpose? How do those values translate to expectations about behaviours in and across your teams? Is the culture in your organisation effective for your purpose and the value you are seeking to create? How do you personal role model the behaviours you expect from others?

Employee Experience: Are you working somewhere that values the employee experience and is adapting it to changing work and changing roles in the organisation? How have you aligned your employee experience to your desired customer experience? Does your workplace create rich value for employees and enable them to express their potential in fulfilment of purpose? Does your employee experience work as well for the one-hour temporary contract worker as the long term employee? Does it work equally well for all levels of the hierarchy and all corners of your network?

Personal Effectiveness:  Four Key Future of Work Practices

These four personal practices are enablers of the future of work. They enable an individual employee to deliver greater value in their work by responding to the opportunities and information in their environment. Agile and adaptive they empower employees to continuously improve and innovate.

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Working Out Loud: Sharing work in progress in a purposeful way with relevant communities will accelerate learning, sharing and feedback cycles. Start working out loud now.

Personal Knowledge Management: Learn how to turn the personal information flood into effective sense making, learning and sharing. A critical skill to make sense of complexity and to leverage networks for learning.

Adaptive Leadership: Enabling the rebel and the change agent to lead more effectively in any system. Improving understanding, influence and the increasing the breadth of leadership techniques to create collective change in any system.

Experimentation: Move beyond the limits of your expertise. Learn by doing. Resolve uncertainty through action. Shorten cycles of decision making and feedback to increase personal effectiveness.

Organisational Effectiveness: Scaling & Accelerating Change

Organisations are made up individuals. These four practices of organisational effectiveness scale and accelerate the personal practices through a focus on design of systems for connection, learning and adaptation.

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Open Collaborative Management: Middle managers are often those who find a change to digital ways of working most threatening and disrupting. Open up the work of management. Move management from planning, allocation and control to facilitation, alignment and coaching. Shorten cycles and improve the performance value of feedback. Foster the role of managers as network navigators and brokers. Management can be a critical point of leverage in achieving more open, more collaborative and more effective work.

Scalable Capability Development: Turn each employee’s learning into a contribution to scalable system for delivering strategic value. Create Big Learning systems that scale learning around strategic capabilities for the organisation’s success. Coordinate your learning agenda as an agile change program. Curate the capability building of your teams, leveraging learning from peer communities and leverage social learning to bring 70:20:10 and a performance-oriented approach to learning to life at scale and in the workplace.

Effective Networked Organisations: Take advantage of the networks in and around your organisation to rethink your business model and organisational design choices. Break the centralised/decentralised binary and move beyond hierarchy. Enable autonomy, foster alignment and improve effectiveness for purpose. Skill your teams to achieve effectiveness in the wirearchy. You don’t need to purchase a new management system. You need to adapt your approach to managing knowledge, trust, credibility and results to your purpose, culture and community.

Agile Innovation & Change: Adapt to the changing needs of the environment and stakeholders to deliver new value. Accelerate innovation and change through new approaches and by putting in place the systemic support for employee-led innovation, change and transformation to a more responsive organisation.

Simon Terry provides consulting, advice, speaking and thought leadership to global clients through his own consulting practice, and as a Charter Member of Change Agents Worldwide, a network of progressive and passionate professionals, specializing in Future of Work technologies and practices.  The focus of Simon’s practice is assisting organizations to transform innovation, collaboration, learning and leadership. 

How Digital Changes Business Next – 2 Minute Video