Innovation – Simon Terry

Taking Disruptive Solutions to Market

Posted on 10/09/201807/04/2020 by simongterry in Future of Work, Innovation, startup, Strategy

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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:

A 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.

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.

Who is that exactly?

Posted on 02/04/2016 by simongterry in Uncategorized

One of the most important questions to ask in any leadership conversation is “Who is that exactly?” Getting beneath the opaque references to people is important to bring real human impacts to the foreground in decision making. Human behaviour is richer and more complex than segmentation and averages can show. Importantly, a specific conversation about people can also surface other impacts, alternative approaches and bias hidden in decisions.

The Opaque Other

Politicians love opaque phrases to refer to their opponents: ‘the 1%’, ‘big business’, ‘immigrants’, ‘refugees’, ‘special interests’, ‘leaners’, ‘those people’, and so on. The value of an opaque phrase is that avoids the risk of conflict with the current audience and builds a sense of conflict with an Other that they use to unite that audience. Demagogues have been threatening audiences with an Other since politics began. In an age when sexism, racism and overt discrimination have become less acceptable, the Other needs to take on a more opaque form. Usually when confronted with specific examples or challenged to name who exactly they mean, politicians duck and weave to avoid being more specific. Who they actually mean can be quite surprising to the audience.

The Opaque Other at Work

The same opaque conversations have drifted into business and social conversations too. It is not unusual to hear that a particular decision will have an adverse impact on ‘retention’, ‘a small segment of customers’, ‘stakeholders’, ‘some performance indicators’, ‘poor performers’ or even just ‘employees’. Behind each of those opaque phrases are real human impacts often on a scale that is far larger and far more important than the phrase indicates.

Asking “who is that exactly?” lifts the curtain on that obscurity and enables a better quality decision. Understanding specific individuals impacted can reveal unintended consequences beneath the averages. Percentages and other statistics are driven by real human decisions by specific customers. I have seen examples where organisations have approved decisions like changes to customer loyalty programs that have a forecast of a minor uptick in customer churn, only to discover later that it adverse impacted the most loyal and most profitable customers. The business impact was far worse than expected.

Equally changes to organisational structures, processes, performance management, leave, flexible working and other HR policies rarely impact employees equally. While they may looks so in the data used for business decisions, real human employees are rarely fungible. To consider one example, a decision to ‘spill and fill’ a management role in a restructure had a devastating consequence on the business because of the experience that was lost as employees took their talents to market and the market lacked of talent to fill a sudden large demand for lost experience. Had people considered individuals in both the roles and the market first a better decision could have been made.

If you want greater collaboration and innovation at work then you need to get beneath consideration of the opaque bucket called ‘our employees’. Innovation and collaboration are different for specific employee. They have different meanings, benefits and costs to different people. A successful strategy focuses on real individual employee needs to achieve the organisational outcome.

Turning your conversation to consider the specific people impacted and ensuring that you understand them well before making a decision is important in any conversation. Importantly this is also a key step to make sure the decision is inclusive and not divisive. The consideration may not change the decision but it will make everyone more aware of the risks and impacts. The consideration will also improve the quality of any engagement you have with impacted people as discussions move into implementation.

Asking the simple question “who is that exactly?” will help you to consider the complexity of real people.

A Simple Visual History of Digital Transformation

Posted on 14/02/201606/02/2017 by simongterry in Future of Work, Innovation, Strategy

Since the Mosaic Browser helped introduce the internet to the world, we have experienced a digital transformation of business. We had digital activities in our organisations before. We had already spend almost 50 years computerising processes. However, the digital connectivity of the internet began more radical change. Here’s an overly simple graphical reminder of elements of that journey.

We began by creating digital channels to connect our organisations to their customers. The website began with simple digital brochures and basic contact information. Very quickly our websites became richer and more valuable. Innovation began outside the organisation that showed the way for all subsequent phases of digital transformation.

We added processes to support the customer interactions. In many cases these processes were new, partial and designed solely to support the new digital channels.

We saw potential in these digital processes and started to apply them more widely. These processes worked in the midst of our legacy process and often in unconnected ways.

As the breadth of our digital channels expanded and we needed to manage new social and mobile channel needs, we needed a dedicated digital team to manage the expanding offering and to help integrate the core digital processes and infrastructure required to support growing digital ambitions.

With a digital team to advocate and lead the way on growing digital opportunities, we saw digital interaction takeover much of the electronic communication in the organisation and new integrated digital processes develop in supply chains, shareholder & community management and other forms of stakeholder engagement. APIs began to standardise digital communication formats in an increasing way for organisations. Organisations could leverage vast amounts of data on interactions and increasingly on activity across the organisation.

With digital interactions dominating & pressure to focus on core business activities, organisations began to become more aware that they operated in digital networks, connected to customers, suppliers and other stakeholders. Importantly, it became increasingly obvious that these networks connected all stakeholders reducing transaction costs and increasing transparency. Most dangerously these networks & data flows gave competitive advantage to those most able to leverage digital technologies in disruptive ways.

Seeing potential in connectivity, new and existing organisations saw the ability to focus on platforms that connected system players, creating new value and disrupting the traditional business of intermediaries. These platforms were increasingly agnostic of whether they ran on a computer, a phone or another device, giving them greater geographic and temporal reach. We began to connect all processes & devices into networks to leverage the power of information. Concepts like employee, contractor, supplier and customer had less secure meaning in a networked world as chains of connectivity ran in all directions & right through the organisation.

With platforms and networks running through and beyond the organisation, people began to explore the opportunities in new ways of working using digital. The boundaries of organisations no longer constrained the boundaries of work. Seeking to retain talent, leverage information more effectively and create greater agility, organisations experimented with new digital ways of working and organising work.

This digital transformation has only just begun. There are many more phases ahead. The innovations and experiments of organisations will take us even further into exploring the potential of globally connected digital networks.

Posted on 11/01/201620/06/2016 by simongterry in Uncategorized

What an abyss of uncertainty whenever the mind feels that some part of it has strayed beyond its own borders; when it, the seeker, is at once the dark region through which it must go seeking, where all its equipment will avail it nothing. Seek? More than that: create. It is face to face with something which does not so far exist, to which it alone can give reality and substance, which it alone can bring into the light of day. – Marcel Proust

The Madeleine

The madeleine is a delightful cake and an ideal inspiration for Proust’s great remembrance. Each madeleine depends on a series of transformations. There are many variations on the basic recipe but they all involve these changes to achieve the final result.

First sugar and eggs are beaten until pale and doubled in volume trapping air.

Then butter and flour are gently folded in to form an airy batter.

The batter rests. This is the step that takes confidence and daunts the beginner. However waiting to the right time thickens the batter to the consistency of a fine mousse.

Lastly the heat of the oven sets the batter into light & fragrant cakes.

The Transformations of Innovation

When we confront uncertainty and seek to create innovation whether in knowledge, a product or a business, we must follow similar series of transformations. We must create new ways forward ourselves by taking the uncertainty and transforming it.

We must add volume: if we don’t know then we need to seek, explore and learn. We need to add to our uncertainties before we can resolve them. We need more context and bigger systemic view to form new knowledge, new services or paths forward for a business.

We must create structure: when our expanded ideas begin to collapse under their weight and we doubt anything useful will come we need to start adding structure. Hypotheses, examples, principles, systems and process to support our new ways.

We need to use time as an ally: Not every new idea should be tested immediately. Many do. Some need to mature. Some need more work. Some need to meet the right circumstances. We need to use this time with confidence to enable our ideas to strengthen. This is not passivity. This is the work. We need to be ready to act when the ideas are ready to test.

We must test our innovation in fire: Testing is the only way to discover the flaws. We may fail and need to start again. The obstacles are the work. We might succeed and be able to continue testing all the while to ensure we remain on track to something better.

These transformations of innovation are not easy. These transform us as much as our innovation. They make us ready for success. They are the work we must do to surface great new ideas, products and businesses. We can’t skip steps. We can’t race ahead. We must just stay at our work of creating the future.

Ten times over I must essay the task, must lean down over the abyss. And each time the natural laziness which deters us from every difficult enterprise, every work of importance, has urged me to leave the thing alone, to drink my tea and to think merely of the worries of to-day and of my hopes for to-morrow, which let themselves be pondered over without effort or distress of mind.

And suddenly the memory returns… – Marcel Proust

What Kind of Community Do You Have?

Posted on 06/01/201617/08/2016 by simongterry in Collaboration, Innovation, Strategy

Enterprise Social Networks reflect the organisation’s culture and the maturity of collaboration in that organisation. As collaboration matures, different modes of engagement arise. Higher levels of engagement aligned to the strategic objectives of the organisation are fundamental to the growing value of collaboration for any organisation.

Connect: The Directory

Many organisations don’t create much community in their networks. Networks or collaboration features imposed without thought or support will often languish. Without clear strategic rationale for collaboration in the organisation, their efforts create a new directory of employees (In many cases, a directory of only those who adopt). The collaboration features are used to create a social profile for individuals and to help people find others using the knowledge of those in the network.

Share: The Salon

When people are freely sharing ideas & their work, the level of engagement in the network rises. The community begins to resemble a salon. A salon can be an inspiring place filled with insightful knowledge and witty repartee. However, it can also be dominated by personalities, expertise and narrow schools of thought. Sharing knowledge is an important step on the journey of collaboration and a foundation for greater connection but posts with links is only an entry level for the human potential of social collaboration.

Solve: The Universal Genius Bar

When trust and engagement is high enough, people will see a community as a place to solve their work and personal challenges. Like a Genius Bar, the community brings now just expertise and ideas, but solutions in the form of resources, processes and other ways to help drive change in the organisation. Well managed communities will be universal in their ability to reflecting the strategic intent of the organisation and the breadth of its people’s interests and purposes.

Innovate: The Platform

Successful cultures of innovation are those where people have a platform to which they can take ideas for development and trial. They also leverage the value of that platform as a way to track, understand and refine new ideas and those in development. When you have an innovation platform built on a rich level of engagement of all your employees, then the value and pace of change, innovation and continuous improvement is accelerated.

Questions to consider:

Where does your organisation sit today in terms of the nature of the activity in your enterprise social network or other collaboration platforms?
What level of collaboration fits the culture of your organisation and its strategic goals?
What are the modes of collaboration that will help your organisation best achieve the value it seeks from bringing its employees together?
How have you authorised and enabled people to drive change and to collaborate in your community?
How can you move your organisations network from a Directory or a Salon into more valuable levels of engagement?
Do you have the leadership, community management and the change agents necessary to build trust, role model change and develop engagement?

The Value Maturity Model and its supporting tools are ways to help organisations plan and execute the development of strategic value in collaboration through enterprise social networks and other communities. For more information on the Value Maturity Model and how it can help you develop collaboration, please contact Simon Terry.

Inconceivable

Posted on 16/12/2015 by simongterry in Uncategorized

The idea that you discount is the innovation someone will use to disrupt you.

[Vizzini has just cut the rope The Dread Pirate Roberts is climbing up]

Vizzini: HE DIDN’T FALL? INCONCEIVABLE.

Inigo Montoya: You keep using that word. I do not think it means what you think it means

From the movie The Princess Bride

Many organisations feel comfortable that the prospects of disruptive innovation are limited. They view their history, their client relationships, their propositions and their position in the market. With a view back into history, they cannot conceive how anyone could do better. They discount the threats and the opportunities of innovation.

Ernst & Young estimated that in the fourth quarter of 2014, global venture capital investment was $86.7bn. That money is exploring opportunity in many sectors previously regarded as too difficult for startups like health, government or financial sectors. For example, the funding for startups targeting financial technology (or fintech) has grown exponentially in the last 3 years. That’s a lot of enterpreneurial dreams that are being backed with capital. The goal of those startups is to do what is inconceivable to other organisations.

Innovators don’t look backward as to what can be expected from the past. Innovators create their own path through difficulties and challenges in the pursuit of new & different ways. They know there is competitive advantage in being the first through into a new concept and that the doubts will hold others back. They also know that the surprise of a new innovation will often paralyse the incumbent players who go through a grief-like cycle of denial, anger, delay, bargaining and finally acceptance that a response is required.

Explore the inconceivable, ridiculous and stupid ideas. Break the bounds of your organisations traditional ways of seeing and doing as you explore innovation. You will discover you can conceive a lot more than you expect.

Disrupt the Metrics #disruptsyd

Posted on 25/09/2015 by simongterry in Uncategorized

Can your people redefine success? Disruptive innovation changes the metrics of success.

Yesterday working on design thinking, I came across a great article on an Intuit’s lessons from measuring design thinking. A key insight that struck Intuit was that the value of design thinking is the ability to use research and empathy to redesign what success means and change the metrics of projects. The measures of success in Intuit were no longer fixed.

I am sitting today in conversations about digital disruption at the Disrupt Sydney conference by the University Sydney Business School Digital Disruption Research Group. What interests me is how often we accept assumptions as to the measures of success. We talk about disruption with traditional business measures: revenue, scale, market share, employment, productivity, efficiency, profitability, etc.

Disruptive innovations redefine effectiveness. They challenge traditional measures of success using deeper insights on what matters for real success. They don’t accept the prevailing and predetermined logic of success.

New measures already appear in conversations around us: bump factors, percentage of e-commerce participants, community participation, density of interactions, social good, global reach, food miles, transparency of business models. How do we use these in our work?

Do your employees have the opportunity to redefine success? If they can’t discuss what success means, there will be opportunities and threats that they can’t respond too. How do you create an ongoing conversation about new measures?

Use Digital Capabilities to Build Digital Capabilities

Posted on 07/07/2015 by simongterry in Uncategorized

Our traditional management models die hard.

Many organisations are starting to consider how they build new digital capabilities like agile, hypothesis-based experimentation, design thinking, analytics and collaboration. Yet when they start to plan these changes to more digital ways of working, they use management models from pre-digital management:

transactional approach to interventions
solutions defined by expertise
linear implementation approaches
waterfall project plans
push compliance and competency models focused on supply of new skills to employees
narrow delivery models using only learning and classroom learning
limited if any measurement of the changes

These approaches seek to make organisations ready for more digital management using the methods of traditional management.

Digital Dog Food

We can do better than this. We can start by asking projects to build digital capabilities to eat their own dog food. If nothing else, they will learn on behalf of the organisation the challenges and opportunities of new digital ways of working.

New Digital Capability Building

Projects to build digital and responsive capabilities in organisations can be role model projects for those capabilities. Taking a leaf from the digital tool suite challenges those building capability to consider capability building that offers:

many paths on the learning journey as part of career paths and achievement of learner goals
mobile options, social learning and performance support to sustain learning in the digital work place and wherever is convenient for employees
offers people pull and push options across the range of 70:20:10 learning with options also for the depth of content and timing of learning experiences
encouraging people to seek out and share learning options from the depth of learning available in their personal networks
engaging programs built from deep insights into the change and capability challenges for employees in working in new ways

New Digital Delivery

The projects to build new digital capabilities themselves can adopt digital approaches by shifting to:

agile delivery
minimum viable solutions
hypothesis-led test and learn iteration
considering needs for adaptive change and related changes on the wider organisational system
encouraging learners to act as a community to support successful delivery of the project goals.
strong analytics supporting not just the delivery of learning but also the strategic contribution of the capability building
leveraging collaboration and networks in and outside the organisation to build capabilities, particularly in making smart decisions on what to build and what to buy.

More Effective

Working on transformation projects in these new ways won’t always be efficient. It definitely won’t be easy. However, using the tools and approaches of digital management enables organisations to learn and evolve their goals through the process of transformation. This learning will be the path to step changes in effectiveness and a better match to employee and organisational needs. At a minimum, it helps ensure that the project creates a team of highly capable change agents to help drive the next phase of the journey.

Corporate Chaos Monkeys

Posted on 26/05/2015 by simongterry in Uncategorized

The resilience of your organisation depends on the people willing to risk breaking things.

Bringing Chaos

Chaos Monkey is an open source application created to test the resilience of web services. By intentionally creating failures in random ways, chaos monkey helps engineers discover where there are shortcomings in their systems.

Many organisations have business continuity tests to help them learn how to manage failures. These exercises can be valuable learning experiences when done well. However, many are also predictable, formal and artificial. (If your business continuity test isn’t allowed to fail you won’t learn anything) Further many of these tests don’t go far enough because they test the continuity of defined current systems and processes internally, not the resilience of these in a wider dynamic ecosystem.

Chaos at the Centre and the Edge

How do create a corporate chaos monkey that helps your organisation learn how to improve its resilience in a rapidly changing environment?

Experiment.

Creating a way for your people to run small scale tests of new ways of working, new processes, new products and services acts as a chaos monkey in your corporate environment. Lots of change and experimentation will expose your weaknesses and keeps you engaged with the dynamic environment around your organisation. This is the usually reason that wide scale experimentation is resisted in large organisations. However, experimentation lets you learn and build capability to fix issues when they are still small. Experimentation builds resilience.

In most complex systems, the traditional approach of defence from failure will fail anyway. Building the capability to learn and adapt to failure is far more valuable than a Maginot line of corporate defence. Experimentation will help supply the needed chaos at the centre and the edges of your organisation.

Once you accept that a little chaos is required you need your own monkeys to bring chaos. Find and embrace your Change Agents. In every organisation there is someone willing to risk breaking something to make the world better. Change Agents are the corporate chaos monkeys.

Every responsive organisation needs its Change Agents to bring just the right amount of chaos, adaptation and learning.

Can a large organisation be responsive?

Posted on 20/03/2015 by simongterry in Uncategorized

Steve Blank, a lean start-up expert has elegantly described the differences between start-ups and traditional large organisations.

“the 21st century definition of a startup: A startup is a temporary organization designed to search for a repeatable and scalable business model…
The corollary for a large company is: A company is a permanent organization designed to execute a repeatable and scalable business model.”

These definitions are useful and highly accurate. Most large organisations have chosen to focus on efficiency in execution of a business model as the rationale behind their efforts.

However, it is important to note that a corollary may follow but does not always preclude other logical alternatives. Breaking apart Blank’s structure there are a number of different elements in play:

the duration of the organisation: temporary vs permanent
the process of the organisation: search vs execution of a repeatable and scalable business model
an implicit difference between effectiveness of a search and efficiency of execution

Importantly there are other options that could be chosen for these spots in Blank’s definition:

Rather than looking at duration we could look at the ability of the organisation to change – adaptability with a scale from the highly adaptable startup to the fixed processes and systems of efficiency oriented large scale organisations.
Rather than focusing on process efficiency we could focus on effectiveness of process at achieving purpose – no scalable business models is permanently enduring; they must be subject to eternal change to be more effective and to better achieve the outcomes for which people came together.

From this we can see that there is at least one more logical model to chose. Let’s define a responsive organisation thus:

“a responsive organisation: is an adaptive organisation designed to search for more effective ways to execute a repeatable and scalable business model.”

Blank is right that you can’t behave like a start-up if you are trying to be efficient in execution and startups should not be judged by efficiency of execution. However there are more than two models for an organisation to choose. Large organisations can be responsive but they need to choose to adapt and be more effective.