Innovating at Internet Speed: How to balance speed and efficiency in the digital age

Transcription

1 Innovating at Internet Speed: How to balance speed and efficiency in the digital age Alan W. Brown Professor of Entrepreneurship and Innovation Surrey Business School University of Surrey, UK 11 th December

2 Agenda Motivation The Nature of Innovation Keys to an Agile Organization Summary 2

3 Quiz According to several sources, what was the only business book that Steve Jobs had on his bookshelf? How to get rich fast? 20 ways to boost your stock price? Who says elephants can t dance???? 3

4 The Innovator s Dilemma One of The Economist s Top 6 Business Books of All Time See: 4

5 The World in a Minute.. 5

6 Here come the Gen Ys Mobile digital world is upon us Gen Ys = the masters of the medium Integrate and analyze social, internet and mobile to drive insights

7 Smarter Products Require Innovative Systems Global interconnection across products, systems, applications and networks System of Systems Fleet and traffic management systems Smart grid hybrid / electric vehicle recharging Emergency services, vehicle diagnostics, and GPS / location services Integration of vehicle subsystems into a functioning automobile Systems Engineering Collaboration and visibility across diverse teams and disciplines 360 degree surround vision Driver assistance safety alarms Hybrid and electric vehicle control Softwareintensive Subsystems Adaptive cruise control Intelligent navigation Predictive collision avoidance Source: IBM 7

8 Software Development Sits Within A Complex Delivery Process! Write new software!! 8 8

9 A new project to deliver business critical software product release within 12 months BUSINESS NEED ESTIMATE 11 Months SCHEDULE LE See: Brown, Ambler, Royce, Agile at Scale: Economic Governance, Measured Improvement, and Disciplined Delivery, ICSE, May 2013

10 PROGRESS REALITY Traditional outcome 100% Integration Begins Late Scrap and Rework DESIGN REVIEW PLANNED TARGET ACTUAL DELIVERY 0% SCHEDULE

11 PROBABILITY INSIGHT Program parameters are delivery predictions Cost, schedule, effort, quality, Mean estimate = 11 MONTHS Area under curve = Probability of delivering in 11 to 12 MONTHS SCHEDULE

12 PROBABILITY COIN FLIP There is roughly a 50% chance of making the date 52 % SCHEDULE

13 PROBABILITY OPTION 1 Move out the date to improve likelihood of shipping? 95 % SCHEDULE

14 PROBABILITY OPTION 2 Decrease time estimate by Sacrificing quality or content? 95 % SCHEDULE

15 PROBABILITY OPTIMIZE Reduce the variance Improve likelihood of shipping 90 % SCHEDULE

16 OPTIMIZE Measure validated learning Reduce the variance ORIGINAL PLAN MINIMUM VIABLE PRODUCT INITIAL TARGET Uncertainty in stakeholder satisfaction Uncertainty in Plans, Scope and Design 16

17 INSIGHT Improving Software Economics VOLUME OF CODE Quality/Performance Integration first Manage scope Asset-based reuse PROCESS Steering Good practices Maturity Domain knowledge Resources = Complexity Agility * Collaboration * Automation 17 TEAMWORK Synchronization Skills Experience Motivation TOOLING Process enactment Measurement Instrumentation Manage complexity

18 Leverage Productivity Improvement Reduce Complexity Increase Agility Complexity Agility * Collaboration Improve * Add Automation Complexity Agility * Collaboration Automation Economic Impacts Productivity: 2x 10x Timeframe is Years Cost to Implement: 25%-50% Much culture change Productivity: % Timeframe is Quarters Cost to Implement: 10%-35% Some culture change Productivity: 15-35% Timeframe is Months Cost to Implement: 5%-10% Predictable Productivity: 5-25% Timeframe is Weeks Cost to Implement: <5% Very predictable 18 Organization Project Team Individual

19 Measures Critical aspects of measurement Measure Business-Related Team-Related Cycle-time reduction Quality Continuous optimization Time from initiation to delivery of first increment Time from initiation to project closure Production defects per 100 function points Process maturity level Build/release cycle time Sprint velocity Blocking work items Requirements tests Change costs over time Defect trends Change trends Integration trends Practice adoption Variance in cost to complete Productivity Function points per man-year Sprint burndown chart Release burndown chart 19

20 Why is Scaling Agile So Hard? Experience from many large-scale agile projects shows a similar failure pattern: The people break The tools break The governance breaks The customer breaks The financial controls break The organization breaks See: 20

21 The Changing Nature and Scope of Innovation Open Collaborative Multi-disciplinary Global 21

22 What is Digital Transformation? On Being Digital Vision, principles, strategy, roadmap The 4 layers of a Digital Transformation Infrastructure and technology Platforms and interfaces Organization and delivery People, communities, and clients Enablement Ecosystem Execution Expectations 22

23 How are Organizations Responding? A focus on agile change management and collaboration on a platform-based architecture Agile Change Management Accelerates time-to-value Recognizes individual achievement Accelerates Time-to-Value within the team Enables better understanding of and rapid response to the client-defined value proposition for a solution Organizes work efforts according to the principles of time-based competition Adds a management system focused on delivery acceleration Open Collaboration Increases collaboration while recognizing individual achievement Enables practitioners to build their reputations Moves focus beyond utilization Increases visibility of individual achievement Leverages the value driven by external input and open collaboration Platform-based Architectures Recognizes Encourages individual flexibility achievement in design and delivery Accelerates Time-to-Value within the team Allows evolution of the architecture based on service-oriented view Supports an eco-system of provides around a core set of capabilities Opens up access to a broad community through standard APIs 23

24 Why Agile? The Move to a Delivery Focus Traditional Project View Distinct design/build/delivery phases Distinct handoff to maintenance Requirements-design-code-test sequence Phase and role specific tools Collocated teams Standard engineering governance Engineering practitioner led Agile Delivery View Continuously evolving systems No distinct boundary between development, maintenance and deployment Sequence of released capabilities with ever increasing value Common platform integrated process / tools Distributed, web based collaboration Economic governance tailored to risk / reward profiles Business value and outcome led Hierarchical top-down decision making Main Drivers Team-based decisions and meritocricies Customers Experience Higher Quality Faster Time to Value Technology Exploitation Operational Efficiency Sourcing Economics 24

25 What are the Characteristics of Effective Agile Teams? Lessons from Software Development and Delivery 1. Produce a working system on a regular basis (for example every 30 days) 2. Work closely with stakeholders, ideally on a daily basis 3. Consistently deliver the highest possible business value on a regular basis 4. Create self-organizing, and disciplined teams working within an appropriate governance framework 5. Perform continuous regression testing, and use a Test-Driven Delivery approach 6. Regularly reflect, and measure, how teams work together and then act on these findings to improve in a timely manner 25 25

26 The Agile Organization Radical Management Co-created Value through Global Networks Rapid Decision Making Based on Analytics Social Architecture Real-time Feedback into Delivery Business Processes Globally Collaborative Teaming N=1 Personalize d co-created experience Business Analytics R=G Global access to resources and talent Technical Architecture Adapted from Prahalad and Krishnan, The New Age of Innovation, McGraw Hill, 2008

27 Why the Lean Startup Changes Everything! Agile Lean Startup Recognize we don t know solution.don t even know the problem Increment in weeks Increment in hours Continuous integration Continuous deployment Test in mock prod environment Test in production Deliver value monthly (2-3 sprints) Deliver value daily Done = Software ready to deploy Done = Validated learning Customer feedback Customer validation Certified scrum master Customer success manager See Steve Blank, Why the lean startup changes everything, HBR 2013

28 Moving to a New Management Approach See

29 Innovation Needs a Radical Management Approach Traditional management Radical management Purpose of the firm Produce goods and services Delight clients (& stakeholders) How work is structured How work is organized Transparency Bureaucracy & hierarchy Single big plan Tell people what they need to know Self-organizing teams Client-driven iterations Radical transparency How managers communicat e Impact on employees Top-down: Tell people what to do Only 20% fully engaged THINGS Interactive: stories, questions, conversations High productivity & continuous innovation PEOPLE

30 People Make the Difference In an environment of on-going change, agility is by far the greater driver of performance than effort or responsiveness This is reinforced by many studies e.g., Dan Pink s work on What Motivates People? Autonomy Mastery Purpose See: CIO Executive Board, Building the Change-Ready Organization, Sept

31 Community-based Innovation is key to an Open Strategy Community-driven approach to problem solving People working across geographical and organizational boundaries to confront today's most pressing challenges Enabled by: Open standards New intellectual property practices The Internet and collaborative tools It unites perspectives from a host of disciplines to: Rapidly solve business issues Accelerate technological advancements Stimulate economic growth Enable new business models 31

32 Organizations use both Open and Commercially Sourced Solutions Commercially Sourced Open Sourced Creating systems that are commercially sourced and innovative - intended to differentiate the vendor and deliver value to the solution end users Creating, maintaining, and enhancing software through open, collaborative communities driving evolution of standards and innovation of services delivered We are experiencing a new equilibrium 32

33 Innovation in Product Delivery Agility - Architecture Architecture = Big Up-Front Design Architecture = massive documentation Role of architect(s) Low perceived or visible value of architecture Adaptation versus Anticipation 33

34 Context Impacts Architectural practices 1. Size Size 2. Criticality Age of System Criticality 3. Age of system 4. Rate of change 5. Business model Rate of change Context Business model 6. Structural stability 7. Team distribution 8. Governance Governance Structural Stability Team Distribution 34

35 Toward Platform-based Architectures User-centric contribution and collaboration Use of social media and digital media Transparency in processes, practices, policies Lightweight web development practices Cloud computing architecture These are key elements of a Platform-based architecture See Tim O Reilly, Government as a Platform, June 2009, 35

36 Lessons from Successful Digital Technology Platforms Embrace open standards: they encourage innovation and grow the market Build a simple system - let it evolve Design for participation Learn from your users, especially ones who do what you don t expect Lower the Barriers to Experimentation Build a culture of measurement Celebrate Your Developers See Tim O Reilly, Government as a Platform, June 2009, 36

37 Summary How do you focus in a world of fast-paced change being faced by all organizations? Innovating at Internet speed requires Agile change management Open collaboration Platform-based architectures 37