Innovative Agile

23 Dec, 2011
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My motto regarding innovation is: being a first mover is a strategic choice, moving fast isn’t. Agile and scrum can help you move fast, so how can it accommodate innovation?

Getting a view on innovation
When a company fills in a portfolio tool like a Boston Consulting Group (BCG) matrix, it gets a view on its product market combination (PMC) portfolio. You can tell a lot about the company and its business from how a BCG matrix (*) develops over time. One of the most fun things in my eyes is the amount of question marks turning into stars. A question mark being a PMC in a high growth, low share section (e.g.; doing something relatively new), a star being a PMC in a high growth, high share section (e.g.; being successful in doing new stuff).

The amount of question marks in the portfolio illustrates the amount of newly launched PMC’s on to target markets. When you also consider the amount of ideas not becoming question marks, and turn this into a ratio, you could get some idea on how innovative the company is. Add to his the amount of question marks turned into stars and you really get a sense of outward successful innovation. I distinguish outward and inward innovation, because I believe that experiencing a commercial hypothesis to be proved wrong is at least just as valuable as seeing it proved right.
This doesn’t mean that innovation can’t be applied in other quadrants, just that it might not be the smartest thing to do when for instance handling dogs. In many cases adding features to cash cow products can be a brilliant strategy. Take for example razors, where adding more razorblades, self-adjusting blades and other sleight handling improvements constantly extends the product lifecycle.
Innovation flavours
To get an idea of how scrum could accommodate for innovation, first we have to get an idea on the various sorts of innovation like “additive innovation” out there. In general there are four forms of innovation a company can venture into:
Incremental innovation: small improvements leading to slightly better results
Additive Innovation: adding product features, customization, new products in existing business lines
Complementary innovation: creating new offerings new in current business, but adjacent to current product lines
Radical innovation: doing completely new things, unknown to business and/or target markets.
Using agile to suit innovation
In the following section I will highlight a couple of alternative ways in which you could use agile and scrum mechanics to shape and facilitate these forms of innovation:
Incremental innovation:
1. Spend a retrospective or a section on this product improvement; try to get in one small improvement each sprint. Maybe this will ease the team into providing more input for the backlog.
2. Agree with the team that every sprint every individual team member comes up with at least one idea to improve the product in some way.
Additive innovation:
1. Create spikes in sprints to prototype new features, validate these with customers;
2. Hold demo like meetings with your target audience; ask them what they think about the product.
Complementary innovation
1. Keep key options open, have stories worked out in two variations and do validate these paths in spikes and demo meetings;
2. Invest time in finding the appropriate product owner for the job. Market and customer knowledge is important here as the company is going to serve adjacent and different markets than before;
3. Take care that the entire DMU is taken into account in the story map. Also look at internal impact of providing new services and products, for instance customer service needs.
Radical innovation
1. Make sure the innovation team is freed from all organizational gravity. Pull them away from status quo and peer paradigms;
2. Reserve time for existing teams to work on a free format project. This could be a once every month time box of a day for example. It can be whatever they would like, as log as results are made transparent. Let them the same social objects as in scrum (boards, graphs, backlogs);
3. Take care that you have means to measure relevant metrics early on. Every addition should increase sales, market share and other relevant metrics. Use retrospectives to find root causes and steer through story map;
4. Keep all options open, incorporate A/B tests, multi-variant tests, prototypes, feature polls and so on. Sprint goals are hypotheses you would like to see validated.
What I love about scrum, is that it so lightweight and adaptable. On the incremental- to radical innovation scale, there is no step in which scrum can’t be adapted to accommodate for innovation while remaining to move fast.

The above list is just a brain dump of what I quickly came up with. I am convinced that there are many more creative ways in which we could adapt agile and scrum practices towards innovation. Please view this blog as an open invite to share your thoughts on this subject.
PS: Merry Christmas and a very Happy New Year!
(*)A BCG matrix says nothing about profitability of the PMC, so market share in a growth market could be labeled as a vanity metric. The matrix also builds on the premise that you know a market to put question marks in. Sometimes however you don’t know what your market is going to be. Furthermore, the BCG matrix can be filled in numerous ways depending on how you define for example the market scope.


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