Wednesday, May 17, 2006

Innovate or Die - Culture

Create a culture that supports innovation
Again from Geoffrey Moore, this time on the importance of top management fostering innovation:

To be valuable from a business point of view, innovation must provide a deviation from the norm that creates differentiation in the company’s offering which in turn leads to customer preference at the time of a buying decision. In this light, the big challenge may not be coming up with the initial deviation—there are usually lots of good ideas in play. No, the real challenge is coming up with all the supporting innovations that reinforce the initial vector, aligning all the other functions in your company to reengineer their processes in such a way as to further accentuate the new value proposition, thereby creating a sustainable differentiation that can generate deep and lasting competitive advantage.

This doesn’t happen in creativity labs or at offsites, although it can gets it start there. Such systemic reinforcement of a single vector of differentiation represents instead a deep commitment from top management to align the entire enterprise, supported by a careful cascade of strategy down through each function, each being asked to show how it can reengineer some aspect of its work to further the differentiating effort. Such plans are then reinforced through resource allocation prioritization, through balanced scorecard metrics, through compensation incentives, and through constant reiteration of the differentiating line of innovation being pursued.

People like to say that innovation has to bubble up from below. Maybe at the start. But lasting differentiation cascades down from above.

Sybase has been operating in the deployment zone rather than the inventor zone since the days of the PowerSoft merger. (Geoffrey Moore notes that companies in the deployment zone "typically must acquire their inventions to keep them thriving"). Indeed, the PowerSoft merger may have been the sign of the beginning of that shift. In order to accomplish the distinctive innovation necessary to reinvigorate the PowerBuilder product, the company must be willing to take more risks than it has in the past and be willing to see the results through for the long haul, even if the initial consequences are negative. Again from Geoffrey Moore:

One of the prime tenets of Dealing with Darwin is that established enterprises must pursuer a single vector of innovation so intently as to leave their competitors behind.


The answer is not pretty. Undertaking a new vector of innovation during a decline in your traditional vector’s performance exposes companies to something we call “the nasty bit.” Basically, the old engine runs out of steam faster than anticipated, and the new engine is slower to ramp up, and so you steal a bit from the future to prop up the present, and then you still a bit more, and then a lot more, all to prop up an increasingly precarious present. And eventually you miss, and miss by a mile, and blame Wall Street’s quarterly performance orientation for the fall.

That’s the bad outcome. The good one is not a lot better. It says take your miss early, suck it up, and get through the nasty bit as fast as you possibly can. Pick the new vector, commit like crazy to meeting its new demands, and align them with your legacy wherever possible for additional force. But make no mistake, you are going to take a hit, and the best you can do is explain it properly to the constituencies that care the most about you—your customers and your employees. As for shareholders, don’t kid yourself. There are no more long-term shareholders. Your stock will tank. If it really tanks, and you can swing it, buy back in, especially if you have strong faith in your path forward.

Not to do so it to continue to trash around, which will still results in decline, just at a slower rate. As Geffrey Moore notes:

Innovation, in other words, should be thought of as a vector. Companies need to innovate in a particular direction and continue to proceed in that direction until their competitors either cannot or will not match their efforts. Alas, most companies do not. Instead, like disoriented hikers, they innovate a little bit in this direction, a little bit in the in the other, going a mile north, then a mile east, then south and west, ending up back where they started, having exhausted their resources while achieving nothing.

And from Kathy Sierra:

Making only incremental improvements won't work today, not with the gazillion competing products and services all fighting for attention and offering pretty much the same perceived benefits. Just keep being brave and most importantly--when you start to have doubts about how far out-there you should go, and you're imagining how the critics will burn you alive, just remember that the worst thing is being in the Zone of Mediocrity. That's what we should all be afraid of.

Creating passionate users is NOT about finding ways to make everyone like you. It's about finding ways to use your own passion to inspire passion in others, and anything with that much power is bound to piss off plenty of status-quo/who-moved-my-cheese people. Bring it on.

Eric Lundquist (editorial director of eWeek) notes that a culture of incrementalism seems endemic in the software industry:

The industry could use some of those big directional statements. We are in a current era of what I'd call incremental managers rather than visionaries. Incremental managers measure everything, compare themselves to any possible industry benchmark they can find, and champion success measured in gaining a half-point of market share or cutting a few heads out of the corporate pie in the name of efficiency. Bean counters have their role in a company, but they are not the ones who are going to inspire the troops to accomplish the next great goal.
The same angst that appears to be part of the Microsoft psyche also can be found in other companies tied to endless rounds of incremental product upgrades. Maybe the rise of managerial incrementalism also has touched off this minimalist approach to technology improvement. Even in the Web arena, where you could argue that the desire to hit a home run rather than make a career out of base hits has landed, the incremental approach appears everywhere.

Sybase need to stop concerning itself with incremental improvements to its product and start looking for the distrubtive innovative technology it can introduce that will help it recapture mindshare. That's what the DataWindow was when it was first introduced, what we need is another technical leap like that.

1 comment:

Mark Maslow said...

"Sybase need to stop concerning itself with incremental improvements to its product and start looking for the distrubtive innovative technology it can introduce that will help it recapture mindshare."

And what would that be? I'm having a hard time imagining. In fact, can you think of any disruptive, innovative technology that was introduced by a large, established software company? Seems to me that these kinds of things tend to be introduced to the world by a few clever people who have a different vision, and, if they become successful, they end up selling out to a big company (as when PowerSoft sold out to Sybase) or their ideas are incorporated into developing standards (as Hibernate heavily influenced EJB3). I don't see large, established software companies being the entities that drive innovation. Do you think Sybase is different?