The need for Ad hoc, Autonomous Business Entities for Disruptive Innovation

One of the lessons of the disruptive innovation research is that when a business requires a new business model, i.e. new processes, new resources and new values, it must be lodged in an ad-hoc, autonomous entity. Building the disruptive venture within the same organization will simply lead to the same result as Nokia: it will fail, swallowed by the power of the existing model, and it won't be for lack of trying. Millions, if not billions of dollars will add to form, but won't deliver actual goods.

Silberzahn

Cargo cult start-ups and cargo cult agility...

Adding a foosball in your lobby won't make you a startup company anymore than building wooden planes recreated the flow of American goods in Guinea sixty years ago. - Silberzahn

Cargo Cult

A superstitious belief that practicing rituals or adopting certain practices will bring in the desired results. Often used in the context of Agile and Digitalization. Companies keen on seeing the lofty goals of agility and ditalization, mimic the practices (Hiring thousands of software programmers doesn't make you a software company -- example Nokia, which failed to make the transition from hardware to software; another example is hiring tens of Agile consultants, Coaches and practicing Agile rituals hoping to reimagine a new world of rapid feedback and value delivery!) 

"Soon after WWII, anthropologists in New Guinea noticed an unusual phenomenon: tribes deep in the interior of the country were building full-sized ritual airfields and airplanes out of bamboo, grass, etc. 

Anthropologists soon discovered that withdrawal of military forces had created a scarcity of modern technological goods, and the tribes, under the influence of so-called “Cargo Cult prophets”, were converting communities’ desires for these possessions into the external forms that had brought them in the past. 

The hope that these prophets shared with their followers was that if the correct external forms were present, the actual goods associated with them would arrive." - Forbes.

Effectuation

Effectuation is the the processes of opportunity identification and new venture creation...

https://philippesilberzahneng.wordpress.com/2017/10/16/effectuation-how-entrepreneurs-really-think-and-act/

Transformation - distinguishing between strategy and execution

• One of the worst mistakes of transformation is distinguishing between strategy and execution.
• Strategy is designed by the executive management in collaboration with premier consulting firm, and Execution is delegated to second-rung consulting firm, as an after thought.
•  The strategy thus is a romantic and mechanistic conception. 
• It soon turns out to be - "Our transformation strategy is perfectly clear, but we had a big execution problem",
• This leads to stalling of transformations in large companies and causes a strong push from the top management and strong tensions within the middle management.
• The strategy is not executed because it is not a true reflection of the capabilities of the organization. 
• If strategy execution is a problem, then execution is a strategic issue that strategic thinking has wrongfully ignored.
• To distinguish Strategy from Execution is to exempt top management of any responsibility in the transformation. 

Courtesy: Philippe Silberzahneng

Entrepreneurial Posture

• Employees are bombarded with messages praising the entrepreneurial posture. Innovate! Get started! Be brave! Accept to make mistakes! Be like Google! Take the plunge! There are 3 problems associated with this:
• This is a bad prescription, since hoping for everyone to become an entrepreneur is a fantasy.
•  It is counterproductive. Creative Chaos is not conducive to activity at all levels. 
• The entrepreneurial imperative is stressful and humiliating. Employees are already overworked and immersed in everyday problems, under pressure for results. Not everybody can be a superhero.
• Entrepreneurial mindset is indeed helpful, to put organization back in motion. 
• There is a need to abandon the super-hero connotations associated with Entrepreneurship. Entrepreneurs are ordinary mortals, with a deep affinity towards partnership, collaboration to do new and useful things.

Courtesy: Philippe Silberzahneng

Disruption and Speed of Change

• Disruption develops in a non-linear way -- first almost invisibly for years
• Then it suddenly, after it has reached a tipping point, begins to be "noticed"
• Incumbents' initial reaction -- is "Why Worry"?
• But when it suddenly accelerates, sets a panic in the incumbents.

A disruption is therefore a process, not an event. It emerges and develops, sometimes for years, without any noticeable impact, at least from the point of view of the incumbents, who thus tend to dismiss it. As time passes without visible impact, the dismissal seems more and more justified when, after sometimes a long while, it goes into accelerated mode. And then it generates shock and surprise, but this shock and this surprise are entirely self-inflicted. They result from the inability from incumbents to appreciate the true non-linear nature of the disruption.

Courtesy: Philippe Silberzahneng

Why Organizational Change is Difficult...

Adapted from Phillipe Silberzahneng's write up.

"When an organization’s capabilities reside in its resources (initial stage of startup), change is easy: the founders decide to change, and the organization can pivot. It is the strength of startups to change very easily when the founders are aware of the need to change their model. But when, at a later stage, an organization’s abilities reside in its processes, and even more so when they reside in its values, change becomes extremely difficult."

Changing values is difficult -- for e.g. most of us don't exercise regularly or eat balanced diet despite knowing its benefits. It's a deep change in lifestyle that affect the present commitments. It's the same for companies affected by disruption.

Changing values of an organization is titanic because it entails undermining the legacy long before it allows the birth of new one.

A solution to this is create an Autonomous Entity that takes care of this disruption.

Adherence to Reality - The Management Challenge

The relationship to the world is the combination of two things: the attitude to the world and the experience of the world. The attitude to the world is the result of our mental models. It is the way we see the world, the reality, with our assumptions, our beliefs and our values. The experience of the world is about how we act in the world, how we change reality. It is based on our principles of action. Attitude to the world and experience to the world are naturally closely linked.

https://philippesilberzahneng.wordpress.com/2018/10/24/adherence-to-reality-the-new-challenge-of-management/

Nokia failed successful transition to software

Nokia dominated the world of electronic mobile but failed to make a successful transition to software. 

Sustaining and Disruptive Technologies

Courtesy: MIT

Sustaining technologies are technologies that improve product performance (technologies that help improve a product that has a well established market). Most companies are familiar with this. Companies have problems with Disruptive Technologies. 

Disruptive technologies are "innovations that result in worse product performance, at least in the near term." They are generally "cheaper, simpler, smaller, and, frequently, more convenient to use." Disruptive technologies occur less frequently, but when they do, they can cause the failure of highly successful companies who are only prepared for sustaining technologies.

As the above graph shows, disruptive technologies cause problems because they do not initially satisfy the demands of even the high end of the market.  Because of that, large companies choose to overlook disruptive technologies until they become more attractive profit-wise.  Disruptive technologies, however, eventually surpass sustaining technologies in satisfying market demand with lower costs.  When this happens, large companies who did not invest in the disruptive technology sooner are left behind.  This, according to Christensen, is the "Innovator's Dilemma."

Large companies have certain barriers to innovation which make it difficult to invest in disruptive technologies early on. Being industry veterans means that they have set ways in approaching new technologies.  Baggage from precedents (such as equipment, training, procedures) hinder a quick response to disruptive technologies.  Large companies also have an established customer base whom they must be accountable to.  These customers often ask for better versions of current products rather than completely new technologies.  Customers are a substantial barrier to innovation.  Finally, companies make decisions according to their place in the value network--or, to put it simply, companies make decisions according to where they are in the market.

YAGNI - You Ain't Gonna Need It (Now)

• XP Practice
• If you need a software capability in FUTURE, you SHOULD NOT built it right now because – You Ain’t Gonna Need It NOW.
• YAGNI means practice Simple Design

The real problem with Agile

The real problem with Agile is when frequent references to the Manifesto and fanaticism surrounding it isn't too different from religious fanaticism -- a generation venerating maniacally on written scriptures that are considered immutable.

Disruptive Innovation Explained

Agile is not the solution for lack of innovation...

Some very interesting thoughts (in the context of innovation)...

1. agility is required, but "Agile is not a miracle solution to lack of innovation."  
2. Individual awareness of disruption doesn't readily translate to organizational awareness at a sr. mgt.
3. Adaptation takes time.
4. There is an inherent dichotomy in economies of scale and agility.
5. "agility works in risk situation where possibilities are small and known beforehand; but not in uncertainty where no. of possibilities are infinite.
6. "agility is a form of passivity with respect to its environment".
7. Innovation is not adaptation to the environment, but to transform it.
8. The advantage of Startups is not agility, rather it is that they don't have a legacy to protect (Innovator's Dilemma)

https://philippesilberzahneng.wordpress.com/2017/09/13/innovation-agility-is-not-what-your-organization-needs/

Agile Disruption

Courtesy: Russ Fletcher, Slideshare

Excerpts from Innovator's Dilemma

Sears Roebuck

• Sears Roebuck -- retailer in the US and rest of the world
• 1880s thru early 1990s
• Started off as Catalog of Watches and Jewelry
• IPO in 1906. By 19060s it was the largest retailer in the world.
• Started off selling single product category
• The retail sector was overpriced. Sears started selling anything and everything. You could order from comfort of your home (like we do from Amazon).
• Pioneered several innovations critical to retailing -- supply chain management, store brands, catalog retailing, and credit card sales.
• As of 2016 its main competitors were: Walmart, Target, Kohl's, J.C. Penny, Macy's, Home Depot, Lowe's, Best Buy, and Amazon.
• 1984 together with IBM created Prodigy - a pre-Web online web portal. Built on a private network; was distinct from Internet.
• Simplified structure in 1992; discontinued catalog in 1993, sold Prodigy in 1996; 1999 back to retailing roots.
• Filed for Chapter 11 Bankruptcy on 15th Oct 2018.
• 46 Unprofitable stores were to be closed by Nov 2018.
• It will begin closing additional 142 stores end of year
• It missed the advent of discount retailing / mass merchandiser (e.g. Aldi, Lidl, BigW, KMart, Target, Costco, Daiso, Matalan (Bradley stoke), Home Bargains (Bradley stoke),  -- offer wide assortments of goods with focus on price rather than on service) and home centers (Large hardware store selling tools, building materials, and other household items )
• Sears allowed arrogance to blind itself to the changes taking place in American marketplace
• Couldn't compete with Catalog Stores ( e.g. Argos UK)

Other Leadership failures

• IBM dominated the Mainframe market but missed by many years the emergence of mini computers.
• Digital Equipment Corporation (DEC)
• Xerox long dominated the Plan-paper Photocopiers business and yet missed the huge growth and profit opportunity for small talbletop photocopiers
• 
  
• 
  

In both DEC and Sears' case, the decisions that led to their decline were made at the time they were widely regarded as being astutely managed firms; and being among the best companies in the world.

Resume Driven Development - RDD

RDD is the practice of the developers sliding their own features to try out the latest trend and hip technology. 

Situational Leadership...

• Agile project management is more about leading a team than managing a team (Cohn).
• Understand what the team needs in terms of leadership.
• Servant Leadership is more about Leadership than being the doormat of your team.
• Agile leadership is situational (depending on the set of circumstances).
• Agile works because the team is empowered - a lot of responsibility is delegated to the team (Mackenzie).
• Situational leadership is recognizing that there is no right way of leading a team, but effectively bounce between the following styles:
• Directing: Tell the team what to do
• Coaching: Sell an idea so the team will do
• Supporting: Work along with team to do
• Delegating: Delegate to team to do

Map the above with Tuckman's phases of team development - Forming, Storming, Norming, Performing, and Adjourning. You may start with a Directing approach as the team forms, and gradually as the team matures, coach, support and finally delegate.

Agile works the best when the team is in the "Delegating" Mode.

Agile Transformation Steps

It is very important to choose the right candidate projects for Agile Transformation. Too often you will lose credibility of the right projects are not picked up. There will be stiff resistance from teams if they don't see the value of transformation soon enough.

Co existence of old ways of working is another key factor. Ensure the new ways of working are comprehensively implemented. Most often allowing old framework to co-exist will undermine the efforts of agile ways / new ways of working. This may include the traditional documentation, phase reviews and documentation sign offs.

Key Agile Topics

Scrum Master
============

1.The purpose of top level scrum ceremonies
2.The value of observed practices during ceremonies
3.Resolve impediments external to the team
4.Write deliverable, vertically-sliced stories
5.“Turn up the good” through frequent retrospectives
6.Make work visible
7.Promote a psychologically-safe team environment
8.Model servant leadership behaviors

Product Ownership
==================

1.Product Manager / Analyst Role Evolution
2.Product Ownership
3.Customer Experience
4. NFR Overview
5. NFR Considerations
6.The Backlog
7.Value / Return on Investment
8.Technical Debt
9.Market Analysis
10.Product Design
11.Product Marketing Basics
12.Business Value Domain
13.Embedded End User Feedback

Agile Leadership
================

1. Team composition
2. Product ownership
3. Portfolio management / work intake
4. Customer experience
5. IaaS
6. Legacy system evolution
7. NFR and considerations
8. Talent management
9. Vendor management
10. Financial management
11.Dependency Elimination

The Coaching Habit - Michael Bungay Stanier - Tips

Questions Coaches should be asking
==================================

1. And what else?

Have you thought of
What about
Did you consider
....

Stop offering advice with a question mark attached.

2. What is the real challenge for you here?

Focus on the real problem, not the first problem

3. Stick to questions starting with WHAT -- 

DONT ASK WHY questions -- it will put the respondents in the defensive / OR it will appear or you indeed are solving the problem.


Example conversation
====================

Whats on your mind?

Is there anything else on your mind?

So, what's the real challenge for you here?

And What else (in most cases the person will still have something more to add).

Probe further by asking Is there anything else?

4. What do you want?

Untangle / differentiate the NEEDS from the WANTS

5. How can i help?

6. If you are saying yes to this, what are you saying no to?

note: acknowledge the answers you get. This will encourage the speaker.

7. What was most useful to you?

Horizontal and Vertical Scaling of Applications

Heart of Agile

Alistair Cockburn's Heart of Agile. Simpler way to adopt Agile taking all the clutter away.

Telematics

Product