In Agile terminology, the word sprint refers to a one- to two-week chunk of work, during which a programming team sets specific goals for itself and then works swiftly to achieve those goals.
When work is organized this way, in small and manageable chunks, brilliant and remarkable results have been achieved in the development of large software systems, the kind that run banks, airlines, health care systems, and even governments.
This is in direct contrast to the well-documented inadequacies of non-Agile approaches, which have led to extensive delays, cost overruns, and sometimes brutally terminal failure.
You would hope that the technology industry has learned its lessons by now. But you might be wrong about that. The state of Oregon, for example, recently cancelled work on its massive online health care exchange, Cover Oregon, and switched over to the federal government’s system, but not before paying $134 million to Oracle for its years of work on the failed project.¹ This certainly qualifies as an epic failure, but it is by no means unique in its epicness. Studies by Standish Group published in its annual CHAOS Report regularly find that nearly two out of every three information technology projects fall short or fail entirely for various reasons, most of which are related to the use of a dysfunctional process. This is an amazingly bad performance rate across an entire industry.
But this may be just the tip of the iceberg. Numerous reports and studies have looked at failed IT projects costing hundreds of millions of dollars, and even billions, including an $8 billion failed project for the U.S. government’s taxation agency (the IRS), a $170 million project for McDonald’s that was completely abandoned, a $600 million baggage-handling system for the new Denver airport that never worked, and a project for the London Stock Exchange that was originally budgeted at £6 million and was ultimately cancelled after 10 years and £800 million.²
Hence, the intent of Agile to find a better way to organize IT projects is not a trivial exercise, but could in fact be significantly important.
The Agile movement was born in response to millions of dollars wasted in failed technology projects and the horrors of even bigger multibillion-dollar disasters. The movement was nurtured and refined by programmers and project managers who were fed up with the ignominy of it all, and who knew there simply had to be a better way. Not finding one ready at hand, they invented it.
Now Agile is being used everywhere, and for very good reasons: It works brilliantly well.
At the same time, the innovation movement has also been evolving, and it’s been having a clear and definitive impact on corporate strategy, and particularly on corporate results. Companies that have mastered the art and science of radical innovation and empowered ideation, collaboration, and corporate transformation are deservedly recognized worldwide as market leaders. They’ve got the magic and the mojo. They’ve got the market share, too, and the enviable stock prices.
We could cite the usual American exemplars: Apple, Google, Facebook, Starbucks, Procter & Gamble, and Tesla, companies that seem to have taken over the world with out-of-the-box thinking, novel products, and cool new business models. There are many examples in Asia as well, such as Alibaba, Baidu, Tata Group, Samsung, and Toyota. Europe, of course, has many as well—EasyJet, L’Oréal, Unilever, and SAP among them.
We also must note the very long and sad list of firms that were not able to sustain their presence at innovation’s leading edge, fell behind, and suffered greatly. Nokia (swamped by Apple’s iPhone), Yahoo! (displaced by Google), Kodak (which invented the digital camera and then missed the revolution), Xerox (missed the small office and home office copier market), Lucent (once Bell Labs, the pinnacle of technological prowess), and Sony (which fell from the heights to also- ran status) are only a few of the most famous disappointments.
What causes these companies to lose their mojo? What causes their innovation efforts to falter?
One of the main reasons, sadly, is reported by various studies and research groups ranging from the Product Development and Management Association (PDMA), to McKinsey, to IBM, which variously estimate that newly launched products continue to experience astonishing failure rates of anywhere from 30 percent to around 60 percent. In other words, between three and six out of every 10 innovation projects do not succeed, and even worse, this is happening at the tail end of an innovation pipeline process that was supposed to weed out the losers and focus scarce resources only on the winners. What a sad story of disappointment, what a tremendous waste of resources, and what an indictment of the innovation processes and methods that so many companies are using, which, obviously, are not working.
There has to be a better way.
So why hasn’t every company made the shift to new and better methods? Perhaps you’ve heard some of these excuses in your organization:
This is only a small sampling, of course. A Google search of the phrase idea killers will show some amusing but also painful and poignantly biting lists, including a collection of 103 different phrases offered on a website called freedom-school.com. Based on the sheer number of sites uncovered by our search for idea killers, it would seem that the sport of idea killing is quite a popular one, and indeed we’ve all witnessed this in meetings at one time or another.
So, given the prevalence of idea killing, how could we be surprised that people hesitate to take on the challenges of innovation? How unpleasant is it to be humiliated in a meeting by a sly zinger, meant precisely to derail your innovative spirit? Innovation is certainly filled with risk, uncertainty, and ambiguity, and these are definitely not characteristics that modern organizations are built to love. Quite the opposite is true.
On the other hand, given the tidal wave of change across society and the economy that has occurred over the past 20 years, how can any organization’s leaders believe that they can survive, or thrive, without adapting, and thus without innovating?
Simply put, only organizations that innovate have a chance of survival in the long run. Those that don’t . . . will not.
One of the major reasons for the explosion of change has been the technologies of the Information Age, a steady flow of innovations that have resulted in a miraculous 98 percent reduction of the costs of computing and communication during the past two decades.
Technological changes, however, arrive like tsunamis in wave trains, one after another, boom, boom, boom! Although what we’ve just experienced was certainly massive, it’s important to note that it was only the first wave, and bigger ones are on the way.
Such as? Another 100-fold increase in the performance/cost ratio for computing and communications will arrive during the next two decades, bringing with it even more disruption. This is roughly equivalent to taking all the power of every supercomputer that exists in the world today and stuffing it into your video game machine; it will be like turning your smartphone into a personal genius companion.
The impact on every industry, every company, and every one of us will be enormous and unstoppable as we experience unimaginable improvements in all the products and services we use across all aspects of our lives.
In the face of this impending onslaught, how can linear thinking, shifting the blame, idea killing, stalling tactics, static business processes, or even what we consider today’s best practices in innovation help us maintain our competitiveness? Alas, they can’t.
What’s already required today, and what will be absolutely essential tomorrow, is a rigorous process of innovation management that reliably creates better ideas, and effectively and efficiently turns those ideas into both tangible and intangible business value. This process will involve nearly every aspect of the organization, and thus everyone, so participation by the many rather than the few will be inescapably necessary. Everyone from the executive boardroom to the creative geniuses in the labs, to those who provide their deep expertise in a particular aspect of business, all the way down to the rank and file—in the real-time enterprise of the twenty-first century, innovation has to come, and will come, from everywhere. (As we will shortly discover, this brilliant innovative expertise will come from outside, too.)
It is therefore time for new thinking, focusing especially on how we can successfully redefine how we’re going to survive and thrive in the face of such tremendous competitive pressures.
That’s what we mean by Agile Innovation. Are you ready? Good, then let’s go.
Excerpted with permission of the publisher, Wiley, from Agile Innovation: The Revolutionary Approach to Accelerate Success, Inspire Engagement, and Ignite Creativity by Langdon Morris, Moses Ma, and Po Chi Wu. Copyright (c) 2014 by Innovation Labs LLC. All rights reserved. This book is available at all bookstores and online booksellers.
Agile Innovation: The Revolutionary Approach to Accelerate Success, Inspire Engagement, and Ignite Creativity
Part 1: What is the story of Agile Innovation?
→ Part 2: Starting at Sprint Zero: A better way to innovate
Part 3: The Secret Sauce of Innovation
Part 4: Becoming Agile Rapidly and Painlessly
Part 5: Adaptability and Collaboration for Sustainable Business Growth
Part 6: Transforming How We Work
Part 7: Translating Unseen Needs into Innovations
Part 8: The Eight Cs of Transformational Change
Since 2001, Langdon Morris has led the innovation consulting practice of InnovationLabs LLC, where he is a senior partner and co-founder. He is also a partner of FutureLab Consulting. He is recognized as one the world’s leading thinkers and consultants on innovation, and his original and ground-breaking work has been adopted by corporations and universities on every continent to help them improve their innovation processes and the results they achieve. His recent works Agile Innovation, The Innovation Master Plan and Permanent Innovation are recognized as three of the leading innovation books of the last 5 years.
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