My talk on "Agile Innovation" at Schneider.

1. Agile
Innovation
Tathagat Varma
Knowledgepreneur
http://thoughtleadership.in

2. Accenture Study, 2013
• 93% execs believed their long-term success
depends on ability to innovate, and 70%
place innovation in Top 5 priorities.
• However, only 18% execs believe their
company’s innovation efforts deliver a
competitive advantage, a decline from 2009
study.
• Too much “invention” (not enough
commercialisation) and too much
“renovation” (in place of breakthrough
ideas)
https://newsroom.accenture.com/subjects/supply-chain-management/accenture-study-innovation-efforts-falling-short-despite-increased-investment.htm

3. Innovation Crisis?
• Only 5% workers in innovation programs feel
highly motivated to innovate.
• More than 3/4th say their new ideas are poorly
reviewed and analyzed.
• Less than 1/3rd measure or report on innovation.
• 81% firms don’t have resources needed to fully
pursue their innovations.
• While 55% treat IP as a valuable resource, only
16% regarded its development as mission-
critical, and only 6% employees feel so!
• 49% won’t get any benefit or recognition for
developing successful ideas.
http://www.forbes.com/sites/stevedenning/2015/02/27/is-there-an-innovation-crisis-at-us-firms/#358318fc34cb

4. Why???
World’s dumbest idea….yes…
maximising the shareholder
value!!!
Hint: “the best way to increase shareholder value is by delivering
value to customers!”
http://www.forbes.com/sites/stevedenning/2015/02/27/is-there-an-innovation-crisis-at-us-firms/#358318fc34cb

5. Do you have other
stories?

6. Three Stories
•F-86 vs MiG15
•Polycom
•CapitalOne
•…and many mini-stories!

8. F-86 vs MiG15
• Colonel John Boyd was interested not just in any dogfights, but
specifically in dogfights between MiG-15s and F-86s. As an ex-pilot
and accomplished aircraft designer, Boyd knew both planes very
well. He knew the MiG-15 was a better aircraft than the F-86. The
MiG-15 could climb faster than the F-86. The MiG-15 could turn
faster than the F-86. The MiG-15 had better distance visibility.
• The F-86 had two points in its favor. First, it had better side visibility.
While the MiG-15 pilot could see further in front, the F-86 pilot could
see slightly more on the sides. Second, the F-86 had a hydraulic
flight control. The MiG-15 had a manual flight control.
• The standing assumption on the part of airline designers was that
maneuverability was the key component of winning dogfights.
Clearly, the MiG-15, with its faster turning and climbing ability, could
outmaneuver the F-86.
• There was just one problem with all this. Even though the MiG-15
was considered a superior aircraft by aircraft designers, the F-86
was favored by pilots. The reason it was favored was simple: in one-
on-one dogfights with MiG-15s, the F-86 won nine times out of ten.
https://msdn.microsoft.com/en-us/library/aa479371.aspx

9. Boyd’s Law of Iteration
Speed of iteration
beats
quality of iteration!

10. Polycom
Jeff Rodman co-founded Polycom in 1990.
“There’s a big advantage in starting small. Polycom’s biggest
early breakthrough, for instance, came about as the result of a
95-cent book I purchased from RadioShack in 1991. That
pamphlet taught my cofounder and me about a nerdy topic
known as “acoustic suspension,” a concept that showed us the
fallacy in assuming that big sound demands a big loudspeaker.
Using this simple principle, we were able to go small by bringing
two separate acoustic environments into a compact space. That
tiny shift in our thinking is what set us on the path to selling
millions of phones and changing what conference rooms look
like today — a path that continues to be built from small
innovations, small designs, and small habits.
Over my 25 years at Polycom we’ve had our fair share of big
things, but they didn’t happen by making those big things the
centerpiece. Big things happen because of small things,
which means that if all you do is “go big,” you’ll never actually
get to your goal. To help escape the myth of going big, I want to
share three small things that I’ve learned make a big difference.”
https://hbr.org/2016/09/how-i-built-a-2-billion-company-by-thinking-small

11. Polycom
“It’s always tempting to try to capture some grand
solution in one leap. While that can happen, far
more often the best decisions and the best solutions
are constructed within an environment of small
habits, innovations, and designs. Going small
doesn’t mean you can’t go big. It means that
when you finally do get big, there is an excellent
chance for it to become a brilliantly remarkable big.”
• Small Innovations
• Small Designs
• Small Habits
https://hbr.org/2016/09/how-i-built-a-2-billion-company-by-thinking-small

12. CapitalOne
• Started in 1994. $25Billion revenues today!
• Fairbank attributes CapitalOne’s success to its “ability
to turn a business into a scientific laboratory where
every decision…could be subjected to systematic
testing using thousands of experiments”
• 2000: Conducting over 60,000 tests a year!
• 2013: Conducts over 80,000 big data experiments a
year, a number expected to go higher!
• Started CapitalOne Labs in 2011 to develop products
in collaboration with VCs, entrepreneurs and
academics.
• Holds regular meetings and competitions to
encourage creation of products in less than 24
hours.
https://www.capgemini.com/resource-file-access/resource/pdf/capital-one-doing-business-the-digital-way_0.pdf

13. More…?
• 1943: Lockheed’s Skunkworks delivers XP-80 in just 143 days. 7 days
ahead of schedule
• 1943-45: Ford’s Willow Run plant makes B-24 bombers every 55 minutes!
• 1951-91: Toyota: 40 Years, 20 Million Ideas!
• 1979-84: Dyson’s 5,127 Iterations over 5+ years
• 1983-89: Lexus LS400: 450 iterations and 900 engine prototypes over 5+
years
• 2008: Wikispeed deliver a 100mpg car prototype in 3 months, and iterates
every week!
• 2009: Google claimed to have run over 12,000 randomised experiments,
with about 10% of them leading to business changes.
• 2011: Intuit’s SnapTax team iterated eight time in eight weeks
• 2014: Amazon’s Apollo did 50M code deployments in past 12 months.
That’s more than one code deployment per second!

14. What’s common?
• Increasing working in a “VUCA” world
• Centralised strategy, Decentralised
execution
• Culture of experimentation
• Fail fast, fail cheap, fall forward
• Big goal…but willing to start small
• Small, collaborative, cross-functional teams
• Hundreds of low-risk experiments (“safe to
fail” as opposed to “failsafe”)
• Rapid iterations to accelerate faster learning
• Testing often in the field
• Progress over perfection
• …

15. Lorenz’s Butterfly
1972: Does the Flap
of a Butterfly’s
Wings in Brazil Set
Off a Tornado in
Texas?
Small changes can
lead to big results!

16. Aggregation of Marginal Gains
http://jamesclear.com/marginal-gains

17. The simple math behind
it that “compounds” it…
(0.99)^365 = 0.03
(1.01)^365= 37.8

18. So, what part of
common sense we
don’t get ?!?

19. Stacey Matrix

20. Double-loop Learning

21. Learning Loops…
perhaps as old as nature!
Francis Bacon,
16th Century
Walter Shewhart
20th Century
Eric Ries
21th Century
…and many many more since the
mankind!!!
Charles Darwin,
19th Century

22. Agile Manifesto, 2001
agilemanifesto.org

23. Using Scrum as a problem-
solving framework

24. From Creativity to
Innovation
https://cucumber.pro/images/blog/divergent-convergent-thinking.png

25. A Design Thinking
Process

26. Agile Innovation
• E&Y: The art of making hard things easy and
creating new viable business offerings faster
• Encourage experimentation, collaboration
and maximise learning
• Strive for agile and innovative processes
• Don’t sweat uncertainty
• Increase efficiency but don’t just focus on
best practices and standard operating
procedures
• Bain: Integrates design with development,
adapting and releasing the most valuable
features far faster

27. Traditional vs. Agile
Innovation
Delivering agile innovation, Jun 2014, E&Y

28. Executing Agile
Innovation
Delivering agile innovation, Jun 2014, E&Y

29. Recap
• Change, and more particularly innovation,
has been the key to human survival and
progress.
• In today’s “VUVA” world, traditional long-
haul methods of innovation don’t work
anymore!
• Integration of “agile” ideas to innovation
leads to better results, across the industry
verticals
• However, agile innovation is more about
mindset and culture than methods, processes
and tools!

30. References
• Agile Innovation, Langdon Morris et al
• The Power of Agile Innovation, https://www.wazoku.com/blog/agile-innovation/
• Delivering Agile Innovation, https://webforms.ey.com/Publication/vwLUAssets/EY-
delivering-agile-innovation-presentation/$FILE/EY-innovation-through-collaboration-
presentation.pdf
• Agile Innovation, http://www.bain.com/publications/articles/agile-innovation.aspx
• The Secret History of Agile Innovation, https://hbr.org/2016/04/the-secret-history-of-
agile-innovation
• Agile: The World’s Most Popular Innovation Engine, http://www.forbes.com/sites/
stevedenning/2015/07/23/the-worlds-most-popular-innovation-engine/#36d333fa2d4c
• The New New Product Development Game, https://hbr.org/1986/01/the-new-new-
product-development-game
• Agile Innovation for Startups, https://medium.com/the-perch/jim-hornthal-agile-
innovation-for-startups-bcae73e2cd30#.9umpzso77
• Innovation at 50x, http://www.slideshare.net/sblank/innovation-
at-50x-081515-51681670
• How I Built a $2Billion Company by Thinking Small, https://hbr.org/2016/09/how-i-
built-a-2-billion-company-by-thinking-small
• Uncontrolled, Jim Manzi
• http://www.extremefactories.eu/agile-innovation-process-manifesto/