This document discusses strategies for distributed decision making and innovation. It advocates for empowering small, cross-functional teams to drive their own strategies and priorities. It also discusses the importance of establishing a culture of risk tolerance by focusing on "painful risks" rather than risks that only cause embarrassment. The document highlights the success of LinkedIn's Hackdays program in fostering inspiration and innovation by dedicating time every month for employees to experiment with new projects.

1. Innovation & Inspiration
Empowering Distributed Decisions
Adam Nash
October 21, 2011

2. Steve Jobs
“We don’t have an
innovation process. We
hire good people.”

3. Concepts
Distributed Systems
Risk Tolerance
Hackdays

4. Distributed Systems

5. Optimus Prime
“Fate rarely calls upon us
at a moment of our
choosing”
-- Revenge of the Fallen

6. Distributed Systems
High parallelization
Loose coupling
N-tier architectures
Fault tolerance
Massive scalability

7. Distributed Systems
High parallelization
Loose coupling
N-tier architectures
Fault tolerance
Massive scalability
Why don’t we build organizations this way?

8. What do we do instead?
Linear processes, without parallelization
Tight coupling, often with single points of failure
Fault tolerance generally limited to under utilization
Extremely limited scalability, even with winning teams

9. What do we do instead?
Linear processes, without parallelization
Tight coupling, often with single points of failure
Fault tolerance generally limited to under utilization
Extremely limited scalability, even with winning teams
Who would architect a system like this?

10. Paradox of Delegation

11. Paradox of Delegation
Everyone wants authority and decision
making delegated down to their level... but
not further.

12. Distributed Organizations
Small, cross-functional teams empowered to drive their
strategy, prioritization and execution
Common, harmonized goals with unambiguous definitions
of success
High degree of independence between teams in terms of
both process and technology
Constant, redundant and consistent communication
between teams and up-and-down the organization
Clear definitions of exceptions, and protocols for escalation

13. Risk Tolerance

14. Optimus Prime
“Sometimes even the
wisest of men and
machines can be
in error”
-- Transformers (1984)

15. High Risk, High Reward?
Most common incorrect statement made about
investment decisions
The market does not reward risks that can be
diversified away
Stupid risk does not add value
In a rapidly changing technology landscape, the risk of
not moving fast enough is huge

16. High Risk, High Reward?
Most common incorrect statement made about
investment decisions
The market does not reward risks that can be
diversified away
Stupid risk does not add value
In a rapidly changing technology landscape, the risk of
not moving fast enough is huge
What’s the right framework for risk in high tech?

17. Three types of risk
Mortal risk
If this goes wrong, the venture literally is over.
Painful risk
If this goes wrong, you face a significant issue with a
key metric (market share, revenue, usage)
Embarrassment risk
If this goes wrong, you have to admit you were wrong.

18. Three types of risk
Mortal risk
If this goes wrong, the venture literally is over.
Painful risk
If this goes wrong, you face a significant issue with a
key metric (market share, revenue, usage)
Embarrassment risk
If this goes wrong, you have to admit you were wrong.
Most companies spend too much time on
embarrassment & don’t take enough painful risks.

19. Painful Risk is Reality
Technology is hyper-competitive
Great projects often include commitments to deliver
solutions to problems that haven’t been solved yet.
The landscape changes so often, the “right solution” to
a problem is often sub-optimal within a few years.
Moderate risk with experimentation, iteration, and
minimally viable products.
Reward risk by sharing learning & owning the decision

20. Hackdays

21. Optimus Prime
“Freedom is the right of all
sentient beings”
-- Transformers (1984)

22. LinkedIn Hackdays
One Friday, every month
Projects due by Monday,
9am
Projects displayed on intranet
Projects publicly judged by
executives
Prizes. Glory. Real Success.

23. Why does it work?
In software, you don’t learn deeply by reading or
discussing. You learn by doing.
It takes dedicated time to experiment and learn a new
platform, new architecture, new algorithm.
Small teams learn together.
Inspiration is contagious.

24. Inspiration ➞ Innovation
Most of the limits that we face we place on ourselves.
Competition challenges and inspires
Leadership behavior and incentives matter, as they can
easily confirm or deny prioritization of innovation
Culture of innovation requires peer-based inspiration

25. Inspiration ➞ Innovation
Most of the limits that we face we place on ourselves.
Competition challenges and inspires
Leadership behavior and incentives matter, as they can
easily confirm or deny prioritization of innovation
Culture of innovation requires peer-based inspiration
We inspire each other to do our best work.

26. More on LinkedIn Hackdays
http://blog.adamnash.com/2011/05/05/why-linkedin-hackdays-work/

27. Parting Thoughts

28. Organization, Risk & Culture
Innovation begins with empowerment. Small, cross-
functional teams have the data, the passion, and the
ability to execute. Empower them.
It’s easy to talk about being risk tolerant, but which
types of risks, and when? Beware spending too much
time on embarrassment risk.
Don’t run systems at 100% of capacity. Engineers
need some amount of bandwidth to learn, experiment
and execute on new ideas.

29. Inspire Each Other

30. Thank you
Adam Nash
http://linkedin.com/in/adamnash
http://blog.adamnash.com