How to Innovate to stay Relevant

Staying relevant! The biggest challenge we all face – staying relevant within our market. Relevance to your customers is what keeps you in business.

With the world changing as rapidly as it does today, mainly due to the profound influence of technology on our lives, the expectations of the consumer is changing at pace. They have access to an increasing array of choice, not just in how they spend their money but also in how they are communicating and interacting – change fueled by a digital revolution. The last thing that anyone can afford, in this fast paced race, is losing relevance – that will cost us customers or worse…

Is what you are selling today, adaptable to the continuous changing ecosystems? Does your strategy reflect that agility? How can you ensure that your business stays relevant in the digital age? We have all heard about digital transformation as a necessity, but even then, how can you ensure that you are evolving as fast as your customers and stay relevant within your market?

Business, who has a culture of continuous evolvement, aligning their products and services with the digital driven customer, is the business that stays relevant. This is the kind of business that does not require a digital transformation to realign with customer’s demand to secure their future. A customer centric focus and a culture of continuous evolution within the business, throughout the business value chain, is what assure relevance. Looking at these businesses, their ability/agility to get innovation into production, rapidly, is a core success criterion.

Not having a strategy to stay relevant is a very high and real risk to business. Traditionally we deal with risk by asking “Why?”. For continuous improvement/evolution and agility, we should instead be asking “Why not?” and by that, introduce opportunities for pilots, prototypes, experimentation and proof of concepts. Use your people as an incubator for innovation.

Sure, you have a R&D team and you are continuously finding new ways to deliver your value proposition – but getting your innovative ideas into production is cumbersome, just to discover that it is already aged and possibly absolute in a year a two. R&D is expensive and time consuming and there are no guarantees that your effort will result in a working product or desired service. Just because you have the ability to build something, does not mean that you have to build something. Focusing the scares and expensive resources on the right initiatives makes sense, right! This is why many firms are shifting from a project-minded (short term) approach to a longer-term product-minded investment and management approach.

So, how do you remain customer centric, use your staff as incubators of innovation, select the ideas that will improve your market relevance and then rapidly develop those ideas into revenue earners while shifting to a product-minded investment approach?

You could combine Design Thinking with Lean Startup and Agile Delivery…

In 2016, I was attending the Gartner Symposium where Gartner brought these concepts together very well in this illustration:

Gartner - Design-Lean-Agile 2

Instead of selecting and religiously follow one specific delivery methodology, use the best of multiple worlds to get the optimum output through the innovation lifecycle.

Design-Lean-Agile 1

Using Design Thinking (Empathise >> Define >> Ideate >> Prototype) puts the customer at the core of customer centric innovation and product/service development. Starting by empathising with the customers and defining their most pressing issues and problems, before coming up with a variety of ideas to potentially solve the problems. Each idea is considered before developing a prototype. This dramatically reduces the risk of innovation initiatives, by engaging with what people (the customer) really need and want before actually investing further in development.

Lean Startup focuses on getting a product-market fit by moving a Prototype or MVP (minimum viable product) through a cycle of Build >> Measure >> Learn. This ensures a thorough knowledge of the user of the product/service is gained through an active and measureable engagement with the customer. Customer experience and feedback is captured and used to learn and adapt resulting in an improved MVP, better aligned to the target market, after every cycle.

Finally Agile Scrum, continuing the customer centric theme, involves multiple stakeholders, especially users (customers), in every step in maturing the MVP to a product they will be happy to use. This engagement enhances transparency, which in turn grow the trust between the business (Development Team) and the customer (user) who are vested in the product’s/service’s success. Through an iterative approach, new features and changes can be delivered in an accurate and predictable timeline quickly and according to stakeholder’s priorities. This continuous product/service evolvement, with full stakeholder engagement, builds brand loyalty and ensures market relevance.

Looking at a typical innovation lifecycle you could identify three distinct stages: Idea, Prototype/MVP (Minimal Viable Product) and Product. Each of these innovation stages are complimented by some key value, gained from one of the three delivery methodologies:

Design-Lean-Agile 2

All of these methodologies, engage the stakeholders (especially the customer & user) in continuous feedback loops, measuring progress and capturing feedback to adapt and continuously improve, so maximum value creation is achieved.

No one wants to spend a lot of resource and time delivering something that adds little value and create no impact. Using this innovation methodology and associated tools, you will be building better products and service, in the eye of the user – and that’s what matters. You’ll be actively building and unlocking the potential of you’re A-team, to be involved in creating impact and value while cultivating a culture of continuous improvement.

The same methodology works very well for digital transformation programmes.

At the very least, you should be experimenting with these delivery approaches to find the sweat spot methodology for you.

Experiment to stay relevant!

Let’s Talk – renierbotha.com – Are you looking to develop an innovation strategy to be more agile and stay relevant? Do you want to achieve your goals faster? Create better business value? Build strategies to improve growth?

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Read similar articles for further insight in our Blog.

Lean Six Sigma – Organisational Development and Change

Directly related to business performance is the ability to change the business processes for greater efficiency and productivity while terms like specialisation, standardisation comes to mind followed by measurement, data analysis, statistical analysis, root cause analysis and finally process control and quality control.

Remember the saying by Peter Drucker: “What gets measured, gets improved”…

Improvement initiatives bring change.

A brief history of organisational change

Change management has evolved from Organisational Development OD – focused on helping people to manage change and to stay alive post the world war in the 1940S. That lead to Change Management thinking in the 70s and 80s and in parallel project management as another management process, was developed. These processes saw change as linear and hence can it be managed tightly. It starts with a burning platform and a vision to resolve the problem followed by the change journey of solving problems and overcoming obstacles. In the late 80s Appreciative Inquiry emerged changing the focus of change to “best that can be” and driving “what should be” rather than “what is wrong” and driving the “fix it”. The 1990s and 2000s brought more collaborative models and tools to manage change and solve problems and performance coaching got commonly accepted and used.

The drive to improve business performance gave life to various methodologies and frameworks for example:

  • Toyota Production System (TPS), the origins of Lean Thinking, included the prominent problem solving tools through the “five why’s”, continuous improvement, “Just in Time” production and the elimination of waste.
  • Business Process Re-engineering (BPR) which encouraged the outsourcing and off-shoring of work deemed to be non essential or too costly to perform.
  • Balance Scorecard which aims to provide a well-balanced view of the health of an organization through key performance metrics representing the financial, operational, human and environmental aspects of the business performance.
  • Project Management methodologies and frameworks: PMI, Prince2, Agile SCRUM, LEAN, KANBAN
  • Quality Control frameworks, methodologies and standards: ISO9001, Six Sigma
  • Information Technology Service Management (ITSM) frameworks: ITIL

 

Six Sigma

Six Sigma is a quality improvement approach that seeks to improve the quality of process outputs by identifying and removing the causes of defects and minimizing variability in the delivery processes. This is done through a set of quality tools management tools and statistics.

Another definition – the ability of processes to deliver a very high percentage of the output within a defined specification derived from customer specifications. A key KPI is the defect % and the process to reduce that to be within specification of tolerance – where a defect is defined as any process output that does deliver to customer requirements.

Running a process at Six Sigma quality is defined as defect levels below 3.4 defects per 1M cycles of the process!

Six Sigma principles:

  • Continuous efforts to achieve stable and predictable process outputs are vital for business success.
  • Operational business processes can be measured, analysed, improved and controlled.
  • Achieving sustained quality improvement requires commitment from the entire organization, particularly from the top management.

Each Six Sigma project has a five step sequence (DMAIC):

DMAICProblem solving approach:

D – Defining

M – Measuring

A – Analysing

I – Improving

C – Controlling

  1. Defining the problem, and setting a project goal.
  2. Measuring current process performance and collecting relevant data potential root causes.
  3. Analysing the data to investigate and verify cause-and-effect relationships. Determine what the relationships are attempt to ensure that all factors have been considered. The analysis should reveal a root cause of the defect under investigation.
  4. Improving and optimizing the current process by introducing changes that reduce or solve the impact of the identified root cause.
  5. Controlling/Monitoring the newly changed process to ensure no deviation from the expected results occur and that the new process is stable.

 

LEAN Thinking

You are lean when all you resources are used to deliver value to the end customer – nothing else. This value has to flow through the value chain without any interruptions. All activities not directly supporting in the creation and delivery of this value is considered as waste and therefore reviewed for potential elimination.

Another definition: Lean is focused on getting the rights things to the right place at the right time in the right quantity while achieving a perfect workflow that is dictated by the customers demand to deliver the goods just in time.

LEAN – Five Principles:

Lean_principles

  1. Specify value from the customer’s point of view. Start by recognizing that only a small percentage of overall time, effort and resources in a organization actually adds value to the customer.
  2. Identify and map the value chain. This is the te entire set of activities across all part of the organization involved in delivering a product or service to the customer. Where possible eliminate the steps that do not create value
  3. Create flow – your product and service should flow to the customer without any interruptions, detours or waiting – delivering customer value.
  4. Respond to customer demand (also referred to as pull). Understand the demand and optimize the process to deliver to this demand – ensuring you deliver only what the customer wants and when they want it – just in time production.
  5. Pursue perfection – all the steps link together as waste is identified – in layers as one waste rectification can expose another – and eliminated by changing / optimizing the process to ensure all assets add value to the customer.

LEAN Tools:

  • Five S (5S): A process of keeping the workplace ready for use exercising a discipline of 5 workplace practices beginning with S.
    • Sort
    • Set in order
    • Shine
    • Standardise
    • Sustain

5S optimally prepare the workplace to perform optimum tasks in the future including the idea of visual management.

  • Seven Wastes: Waste is any activity that consumes resources but do not not creates value for the customer. The purpose of seven wastes is to identify and eliminate waste in processes hence delivery greater customer value.                                              7 Catagories of Waste: Defects, Overproduction, Unnecessary transportation, Waiting, Inventory, Unnecessary Motion, Over-processing
  • Takt Time: The average rate at which a deliverable item is required to meet the customer demand. It is used to create the balance in the process between supply and demand and to help calculate the resources required to efficiently process a process just in time.
  • SMED
  • Kaizen
  • Value-Stream Mapping

Underlining the success of Lean is a culture of respect of people – at all levels. As Lean is a whole-system management methodology that requires a overall culture change to be successful – starting at the top.

 

Lean Six Sigma

General Electric (GE) adopted Six Sigma in the 1980’s – combining that with the principals adopted by the Toyota Production System (TPS), the origins of Lean Thinking provide the methodology of LEAN SIX SIGMA.

It is a complementary combination between the best of both worlds – Lean Thinking, which is focused on process flow and waste elimination and Six Sigma, which is focused on process variation and defects – driving business operational excellence.

 

Other relevant posts: Executive Overview of Agile #1 and #2

Let’s Talk – Are you looking to achieve your goals faster? Create better business value? Build strategies to improve growth? We can help – make contact!

Executive Summary of 4 commonly used Agile Methodologies

AGILE – What business executives need to know #2: Overview of 4 most commonly used Agile Methodologies

In the first article in this series we focussed on an overview of what Agile software development is and referred to the Agile SCRUM methodology to describe the agile principles.

Let’s recap – Wikipedia describes Agile Software Development as an approach to software development under which requirements and solutions evolve through the collaborative effort of self-organizing cross functional teams and their customers / end users.  It advocates adaptive planning, evolutionary development, early delivery, and continuous improvement, and it encourages rapid and flexible response to change. For an overview see the first blog post…

Several agile delivery methodologies are in use for example: Adaptive Software Development (ASD); Agile Nodelling; Agile Unified Process (AUP); Disciplined Agile Delivery; Dynamic Systems Development Method (DSDM); Extreme Programming (XP); Feature-Driven Development (FDD); Lean Software Development (LEAN); Kanban; Rapid Application Development (RAD); Scrum; Scrumban.

This article covers a brief overview of the four most frequently used Agile Methodologies:

  • Scrum
  • Extreme Programming (XP)
  • Lean
  • Kanban

 

SCRUM

Using Scrum framework the project work is broken down into user stories (basic building blocks of agile projects – these are functional requirements explained in an in business context) which are collated in the backlog (work to be done). Stories, from the backlog, are grouped into sprints (development iteration) based on story functionality dependencies, priorities and resource capacity. The resource capacity is determined by the speed (velocity) at which the team can complete stories, which are categorised into levels of complexity and effort required to complete. Iterations are completed with fully functional deliverables for each story until all the needed stories are completed for functional solutions.

SCRUM

Scrum is based on three pillars:

  • Transparency – providing full visibility on the project progress and a clear understanding of project objectives to the project team but more importantly to the stakeholders responsible for the outcome of the project.
  • Inspection – Frequent and repetitive checks on project progress and milestones as work progresses towards the project goal. The focus of these inspections is to identify problems and differences from the project objectives as well as to identify if the objectives have changed.
  • Adaptation – Responding to the outcome of the inspections to adapt the project to realign in addressing problems and change in objectives.

Through the SCRUM methodology, four opportunities for Inspection and Adaptation are provided:

  • Sprint Retrospective
  • Daily Scrum meeting
  • Sprint review meeting
  • Sprint planning meeting

A Scrum team is made of a Product Owner, a Scrum Master and the Development Team.

Scrum activity can be summarised within the following events:

  • Sprint – a fixed time development iteration
  • Sprint Planning meetings
  • Daily Scrum meetings (Stand-Up meetings)
  • Sprint Review meetings
  • Sprint Retrospectives

 

XP – EXTREME PROGRAMMING

XP

Extreme Programming (XP) provides a set of technically rigorous, team-oriented practices such as Test Driven Development, Continuous Integration, and Pairing that empower teams to deliver high quality software, iteratively.

 

LEAN

LEAN

Lean grew from out of the Toyota manufacturing Production System (TPS). Some key elements of this methodology are:

  • Optimise the whole
  • Eliminate waste
  • Build quality in
  • Learn constantly
  • Deliver fast
  • Engage everybody
  • Keep improving

Lean five principles:

  1. Specify value from the customer’s point of view. Start by recognizing that only a small percentage of overall time, effort and resources in a organization actually adds value to the customer.
  2. Identify and map the value chain. This is the te entire set of activities across all part of the organization involved in delivering a product or service to the customer. Where possible eliminate the steps that do not create value
  3. Create flow – your product and service should flow to the customer without any interruptions, detours or waiting – delivering customer value.
  4. Respond to customer demand (also referred to as pull). Understand the demand and optimize the process to deliver to this demand – ensuring you deliver only what the customer wants and when they want it – just in time production.
  5. Pursue perfection – all the steps link together waste is identified – in layers as one waste rectification can expose another – and eliminated by changing / optimizing the process to ensure all assets add value to the customer.

 

KANBAN

Kanban is focussed the visual presentation and management of work on a kanban board to better balance the understanding of the volume of work with the available resources and the delivery workflow.

KANBAN

Six general work practices are exercised in kanban:

  • Visualisation
  • Limiting work in Progress (WIP)
  • Flow management
  • Making policies explicit
  • Using feedback loops to ensure customer and quality alignment
  • Collaborative & experimental evolution of process and solutions

By limiting WIP you are minimising waste through the elimination of multi tasking and context switching.

There is no prescription of the number of steps to follow but it should align with the natural evolution of the changes being made in resolving a problem or completing a specific peace of work.

It focuses on delivering to customer expectations and needs by promoting team collaboration including the customer.

 

A Pragmatic approach

These techniques together provide a powerful, compelling and effective software development approach that brings the needed flexibility / agility into the software development lifecycle.

Combining and borrowing components from different methodologies to find the optimum delivery method that will deliver to the needs of the organisation is key. Depending on the specific business needs/situation, these components are combined to optimise the design, development and deployment of the software.

Helpful references:

A good overview of different agile methodologies can be found on slideshare at https://www.slideshare.net/SmartBizVN/introduction-to-agile-and-lean-software-development.

 

Let’s Talk – Are you looking to achieve your goals faster? Create better business value? Build strategies to improve growth? We can help – make contact!