All this came up over my journey through the Mexican Yucatan the last days – as part of my time off this winter.
Got the last Harvard Business Review, and there was a couple of notes that drew my attention:
- Build an innovation engine in 90 days by Scott D. Anthony, David S. Ducan, and Pontus M.A. Siren
- The discipline of Business Experimentation by Stefan Thomke and Jim Manzi
Over the next words I will quote them along with my interpretation. A great opportunity to get a better understanding how we got viability of some projects that has been conceived under our wings and also test some of their initial assumptions.
The “Minimum Viable Innovation System” (MVIS)
I will try to render an overview of what MVIS means highlighting some pieces from those HBR’s notes:
- MVIS is a concept borrows from lean start-ups that use a “minimum viable product” functional prototype for developing their offering
- MVIS is the most “essential building blocks that allow a company to begin creating a reliable, strategically focused innovation function”
- MVIS “will ensure that good ideas are encourages, identified, shared, reviewed, prioritized, resourced, developed, rewarded and celebrated“
- MVIs requires “senior management attention”
- MVIS won’t require “years of work, fundamental changes to way the organization runs, or significant reallocation of resources”
Basically, MVIS is not a team that concentrates all the innovation ideas for a company. This is just a team that leads good innovation ideas created wide through the company to executive’s eyes, and gathers all the required information to understand how these ideas must to be supported by the business to turn them out into something profitable.
MVIS could work as a filter of innovation ideas disciplining the way as they are presented to upper levels. Some of them could fit into the strategic company plan, others could bring a different point of view how things are being doing to maybe relay them into “blue ocean” opportunities.
MVIS can be set up “by completing four basics steps in no more than 90 days”
As you can see in the above picture, you can set up an MVS in no more than 90 days. It sounds simple, but it requires commitment and dedicated resources.
Next I will describe every step into this 90 days period as it’s arranged in the HBR’s note.
Day 1 to 30: Define your innovation buckets
As HBR’s note explains, “All innovations fall into two buckets”:
- Core innovations: This bucket is tagged for all innovations projects that “extend today’s business, either by enhancing existing offerings or by improving internal operations”. Any of these initiatives “should be tied to the current strategy and managed mostly within the main business’s organizational structure”. Usually they bring a “rapid and substantial return in the near future”.
- New-growth innovations: In this case, this bucket will get inside any innovation project “that generates new growth by reaching new customer segments or new markets, often through new business models”. Depending on your business current results and your estimated (and honest) growth rate to the future, you will get an estimated gap with your growth goals that need to be covered up using these projects, and the “larger your company’s growth gap, the further from your core those innovations efforts will likely need to be, and the longer it will take to realize substantial revenue from them”.
A failure to understand the difference between the two buckets causes “to either discount the importance of innovations that strengthen the ongoing business or to demand to much revenue from the new-growth initiatives too early”
Estimate the size of the gap: compares the revenue and profit numbers that your business will deliver in the next five years, with the five year goals. If this growth gap is fairly large, “you may wish to subdivide you growth efforts”.
Let’s see for a minute how a company in our vertical – Datacenter and IT Managed Services – can fit into a bucket’s analysis like this.
Projects, for instance, like create an exclusive business unit to consolidate all our security operation services as we’ve done acquiring SM4RT; or implement a shared service system to standardize and reduce costs to manage all financials operations cross different companies and business units inside the group. These are core innovation’s projects with a “rapid and substantial return in the near future” and with the objective of improve the current internal operation.
On the other hand, we have new-growth’s projects like big-data services called Dattlas; and a in-house built platform for SAP HANA on-demand services that you can be provisioned based on memory-blocks per month. These last projects are some far from our core business that is bring Datacenter infrastructure and managed services for traditional IT hosting.
Well, see you next week with the rest of this note!