Tag Archives: Innovation

A Post Crisis, Economic Recovery and Crisis Mitigation Proposal

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In my last post, I argued that Supply Chains increased the spread of the COVID-19 Pandemic. I proposed the idea of regional centers for manufacturing to minimize sprawling supply chains and to encourage local innovation to meet different needs based on those regions. I think I need to take this to the next step. Localizing ability to respond to crises. Obviously there are huge benefits to scaling manufacturing capability during times of stability and crisis alike. The cost of making a single N95 mask is much lower whenever you know you’re going to crank out another 100,000 masks over the next few weeks. Because the cost of all that capital equipment is spread across all the masks.

However, because of the centralization of these manufacturing centers, in many cases in China or South East Asia, this creates a supply issue if the entire world needs the exact same thing. This requires a strong central buyer to compete on the market to buy additional supplies. In the US that should be the Federal Government. Sadly, this hasn’t happened and in fact, the President is playing favorites with states and providing medical supplies. This is hugely problematic. However, there’s an opportunity here to protect states in the future from an outbreak and to rebuild the economy.

I propose that states, let’s go with Oregon, cause I live there, creates regional innovation and manufacturing centers (OIMC – Oregon Innovation and Manufacturing Center). These OIMC should be positioned at least one per country, but carefully to ensure that if there’s a critical event, such as a Cascade Subduction Event, the region will have an OIMC on each side of the event. In the Portland Metro Area we’d want one in Easter Portland and one in Beaverton or Hillsboro. Furthermore, these should be located in such a way that if a tsunami hits the coast, an OIMC can double as a shelter and emergency production center.

The goal of the OIMC at the surface would be to manufacture critical items during a crisis. For example an OIMC would have the inventory to build ventilators, N95 masks, disease test kits, materials to stop flooding, fight fires, or whatever major crisis emergency items that might impact that specific region. For example, Roseburg might have more items to fight forest fires than the Portland region, because of the types of crises that impact that region. The list of items should be defined by a combination of FEMA and that state’s emergency and health agency.

However, we can’t just have an OIMC doing this sort of work. There aren’t enough crises (thankfully), to warrant establishing a dozen or more of these locations. That’s why these aren’t just Crisis Manufacturing Centers, these are innovation centers. They become a low cost rental space for businesses to start. For example, you want to open a welding shop but can’t afford the cost of equipment, hiring people, managing books, and the cost of a place to rent? No problem, the OIMC will offer business loans and services to manage HR, your books, sales, and provide a no cost then low cost rental location. You have trouble hiring people with the right skills? No problem the OIMC will offer year round training sessions on a variety of tools. It will have to because it will need to have all the skills to make those critical items.

Wait a minute, won’t the OIMC be competing with other companies? Yes. However, whenever we are not in crisis the OIMC can become flex capacity that companies can rent out until they have the capital they need to expand their business. So, during normal time the State of Oregon is not competing with medical suppliers. They are place that offers services instead. This will allow the OIMC to essentially pay for itself.

Furthermore, these centers offer an opportunity for the region to develop and build technologies they need to support themselves. Given the cost of some farming equipment, the OIMC could elect to manufacture some lower cost farming equipment in really hard hit regions. There are some blueprints at Open Source Ecology which can provide an idea of what we could build, if we need these OIMC to provide a lot of capability during a short time.

Holistically, I think this approach can provide flexible manufacturing capability during a major crisis that will allow states and counties to meet their need when the entire country is stressed at once. It will provide regional support during times of emergencies, which seem to occur more and more frequently, and it can provide an opportunity to rebuild communities by offering skills and spaces to start new businesses. Everyone is going to be hit hard by this pandemic. We need a serious plan for addressing this.

Government Policy and Technology Innovation

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In a way that mirrors yesterday’s court ruling, the FCC announce they were going to investigate and likely force serious changes in the world of set top boxes. The FCC, at one point, forced and supported the cable industry in controlling the types of set top boxes (Set top boxes are cable boxes – Roku and AppleTV are cableless competitors) available to consumers. Since then, we’ve suffered with mediocre and extremely expensive boxes. Boxes that cost $16/month and over time you end up paying for a box 10 times over. The gist of this issue is whether or not to allow companies to make “soft” cable cards. Right now, if you want to decode any video from a coax cable from Comcast, you must have a physical card to do the decoding. There’s nothing preventing this from being accomplished entirely using software once you get the signal into the box and that’s what this is trying to encourage.

Granted, this has taken a while for the FCC to wake up and look at the competitive landscape and see that this isn’t in the public interest. Defining exactly what is in the public interest is a difficult because everyone sees this in a different light. However, it’s pretty obvious that something that you end up paying $1,920 over span of ten years isn’t in the public interest. The competition, Roku and AppleTV, each cost between 100-200 one time and you can use it until it dies which will probably be something like 10 years. I’ve had my Roku HD for 5 years now and it still works great. It would make perfect sense for me to buy a version, assuming I had cable at all, that would allow me to watch cable through it. Everything all in one place.

This is the type of regulation that government should be celebrated for encouraging. Granted they screwed it up to begin with and they are only righting a wrong now, but they’re on the right path. Regulation like Net Neutrality is a similar decision that can spur innovation. Looking at T-Mobile’s binge on plan, you can see why we need this. If I’m a small streaming company or, ya know, YouTube, I look at this platform and see how it’s slanted against me and limits what I’m capable of delivering on T-Mobile’s network.

in the case of the FBI and forcing technology companies to change their technology to reduce security, it’s nice to see an organization that’s willing to at least consider improving opportunities for innovators. Sure it may look like picking winners and losers – but when most policy is driven by current winners picking them to lose sure looks more like balancing the playing field to me.

Enabling Innovation Through Lean Improvement

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This is part of my ongoing Lean Disruption series where I write about how to combine Innovation Theory, Lean, Lean Startup, Agile, and Lean product development.

Since values and metrics drive processes how can you enable innovation in an organization that isn’t completely willing to support innovation? As I mentioned before Skunkworks are a key component in this process. Using emergent strategies with Lean Startup tools such as the Lean Canvas are another key method to enable innovation with the skunkworks approach. However, not every organization can or will truly allow this approach.

In organization that cannot or will not support a skunk works approach to innovation what options are available? In the case where you are a manager of more than yourself you have the ability to implement Lean within your small organization. Owning the processes within your organization and becoming a coach to your employees, can begin enabling metrics that drive customer centric focus.

This is possible by taking a single step and picking a metric that will move the metrics that your bosses care about. Focus on improving one process at a time. Start with something that is completely in your control, such as how you hand off material within your group that goes to other groups. Measure the number of errors your group introduces, however do not blame people. If things are wrong investigate the root cause of the problem rather than accusing your people of causing the problems. Problems can come from the group that handed off the work. In those cases, create a process to review the work looking for errors and then work with the team supplying that work to eliminate those errors where you can.

In the case where there are errors within your team, you work together to uncover each source of the problem. As a manager you own the processes as much as the result of the work your team does. The final output of your work is 100% dependant on the processes that lead to those output. Another important step is to work on converting your daily meeting, assuming you have one, into a daily standup rather than a typical beat and greet. These meetings instead must cover the goals for the day, issues from the day before, and follow up to address those issues. In the case where the team has projects they are working on, this can become an opportunity to being pulling in some agile stand up practices, such as “What did you work on yesterday, what do you plan on working today, and do you have any impediments?” These questions can help change the way projects are run within your group.

To improve processes within your group, the best way to do this is to go to where work is being done. You must actually watch as work is being done, while keeping in mind that the way work is being done will change as you watch people work. Make sure they are aware that you are not going to be critical or even record who is doing the work at the time. Record the information and move on. You should not use this information in their next 1 on 1 or review. The goal is to learn how people are doing work especially across work types and workers. After you map the process review the results in your daily stand up to discuss potential issues. Partner with your team to find the root cause of the problem and empower them to make changes to their processes.

Before you change the process it is important to measure current state and measure the impact of those changes on the metrics that matter to you. Keeping in mind that you must make all changes from a customer’s perspective. These are the easier things to implement. However, making changes and getting support in this change from your leadership isn’t going to be easy, so you must show that you’re making wins and improving the result of your work. That’s all leaders care about.

Successful process improvement opens the way to broader innovations. Start small and then move into larger projects as you have a better understanding of what you are trying to do.

Values and Metrics Drive Emergent Strategies

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This is part of my ongoing series on Lean Disruption. Where I write about combining Innovation, Lean, Lean Startup, Agile, and Lean product development methodologies.

Clay Christensen argues that there are two types of strategies corporate leaders engage with, deliberate and emergent. Porter’s 5 Forces analysis is an attempt to use tools to pull emergent strategies based on changing environmental landscape into the corporation’s deliberate strategy. A deliberate strategy is the strategy that leaders have vocalized and intentionally invested money and resources into. Emergent strategies on the other hand are strategies that develop through metrics and actual organizational behavior. While a leader may intentionally push resources one direction another metrics that has much more value to lower level managers may require those resources to be redeployed in another context. Resulting in a different strategy to develop than what executives had originally planned.

Hoshin Kanri (Policy Deployment) plays a similar role to the 5 Forces in the Toyota Production System where leaders start with their stated 3-5 year goals and turn those into annual goals, projects, and finally the metrics by which those projects will be measured. However, the process isn’t done after a single meeting, this policy is reviewed monthly and if conditions change enough can be completely reworked or modified based on what conditions are emerging. This is important because it can, in fact, feed changes the whole way back at the the 3-5 year goal levels where if serious issues are occurring in multiple projects associated with a goal, such as lack of resource commitment, that goal must be re-evaluated or there needs to be other changes to incentivize resource commitment to those projects.

The Lean Startup and Agile approaches are likely the most closely tied to emergent strategy development. The Lean Startup approach values experimentation and customer engagement above all else which can result in initially a great deal of change in project/corporate strategy. In the Running Lean the author uses the Lean Canvas as a tool to maximize the power of emergent strategy develop and smooth the transition from emergent to deliberate strategy development. In many cases that transition is relatively easy anyway, however it is possible to see that transition occur as a corporate leader iterates through versions of the Lean Canvas resulting in less and less changes to the Canvas.

Agile similarly promotes engagement with customers and using iteration to eliminate uncertainty. In this way Agile is closer to Lean Startup than traditional Project Management and leads to emergent based products. Where the customer need is truly met. Which, over time, results in a deliberate strategy to maximize the resulting product. This product is still, likely, within the initial deliberate strategy of the leaders of the company, but may be very different than what the leadership had initially wanted or planned. This is the best of both worlds as the leaders get a product that fits their strategy, but is more effective in serving market needs than what they ever could have planned.

The values and metrics the organization uses to manage the work that it does heavily influences the direction any project or product develops. The tighter the control over metrics with less flexibility for innovation leads to more tightly aligned products to deliberate strategies. However, this can come at a cost of less innovative ideas and poor-market fit. In the case where something might significantly change the direction of the company, for that product to survive it is best to move that into a skunkworks or protected space where funding is secure with appropriately aligned staffing levels. This will allow the metrics and values to coalesce around the product, the customer, and the market needs.

Values in an Agile/Lean/Innovative company

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This is part of my Lean Disruption Series where I’m looking at Lean, Agile, Innovation, and Lean Startup.

None of these methodologies can be adopted for free. They require a great deal of firm introspection. Understanding how processes interaction with people and values is vital to adopting any of these approaches let alone a combination of these approaches.

Metrics are one of the best examples of how there can be conflicts between stated values, values in making decisions, how resources are handled and how processes are structured. The famous saying “You manage what you measure” is right in a lot of ways. Many companies claim that they value customer satisfaction, however many of these companies do not actually do anything with the satisfaction surveys they do get. Comcast is the most obvious example of this. Comcast doesn’t really value customer satisfaction because they measure their customer support on how much they can upsell to the customer anytime they are on the phone. This changes the processes their customer support must use, rather than designing processes to enable single call resolution, their processes are designed to enable selling more products. Their employees, the resources, are rated based on this and if they don’t meet those goals they are unlikely to do well. Considering the Verge’s Comcast Confessions series most of the resources at Comcast do not feel valued. This all points to the true values for Comcast being retention at all costs and more revenue per user measured in Churn and ARPU (Average Revenue per User) respectfully.

Agile Manifesto from ITIL’s blog

For a company to adopt an Agile approach to developing software, the paradigm of what the organization values must radically change to align to the Agile Manifesto. In most software development the concepts on the right are what are valued through a Project Management Office. The concepts on the left are typically considered only at the beginning or the end of the project or not at all. Working product is the goal of a project, while customer collaboration inclusive only in the beginning getting requirements.

Switching from the right to the left creates massive cultural upheaval at an organization, where power is shifted down and out. It is shifted down to the team level, where managers in the past made all the important decisions Product Owners, Scrum Masters, and developers make the decision now with the customers. Power is shifted out through increased collaboration with the customer. Customer centricity forces the company to understand what the customer really wants and more quickly respond to changes in their understanding of their needs. This does mean that the “requirements” change, however, in many cases due to the uncertainty in a technology, interface, or some other aspect it was impossible to properly articulate the actual need until there was an example in front of the customer.

With these value changes there must be process changes to that properly reflect the change in the way the values require work to be completed. In the case where Single Call resolution is the most important metric reflecting the value of true customer satisfaction, processes must be built to enable that – such as training, information repositories, and authority to truly address customer needs at a single point of contact. In software development rapid iteration with continual feedback is a process that must be built to enable that.

This changes are not free and require true commitment from leaders across the organization. Without their commitment any adoption of these frameworks is doomed to failure.