Fast and Furious: The New Economic Reality
What are the leading factors causing the accelerated pace and relentless drive for innovation across so many industries today? It’s a combination of issues that’s causing many businesses to feel like they need to pick up the pace. According to a recent survey from Forrester Research, the top three drivers for acceleration are the need to reduce costs, improve capabilities, and meet the escalating expectations of customers. (Fig. 1)
The accelerating rate of technology change is also having a significant impact. Look around: Refrigerators are run by software. Watches measure heart rate. Cars drive themselves. Even the vending machines in the break room are equipped with sensors that alert the mother ship when they’re running low on cans of Rockstar. Objects are getting smarter.
According to a recent report on disruptive technologies from the McKinsey Global Institute, there has been a 300% increase in connected machine-to-machine devices over past five years. As software becomes more and more embedded into technology, the rate of innovation accelerates. Software can do so much more, so much faster— and it can also evolve much more rapidly. Think about cars rolling off of computerized assembly lines: software controls the engine, the safety features, the GPS networks, the air conditioning, the windshield wipers. Every day, more features are being developed with software-driven controls.
This new reality means that every large company, across every industry, is becoming a technology company. But many organizations are having a hard time keeping up with the rapidly accelerating pace of change, especially when their teams are working in silos using outmoded systems. Product delivery is plagued by (what should be) preventable delays. In a survey conducted by Forrester Research on behalf of Jama Software, “unclear or changing requirements” was the most common reason cited for product delays.
It’s no surprise to see communication issues as well. Reasons such as delayed decisions, coordination problems and shared resource conflicts are preventable, but they happen all the time. In many companies, collaboration only occurs when the right people finally find time in their overscheduled days for a one-hour conference call—and then, half the time is wasted going over why past decisions were made without everyone’s approval.
This isn’t the way to do business in the new economy. Fortunately, there’s a better way. A way that makes it possible to innovate, and do it faster than the competition.
What does accelerated innovation really mean? There are three dimensions to it:
GETTING THE TIMING RIGHT:
Delivering a product to market sooner than the competition is key to gaining a significant advantage, but ensuring perfect timing is also critical. Sometimes the market isn’t quite ready for the next big idea.
Products are designed to meet customer needs. But those needs change, and understanding what customers want today as well as tomorrow is important, as is getting feedback throughout the process.
TAKING INCREMENTAL STEPS:
Spending years to make improvements and releasing big, feature-laden updates, with long periods of silence in between, is a great way to deliver a fantastic product at the wrong time to an audience that’s moved on.
Let’s take a look at how some of the most innovative companies are making the leap into the fast-forward workplace and discover the traits that enable accelerated innovation.
THE FRUITS OF THEIR LABORS: APPLE AND BLACKBERRY
It wasn’t so long ago when it seemed as if there was a BlackBerry clipped to every belt and purse. In 2007, BlackBerry stock was selling at an alltime high of $230 per share. But something else happened that year—Apple introduced the iPhone. Things changed in a hurry, and we all know what came next. But why did it happen that way?
For many years, BlackBerry was an innovative leader in the mobile industry, building revolutionary communications devices like two-way pagers and phones with two-way radio. Because of built-in security features and push email, they came to own the smartphone market—especially in the business world. When the iPhone arrived, BlackBerry assumed that large enterprises and governments would be hesitant to adopt consumer-level devices.
It was a textbook case of the Innovator’s Dilemma: too much focus on their core business. BlackBerry claimed that the upstart iPhone was irrelevant, and the sales were too small to notice. But a funny thing happened with the upstart iPhone. Those enterprise and government employees often came home at night, put down their BlackBerry devices, and picked up their fun, easy-to-use iPhones. Before long, people decided that they wanted that usability at work, too. And enterprise leaders figured out that they could save a lot of money if their workers were willing to pay for their own mobile devices.
When Deloitte was asked by the state of Montana to overhaul the software system used to manage public assistance eligibility, they knew it would be a massive undertaking. The team was spread out around the globe across multiple time zones. After spending several years identifying the system needs and system requirement, there were over 10,000 requirements and 5,000 test cases. And of course, the deadline was extremely tight. The team at Deloitte had to act fast without sacrificing accuracy or quality of their work. This software system would be responsible for a vital project for the state government: enabling disability benefits and assistance for people in need. Deloitte quickly realized that the old way of working, with spreadsheets, documents, and email, simply wouldn’t do. Using Jama for collaborative requirements and test management, Deloitte produced a highquality product while reducing risk. In addition to delivering an effective product faster, Deloitte was able to maintain full traceability through the process, to ensure the design requirements were met and the test coverage was appropriate. Along the way, clear communication and transparency made it possible to for Deloitte to deliver a complex project faster. Deloitte also developed best practices for repeatable processes during the project, which they can use on similar projects for other states.
There are many reasons for the rise of the iPhone and the fall of BlackBerry, but one of the most significant issues was a failure on BlackBerry’s part to pivot fast enough to stay a step ahead of the curve. BlackBerry launched products that were late to market and missed the mark with consumers. They took three years to release a new operating system. They focused on features they thought their customers were looking for, like security and longer battery life, while failing to deliver what people actually wanted, like a camera, or a wide array of useful apps.
Meanwhile, Apple had been busy monopolizing the consumer market and becoming the benchmark for smartphone usability. They had also managed to quickly iterate and improve their enterprise security. And since they already had a strong user following, they were able to move quickly into the enterprise market. After all, business users are also consumers, and when given the choice, they quickly opted for the iPhone.
Apple also had something else going for them: the ability to manage massively complex projects and coordinate with multiple teams. According to Tony Fadell, a former Apple executive who worked on the iPhone, the project was not unlike the first moon mission. In an interview with The New York Times, he put it this way: “I’m used to a certain level of unknowns in a project, but there were so many new things here that it was just staggering.” (He started his own company, Nest, in 2010—more about that later.) Apple apparently created multiple working prototypes of the device, each with its own hardware, software and design elements.
The ability to develop complex projects like the iPhone demands more than simple collaboration.citation
The ability to develop complex projects like the iPhone demands more than simple collaboration. It takes the ability to manage a complicated product throughout its lifecycle— from initial concept to market launch—and collaborate across multiple teams to make it happen. Apple has proven that collaborating and managing complexity is no object. If they can continue to innovate and accelerate their product cycle, Apple will be able to stay ahead of the competition. If not? Well, there’s always another upstart on the horizon.