A couple of weeks ago, Dave West, Forrester Sr. Analyst hosted a webinar with us, entitled, “How Agile Value Management (AVM) can remove risk earlier in your agile process”.  Dave spoke about the benefits of removing risk earlier in your agile process, and streamlining key life cycle friction points between your product teams, analysts, engineering, manufacturing, and customers.

As is usually the case, we received more questions than Dave was able to respond to during the duration of the webinar. Dave has very graciously responded to your unanswered questions, which I’ve included below.

You can also listen to the full webinar replay here.  You’ll also want to follow Dave if you’re not already, he’s very fascinating guy.

1)      Where does innovation in untested or unknown area fit into the value equation?

That is a really interested question. It is hard to know the true value of innovation, but there are techniques such as innovation games that provide a mechanism to at least prioritize one thing over another. The truth of the matter is when delivering new stuff (brand new, innovative product or service) the best thing to do is get something out and test the response ( measure in a controlled way) and then accept that change will happen. An example of this approach is what MS do with their extended Beta – The product is released almost a year before RTM, but to a small select group who provide LOTS of feedback and comment. During that exercise the value of the features are assessed and measured.

2)      What is the value of Documentation in regards to the Agile Methodology?

The problem of documentation is that it is often aimed at two very different audiences. Firstly it is used to drive development in terms of requirements, designs, etc. Secondly it is used to describe the system for maintenance and support. These are two very different audiences. The result is documentation that is neither and good for nothing, thus it gets out of date and becomes irrelevant. Thus on most projects we see Agile documentation driving the development of great software and testing it in terms of stories, simple designs and test materials. The maxim for this documentation is just enough to enable the team to move to done, and is supported with tacit knowledge. In parallel other documentation is created to support the process of support – this is written by professional writers aimed at ONE audience with ONE set of needs.

I recently did a webinar with Roy Wildeman, Senior Analyst at Forrester Research, on how you can minimize risk in product innovation by addressing gaps in your new product development processes. If you make it to the end of the post, you’ll see how I make the connection to square dancing.

Roy’s assertion was that companies are planning to innovate by introducing new products and services to market (90% agreed or strongly agreed on this point in an August 2008 Forrester Research survey of global strategy and marketing professionals). Yet, the success rate for new products is modest at best. Here are a few of the figures he shared:

15% of new product development projects fail outright, 51% are challenged. (Standish)

Half of resources spent on product development are spent on products that fail. (2003 Harvard Business School Cyberposium)

Only 67% of originally defined features show up in the finished product, of those 45% are never used. (Standish)

90% of electronics components function as designed, 50% of them fail when integrated with their systems. (IEEE Design Magazine)

The resources spent on unsuccessful products naturally divert resources from the successful ones. By improving innovation processes, companies can reduce mistakes and inefficiencies to improve the chances of products hitting the mark, and during the right window of market opportunity.

Companies also stand to make great gains by bringing their customers deeper into the product innovation process. Broadening ideation practices to include internal and external audiences (employees, customers, partners, etc.) can expand innovative thinking even further.

One challenge posed by an attendee is making sense of all the incoming ideas and picking the good ones from the bad. Having a well-defined screening process is important to make sure capturing ideas doesn’t become an unwieldy, inefficient process itself.

For ideas that pass initial screening (this can be automated to adjust the incoming ‘flow’), you can then triage, route and evaluate them. This should become part of a daily routine – going through backlogs at periodic intervals has a number of drawbacks I won’t go into in this post. Roy pointed out that:

Over 75% of innovation leaders have clear ways to define & prioritize ideas. (Capgemini Consulting, “Innovation leader or Laggard?” report)

Another great attendee question was about agile principles and whether these lessons oppose the position that people trump process. Roy’s response was that you need to combine people and process, and product innovation software can make human interaction more effective.

It’s a lot like square dancing. There’s a process that keeps everyone moving in a harmonious, streamlined manner, but there’s still room for creativity and innovation. You’re not stepping on each other’s toes (literally!) or bumping into each other because the groundwork is set for how everyone will be in motion, as teams (or dance partners) and as a whole.

Tips for Managing Ideas like Other Company Assets

You wouldn’t let an employee leave the company with their laptop or PDA, so why allow them to go without having collected critical IP – ideas they conceived while employed thinking about how to make your company’s products better.

Here are five tips for better management of your idea assets:

1. Don’t think of it as a point-in-time activity. Your employees are always thinking, so they need an “always on” environment for sharing their ideas with others.
2. Plan to DO something with employee ideas. Even a simple communication back that an idea has been reviewed will keep employees motivated to continue sharing. Updates throughout an idea review cycle are even better.
3. Facilitate collaboration across departments and regions. Innovative thinking grows exponentially when employees are exposed to different ways of looking at a problem.
4. Let your employees do the screening. There are lots of ideas out there – business and product owners won’t be able to review them all. Let employees evaluate each other’s ideas to make the process more efficient.
5. Remember that timing is a critical factor. Sometimes the right idea for today was conceived months or even years earlier. Perhaps by an employee who’s no longer with the company.

See the Forest for the Trees

Innovative ideas are being exchanged by employees daily in meetings, over email and at lunch. Often good ideas never make it beyond the “email string.” When you have a bird’s eye view of the ideas employees are talking about, you can begin to see the trends and spot the opportunities that can make a real difference in your products – opportunities that might otherwise appear as just another tree.

If you’re losing staff during this economic downturn, you’re not just losing productivity; you’re losing intellectual property that could be used to help your company excel during the recovery.

Employee Attrition = Lost IP

In most companies, the wealth of innovative ideas that exists in the minds of employees is a tremendously valuable asset. When employees leave the company, their product and service ideas leave with them. Their files and emails might be mined for information “as needed,” but without the employee there to share AND promote their ideas, this IP is essentially lost.

If you think you can capture their ideas while they’re on their way out, think again. For most employees, ideas occur “in the moment,” so if capturing employee ideas is not a regular part of your corporate culture, you could be losing valuable IP that could have a positive impact on products, sales, customer satisfaction and, ultimately, revenue.

Employees leave companies for many reasons, including the economy, industry trends or a changing company culture. Engaging your employees in idea sharing and collaboration not only ensures that “tribal knowledge” is preserved; it raises employee satisfaction by giving everyone a voice in the discussion on how to improve products and services.

In my next post later this week, I’ll offer five tips for managing your idea assets.