Most organisations optimise for cost control over value creation but in our connected world we are only ever one smart competitor away from trouble. Can you optimise your IT organisation and business around innovation and still keep costs down? In this talk we will explore some of the forces that act on business to stifle innovation and explore some ways that teams, IT divisions and businesses can organise to take advantage of the new opportunities our online world offers. This is a talk about Lean, Organisational Design and the perils of matrix management (its 45 minutes of free consultancy, don't tell everyone or they'll all want to come...)

1. Growing a culture
of innovation
James Lewis

2. Introduction

3. Who am I?
James Lewis
Engineer, TAB

5. TAB
Technology
Advisory Board

6. TAB
Technology
Advisory Board

7. virtual body
TAB
Technology
Advisory Board

8. virtual body
face to face twice a year
TAB
Technology
Advisory Board

9. virtual body
face to face twice a year
TAB
all things technical at
ThoughtWorks
Technology
Advisory Board

10. virtual body
face to face twice a year
TAB
all things technical at
ThoughtWorks
Technology
advisors to the CTO Advisory Board

11. radar

13. next edition ~ 6 weeks

14. a talk in three acts...

15. a talk in three acts...
Act I whats all the fuss
about?

16. a talk in three acts...
Act I whats all the fuss
about?
Act II traditional methods

17. a talk in three acts...
Act I whats all the fuss
about?
Act II traditional methods
Act III innovation done right

18. Act I
What’s all the
fuss about?

19. new competitors,
global markets

20. lean startup

21. Lean Start Up Principles!
Entrepreneurs are !
everywhere"
Entrepreneurship is management"
Validated Learning"
Build – Measure - Learn"
Innovation Accounting"
"

22. So far, so hipster

23. it turns out that
organisational health
is a competitive
advantage

24. • “Organizations that focused on performance AND health
simultaneously
• were nearly twice as successful as those that focused on
health alone,
• and nearly three times as successful as those that
focused on performance alone.”
Beyond Performance: How Great Organizations Build Ultimate
Competitive Advantage, Scott Keller & Colin Price (McKinsey
& Co.)

25. Surveys: 600,000 respondents, 500 companies
6,800 CEO’s & senior executives
Reviews: 900 books & academic journals
Personal interviews: 30 CEO’s
Data from: >100 McKinsey clients
Beyond Performance: How Great Organizations Build Ultimate
Competitive Advantage, Scott Keller & Colin Price (McKinsey
& Co.)

26. intangible assets
are becoming much
more valuable

27. this is recognised on
your balance sheet

28. these are recognised in market
capitalisation
photo of intangible asset - people or something

29. Impact of Intangibles on Market Value
Year Intangible % Tangible %
1982 38 62
1992 62 38
2000 85 15
How Leaders Build
Value,
Ulrich & Smallwood

30. what sort of
organisation are you?

31. Act II the usual approach

32. explore vs
exploit

33. we often start value driven and become cost
driven

34. we often start value driven and become cost
driven

35. we often start value driven and become cost
driven
exploring exploiting

37. established corp, founded 1955

38. established corp, founded 1955
Uses punch cards and tapes
First in the industry to …
Rapidly gaining market share
X

39. established corp, founded 1955
X

40. established corp, founded 1955
50 years on...
X

41. established corp, founded 1955
IT is a cost centre
One developer is much the same as
another and one language is much the
50 years on... same as another
Standardisation and cost-control are
key factors
X

43. newandcool.com, founded 2012

44. newandcool.com, founded 2012
-Operating procedures adapt to suit
demand
-Finding and keeping the best developers
offers a competitive advantage
-Anything that gives faster time to
market at high quality is worth doing
-Innovation and value-delivery are the
key factors
X

45. newandcool.com, founded 2012
X

46. newandcool.com, founded 2012
now what?
X

47. do you allow
your people to
innovate?

48. do you allow
your people to
innovate?
how do you measure
them?

50. its relatively
easy to measure
“performance”
money saved
utilisation
story points delivered

51. and therefore usual
to incentivise
based on this
money saved
utilisation
story points delivered

52. but innovation
is difficult to
measure
so incentivising for this is really, really hard

53. agent theory

54. Agent theory
agent theory
you perform an activity; I pay you

55. but what if i
want you to do
two things..?

56. performance innovation

57. performance innovation
strong measures
strong incentives
weak measures
weak incentives

58. so which activity
are you going to
perform?

59. so, we are
<beep> then?

60. Act III
innovation
done right?

61. Daniel Pink, Drive: The Surprising Truth about What Motivates Us

62. high commitment
human resources

63. The Modern Firm, John Roberts, 2004

64. The Modern Firm, John Roberts, 2004

65. The Modern Firm, John Roberts, 2004

66. The Modern Firm, John Roberts, 2004

67. The Modern Firm, John Roberts, 2004

68. The Modern Firm, John Roberts, 2004

69. The Modern Firm, John Roberts, 2004

70. The Modern Firm, John Roberts, 2004

71. “egalitarian
values and
norms”

73. run a
sustainable
business

74. run a revolutionise
sustainable IT and
business champion
software
excellence

75. run a revolutionise advocate
sustainable IT and passionately
business champion for social
software and
excellence economic
justice

76. “rigorous pre-
employment
screening”

77. Valve
certainly
believe in
this

79. “self-managing
teams”

82. the role of
organisational
design

83. nokia

84. 1992 2000

85. failing logistics
EU’s highest
rubber failure led to
market
boots stock price
capitalisation
manufacture cut in half
1992 2000

86. failing logistics
EU’s highest
rubber failure led to
market
boots stock price
capitalisation
manufacture cut in half

87. failing logistics
EU’s highest
rubber failure led to
market
boots stock price
capitalisation
manufacture cut in half

88. failing logistics
EU’s highest
rubber failure led to
market
boots stock price
capitalisation
manufacture cut in half

89. failing logistics
EU’s highest
rubber failure led to
market
boots stock price
capitalisation
manufacture cut in half

90. failing logistics
EU’s highest
rubber failure led to
market
boots stock price
capitalisation
manufacture cut in half

91. “Why have we been a successful company?If you want a
very simple answer, it is getting the balance right between
innovation and execution” Jorma Ollila, Nokia CEO
failing logistics
EU’s highest
rubber failure led to
market
boots stock price
capitalisation
manufacture cut in half

92. “a strong culture
focussed on an
overarching goal”

93. mission driven
organisations

95. Summary

96. “Those are the only two choices. Win by being more
ordinary, more standard, and cheaper. Or win by
being faster, more remarkable, and more human.”
--Godin, Seth. (2010). Linchpin: Are You Indispensable?

97. people
architecture
routines
culture

99. • What type of organisation are you?
• exploring?
• exploiting?

100. • What type of organisation are you?
• exploring?
• exploiting?
• Focussing on health as well as performance is crucial
in our global marketplace

101. • What type of organisation are you?
• exploring?
• exploiting?
• Focussing on health as well as performance is crucial
in our global marketplace
• Be careful what you measure, because that is what
you will get

102. • What type of organisation are you?
• exploring?
• exploiting?
• Focussing on health as well as performance is crucial
in our global marketplace
• Be careful what you measure, because that is what
you will get
• for knowledge work, maybe high commitment HR
can help

104. you can’t build a culture
of innovation

105. you can’t build a culture
of innovation
but with purpose and leadership you can put the routines
and architecture in place for it to flourish

106. Thank you!
@boicy
http://bovon.org
jalewis@thoughtworks.com

107. is hiring
@boicy
http://bovon.org
jalewis@thoughtworks.com