Agile Innovation and Problem Solving Skills
Agile Innovation and Problem Solving Skills
According to BusinessDictionary.com:
Information
Imagination
Initiative
The formula for ROI is the total benefits less the total
costs normalized by the costs.
Baseline Original
Performance – Measure
initial business process
costs and throughputs
Measure Performance
with New Capability –
evaluate new operating
throughputs and costs
o What's Different or New in Value? - this comes from the change in throughput
and cost
o What are the Existing Resources? - these are the organizational resources (mostly
people!)
o How can we know that ROI is positive? - the change in throughput and costs must
be positive
o Does size of a project impact if the ROI is positive? - nope! Only the size of the ROI
is impacted by the size of the project.
Innovation Challenge:
o Schedule
o Budget
o Scope or Objectives
We always to have to start with understanding the buyer's system. This is foundational for being
able to address the primary points of failure on a project, and proactively do the following:
The buyer's system could be an organization, a restaurant, how a child plays with a toy and learns,
or it could be manufacturing plant. Every system, no matter how complex or involved with people,
regulations, etc., has one similar feature:
Every system is limited by its constraints, and there is usually one primary constraint: "the
bottleneck"
The bottleneck is the point in your system that is most constrained. Indicators of a bottleneck are:
This process has gathered a large (usually the largest) backlog of work
The nature of bottlenecks are that no matter how much you speed up other parts of the system, it
won't effect the throughput. The bottleneck limits the throughput once the system has started up.
This means that most efforts to add capabilities will be worthless, and even efficiency focused
projects are likely to have major impacts if they don't somehow interact with the bottle neck.
This graphic helps explain the concept and shows why we always say in the Agile Project
Management series "Speed Wins!"
This graphic shows that while you can subordinate to the bottle neck by slowing down upstream
processes, and this is good to do for many reasons, it's not the MOST beneficial step. By far,
speeding up the bottleneck will reap the largest rewards to the buyer. Speed wins.
To learn more about how to go faster on your projects, feel free to Audit or Verify for the course
"Driving Speed through Agile Planning:" https://www.edx.org/course/driving-speed-through-agile-
planning
The old world of accounting, on projects and in organizations, look for performance against a
benchmark. It's called "Cost Accounting" and it focuses on maximizing local efficiencies or
adherence to plans.
Throughput Accounting is the opposite of Cost Accounting. Like in the diagram above, it advocates
for inefficiencies in local processes, like Process A, in order to save on inventory costs from piled
up work-in-process or "WIP." Throughput Accounting takes a global view, and helps ensure that
the system is the focus:
The key to understand that local performance often creates waste. This means we can slow down
processes that are not the bottle neck, which in turns reduces costs of operation and reduces the
waste created by having "work in process" or "WIP" waiting to be done.
Often times our systems are too complex and opaque to model accurately
The best way to know if we've hit the bottleneck, or a feeder to it, is to
test our solution
This "systems-thinking" is essential to unlocking solutions for you buyer. This understanding is step
one, but then the question become: how do we find these bottlenecks? How do we test solutions
around them?
Agile is the answer. We develop incrementally and iteratively to test and refine solutions until we
really move the system performance. This is done by "testing solutions in the buyer's system:
Of course, this means we're taking a "risk" with our solutions. Often it's not ensure that simply
"testing solutions" will work. There's inherent uncertainty, both quantified as risk and general
uncertainty that impacts our chances.
There are also numerous ways that we account for these uncertainties, but the often fall into
three major groups:
Of all the uncertainties list and not listed, there is one that matters most, and defines the worst
possible outcome:
If the buyer or organization decides your product or service just doesn't work for them - then your
project is a total failure! There is no recovery. It should always be the focus of every project
manager to ensure the project outcome is what the buyer needs.
Note the Savvy Project Manager will know how to make uncertainty work for them (and if you
don't know how, then you should definitely take the Driving Speed through Agile Planning course)!
And uncertainty is the core source of opportunity to innovate!
For this reason, we say "Innovation Management is actually Risk Management."
Summary of Innovation:
Ideas - the output of the learning process that helps inform what
should change about the product to learn more
The goal of the Build-Measure-Learn cycle is used to test hypotheses of the Product-
Market Fit
Marketing - how you reach your customers and the strategy for
moving them through your sales funnel
"Problem-Solution" fit -
proves that your solution
could be useful to your
customer, can be
unprofitable at first
"Business Model" -
delivery hypothesis
proving you can profitably
run the business, usually
means lowering
production or service
costs
"Zoom-Out" - change to
add more services or
product around your
original MVP to fully meet
the need
"Customer Segment" -
realize that you've
targeted the wrong
segment in your market,
adjust to new subgroup
"Channel" - your
customers are
somewhere else! Time to
switch to the channel
they like (maybe even
direct mail!)
Paid - you pay to get customers and they pay you more back in total
revenue from sales (traditional)
Sticky - as you get customers you keep them, it's all about lifetime value,
so you focus on retention
source: https://commons.wikimedia.org/wiki/File:Etapas_do_Customer_Development.svg
When do you stop searching? How do you know when to move and "cross-the-chasm"
from the innovators and early adopters to the early majority? ..... Well can you answer
seven (7) questions?
Design Thinking - starts with a customer, identifies the need, and then
searches for a solution (product or service)
Both of these processes use the Build-Measure-Learn Cycle from the previous lesson
The best way to understand the differences is to look at the Value Map
You may remember this value map explained in the Driving Speed
through Agile Planning course.
Solution-based solving
tests solutions
Tangibility Rule –
prototypes facilitate
discussion
Now let's come back to where we started - it's all about the buyer's system!
There are a few key tools we'll borrow from the Theory of
Constraints to make sure no matter what we do, we target the
bottleneck effectively
Five Focusing Steps - also known as the "Process of On-Going Improvement" or "POOGI"
A - the objective
The tools that are fully described in the Agile Leadership course in this
series, include understanding conflict modes from Thomas Kilmann:
Description of Image: "Shows the Thomas Kilmann Conflict Modes, which includes styles along a
matrix of assertiveness vs cooperativeness. The styles are: Competing (Win-Lose); Avoiding (Low-
Lose); Compromising (Win Some-Lose Some); Accommodating (Lose-Win); Collaborating (Win-
Win)"
Competing (Win-Lose);
Avoiding (Low-Lose);
Accommodating (Lose-Win);
Validate Objectives
However, experts are often wrong because they are NOT the
customer
source: https://www.palmcenter.org/first-study-
openly-gay-military-service-finds-non-event-one-
year-mark/
Case Study 2: Guardians of Peace Program
“So here we had people willing to call when they saw the bad guys…..but when the bad guys came
they couldn’t because the phones were down!” - Soldier Testimony from the book Mindwise by
Nicholas Epley
"Increased cooperation
between locals, military
leads to several caches,"
May, 2011
http://www.centcom.mil/
MEDIA/NEWS-
ARTICLES/News-Article-
View/Article/884308/incr
eased-cooperation-
between-locals-military-
leads-to-several-caches/
Traditional Systems Engineering says you should “Put Yourself In The Client’s Shoes”
A Couples Experiment:
Results
Power of Storytelling
Leading executives
Encouraging Cooperation
Encouraging Empathy
Increasing Retention
A Character
A Need
An Emotion
"When the woman spoke English, the volunteers understood her story, and their brains
synchronized. When she had activity in her insula, an emotional brain region, the listeners did too.
When her frontal cortex lit up, so did theirs….
by simply telling a story, the woman could plant ideas, thoughts and emotions into the listeners'
brains."
source: https://lifehacker.com/5965703/the-science-of-storytelling-why-telling-a-story-is-the-
most-powerful-way-to-activate-our-brains
These responses have been proven by using devices like the FNIRS
machine shown here: