Economic necessity: reaping innovation’s rewards

21 04 2009

In a previous post, I discussed the role of constrained resources in innovation.  I strongly feel that it behooves companies to create a culture of innovation by rewarding employees for their novel ideas with more than “not getting fired.”

Users develop solutions from actual problems or opportunities on the front line.  These projects can lead to significant innovations.

I like the story of Dynamic Matrix Control (DMC). If it weren’t for a long-term strike at a Shell Refinery, this new way of controlling operations would never have come to fruition.

Innovation comes in many different shapes and sizes.  Creating DMC and turning it into its own business is more of an exception than the rule.  But measureable improvements abound when users are allowed to be creative.

Discouraging user curiosity and innovation = No

User-created applications should be considered like a prototype or a pilot in order to demonstrate value to the business.  The lessons learned and the new methods identified during the process of user experimentation  are the important part.

If you can gain competitive advantage through innovative users, the implementation is almost immaterial.  Reaping those rewards and scaling them out should be the company’s objective.

Stop “re-discovering” improvements

Keeping that newfound advantage sustainable may be difficult.  At some point a line will have to be drawn where the homebrew application or practice becomes more than a prototype or idea.  Endorsement and adoption are required to maintain the gains.

If a user-created spreadsheet, application, database, or portal site becomes mission-critical, you need to consider how to make it supportable.  Knowing that the discovery process is more important than the resulting application is part of the battle.  You also have to know when it’s crossed that boundary from prototype to viral adoption.

(Hint: if IT gets feature requests or support calls about a spreadsheet, it’s time to consider an alternative.)

Knowing the playing field

Innovation is often a double-edge sword.  Homebrew applications may supplant existing applications to avoid maintenance fees or upgrades.  But in the long run, custom applications will grow difficult to maintain with a decades-long lifespan.

A software vendor that’s in touch with its user base should be listening intently to how its users are trying to cut costs or improve margins in their business through software and applications.

Vendors need to collaborate with customers – if there is an opportunity to help users innovate on an established platform, it can be more sustainable in terms of costs and longevity of the customer / vendor relationship.

The costs of custom applications can grow in an almost undetectable fashion.  Even though there is no “code” in a complex spreadsheet, companies must consider the implications of change management, feature requests, and validation procedures.

Ultimately it comes down to whether or not a customer is in the software business. Some applications will work once will not be revised again unless something significant breaks.  Will the author still be around to fix it?

Call now, or re-sell later

Everyone is locked in a tug-of-war over resources.  Users need to demonstrate value to keep their job relevant.  Software companies need to keep their user champions successful or else they will risk having to re-sell their offering in the future.

Innovative vendors can help customers and themselves by reaching out proactively to create a licensing, training, or incentive program that ensures users can succeed.  Vendors also get access to valuable feedback about the product.

In these times of economic stimuli, vendors should take a page from the administration and bail out its users.  When users keep their jobs, vendors win too.



One response

22 05 2009
Flexibility is not strategy (part 3) « Spackle

[…] current niche-occupiers, that means new threats won’t necessarily come from outside (but maybe from homegrown […]

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