Managing successful software innovation in NZ A retrospective and a look at complexity

Holger Spill Ministry for Primary Industries

Co-AuthorDavid MasonVictoria University of Wellington

NASA, via Wikimedia Commons

How do you manage innovation?

Innovation is a process with a number of distinctive features which have to be managed.

Theoretical conception

Technical invention

Commercial exploitation

INNOVATION

Creation of new knowledge, dominated by universities and large science-based

organisations

Conceptual framework of innovation

Science and technology

base

Technological developments

Needs of the market

Technology development,dominated by organisations

Consumers express theirneeds and wants

Slack and Innovation

Managing uncertainty is a central feature of managing the innovation process.

Most software is not a predictable or mass manufacturing problem.

The details are overwhelmingly complex for people.

Various forces lead to changes or enhancements in requirements.

Software is new product development

New product development process is a sub process of innovation.

Ideas & Trends Research Development Commercialisation

Issues in Software Development

• Software development methods• Managing developer teams• Experimentation during NPD

NPD of Innovative Software

• How to manage • How it affects the process

Kinds of Complexity

• Software is infinitely malleable• Software is intangible• Few barriers to setting up business• Start up costs are low• Consumers play a different role• A particular programmer can

have a huge impact.

Challenges

"All human activities are events, and events have duration.“

Time Span is used to measure the complexity of the task.

What is Complexity?

TimeTime

# of Decisions# of Decisions

Unknown FactorsFactors

Strategic PlanningTactical

Market ResponseFeedback

Technological outcomesTechnology

Ambiguity

Brown, 2011Elliott Jaques (1917 – 2003)

What is technically possible

A. J. Berkhout, 2008

Scientificresearch

Technologicalchange

Productdevelopment

What is socially desirable

A. J. Berkhout, 2008

Scientificresearch

Markettransitions

Productdevelopment

The Cyclic Innovation Model

”The role of entrepreneurship in innovation,” by A. J. Berkhout, D. Hartmann and P. Trott, 2011, International Journal of Entrepreneurship and Innovation Management, 14(1).

The Cyclic Innovation Model

”The role of entrepreneurship in innovation,” by A. J. Berkhout, D. Hartmann and P. Trott, 2011, International Journal of Entrepreneurship and Innovation Management, 14(1).

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NZ Sample Firms - High Tech Software Companies

Business Size Age Cust Product

DigitalDeal Large Established C, B Online TradingWebfabrik ME Start up B, C Manuf. Software

CloudWay ME Start up B, C Cloud Services Medimage SME Start up B, PS Medical Imaging

Cybersoft Large Established PS, B, C Fraud analysisFinancialware Large Established B, C, PS Finance toolsBizware SME Growth B Management toolsInfotree SME Start up B Business Software

B=business, C=consumer, PS=public sector

Measuring Complexity - Simplistic

Berkhout, Hartmann & Trott, 2011

Science

Product

Technology

Market

2-level company

Science

Product

Technology

Market

3-level company

Measuring Complexity - Granular

Science

Product

Technology

Market

Company AThese 2-level companies do not have the same complexity.

Science

Product

Technology

Market

Company B

HypothesisMatching organisations will have matching management styles.

Company A

Company B

Company C

Company D

Non-Matching organisations will have different management styles.

Mapping Complexity

Company Technology Science Product Market

Bizware Med Low Med High

Webfabrik Med Med High High

Financialware Med Low High Med

Cloudway High Low High High

Medimage Med High Med Low

Cybersoft Med High Med Low

Digitaldeal Med Low High Med

Infotree Low Low High High

Science Complexity

Company Technology Science Product Market

Medimage Med High Med Low

Cybersoft Med High Med Low

New software products which are spin offs of world-leading academic research.

Medimage• Well-established company• Large customers and market pull• High levels of quality and reliability• Customer led

Cybersoft• Newcomer• Large customers and market pull• High levels of quality and reliability• Customer led

Use a formal specification-driven software development process

Product Complexity

Company Technology Science Product Market

Financialware Med Low High Med

Digitaldeal Med Low High Med

Local leaders with an edge.

Financialware DigitalDeal

Use a flexible iterative development process

• Constant extension, optimisation and modification …• Spin off products …• Science is only used to understand online behaviour …

Dissimilar Complexity

Company Technology Science Product Market

Cloudway High Low High High

Cybersoft Med High Med Low

Cloudway• Challenging international competition• New untried products• Keeping up with fast paced market• Technology Led

Cybersoft• Local niche market• Large customers and market pull• High levels of quality and reliability• Customer led

Constant Experimentation Stage Gated Process

Emerging Themes

The CustomerA special role in new software.Negotiating priorities. Mutual discovery. Delivery and Desirability.

WorkflowAll worked in iterations. Could be within waterfall, agile, stage gated.Lightweight flexible specifications.

TeamsFour to seven people.Unsupervised, self managing, goal directed.

FreedomFree time to develop personal projects. Internal competitions for new features.

Maturity

Established

DigitalDeal, Financialware, Cybersoft

At least one established product

Well defined workflows, Efficiency

vsCreativity

Openness, self managed teamsEncouragement of experimentation

Emphasis on team fit

Startups

Webfabrik, Infotree, Cloudway, Medimage

Chasing emerging markets

Flexibility, adaptation, scanning

vsActive support of team members

Intervention to teamsNetworking

Outlier

Bizware

Working for your customer's customer

Governance of processMutual discovery of needs and

featuresDeveloping close trusting

relationships

TheCyclic Innovation Model

as a lens for analysis

Insight into managing innovation

A measure for

Complexity

Thanks for listening…

Holger Spill Ministry for Primary Industries

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