Balance innovation and predictability with the Innovation Slider
Where is your project on the following scale?
Every time I meet a client to discuss their new project plans, I encounter the same question:
"I want my software to be unique and different. How much will it cost?”
The problem is that unique products and true innovation are difficult to estimate, and even harder to accurately budget for. Helping a business find the balance between the innovation they need, and the predictability they want led me to create the Innovation Slider, a tool you can use to harmonise the split between innovation and predictability in software projects.
Introducing this slider in discussions with my clients completely changed the dynamic of project negotiation. The slider made the topic visible, prompting discussions that everybody in the room needed to have, but were afraid to raise. It actually exposed the innovation-predictability dichotomy and, instead of locking the conversation in an infinite loop, provided a framework for discussion based on goals rather than fears. In this article, I will explain why I believe this happens and how you can use this technique in your next discussion with your own stakeholders.
Software is complex because it’s different every time
First, it’s good to understand why the issue of complexity is such a big topic. Every time we build a new piece of software, it will be built in a slightly different way. It might have a custom interface, require integration with other systems, or need a combination of modules, but we always end up with different software, no matter how much we try to reuse components. The truth is, everybody wants to save time and money by reusing components, but not many want reused software. But creating an innovative product or service isn’t always straightforward.
True innovation is rarely predictable
Liz Keogh loves to tell the story of a company called Ludicorp that built a web-based game called Game Neverending. As one of the iterations of that product, Ludicorp built an online photo-sharing service where players could share their in-game screenshots, but players began to share their personal pictures and photos instead. The photo-sharing service soon outgrew the game itself and went on to become Flickr. Game Neverending was cancelled in 2004 and Yahoo acquired Ludicorp and Flickr in March 2005 for an estimated $22-25 million. Nobody, including Ludicorp, could have predicted that when they set out to build a game, that they would end up building Flickr. That is pure innovation.
Estimation never yields innovation, because it's nearly impossible to accurately estimate something nobody has done before. Ludicorp couldn't have planned and estimated the arrival of Flickr - it took experiments and its own user base to create the final product. That is how you innovate - you invest in creating conditions for innovation and you try many things, hoping some of them will flourish. Sometimes you succeed, like Flickr, and sometimes you don't, like Game Neverending.
Here lies the biggest problem with innovation; most people are very uncomfortable in uncertainty. Not being sure of your expectations and not knowing exactly what steps you need to take is hard for most people. We know we need innovation, but we constantly kill it by craving predictability. So, how do you help stakeholders find the balance?
Estimate the predictable and timebox the innovation
How much software innovation does your business need? And how much of its delivery should be predictable? I find it extremely fun to put this slider in front of business stakeholders and ask them to place a bar on the sliding scale where they want their project to be. Some put the bar close to 100 per cent predictability (not quite 100% though), but most of them lean towards innovation. We've been conditioned by the market to believe that innovation is required in our every endeavour, but aren’t always told that it means letting go of certainty.
Most recently, I used the slider with one of my eCommerce clients that were selling high-value products, but wanted to use their existing eCommerce platform as a baseline. I put the line with predictability on the left and innovation on the right on a whiteboard and asked their stakeholders to put the dot where they saw their project. They put the dot firmly at the predictability end. And so I began my questions:
"So you don’t want custom design? The native design will fit well with your brand?"
The dot moved towards innovation.
"What about integrations? Is your warehouse the same as every other?"
The dot moved even further away from predictability.
We ended with a balance around 80/20 weighted towards predictability. We then agreed to split the project budget accordingly. Eighty per cent would be spent on predictable features. The client would know exactly what they would get for their money because we will reuse something we already built in its exact form. The remaining 20 per cent would go towards innovation where we could work through a backlog of experiments, but would be uncertain how much value that work would yield because it had never been done before.
Once you have used the slider for the budget split, you can keep using it for your Agile iterations. If your split is 80/20 and your velocity is 10 stories per sprint, you know that at least 2 of these stories should be prototypes. You can change the balance every iteration, but everybody on the team should be aware of the budget agreement they're working on in general. Some projects will require more innovation, whereas others will require more predictability. I find the slider creates a much healthier discussion than pretending that 100 per cent of software is unpredictable or that 100 per cent of projects are estimable.
Breakdown expectations, have difficult conversations early
Over the last year, I have consulted a number of clients and every single one of them showed attributes of wanting both the most robust, predictable, fixed-budget project feasible, but also pure innovation and new ideas to help the business solidify its place in the market. On many occasions, I used the slider to illustrate something everybody inherently understands - you can't have both, you need to let go of certainty for innovation, even if so slightly. It worked. Suddenly we progressed from the classic "I need to know exactly how much will it cost, but you don't want to tell me" deadlock.
Budget and planning discussions are always difficult. If you find yourself in situation where you need to convince somebody much more senior in your organisation, the slider can help broach these difficult conversations head on, without threatening either progress or budgets.
If you want to read more, I’ve included a list of articles and materials below that influenced my thinking. In addition, I would very much like to hear your own thoughts on the matter. Do you see yourself using the slider with your own business stakeholders or clients? Leave your comments below or on Twitter mentioning me (@everzet).