Copyright © 2014, Intellyx, LLC

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The Paradox of Data-Driven Innovation

Jason Bloomberg

President

jason@intellyx.com

@theebizwizard

About Jason Bloomberg

• President of Intellyx

• Advise companies on their digital transformation initiatives & help vendors communicate their agility stories

• Write for Forbes, Wired, & DevX on Digital Transformation

• Buy my latest book, The Agile Architecture Revolution

Copyright © 2014, Intellyx, LLC2

Henry Ford & Innovation

Only Ford never said anything of the sort!

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If I had asked people what they wanted,

they would have said faster horses.

The Real Story!

Leveraging economies of scale so that much of the population could afford an automobile for the first time

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Contrary to his true innovation

Any Color, as Long as it’s Black?

• Economies of scale limited ability to respond to changing market pressures

• Primary long-term benefactor of Ford’s take on innovation?

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General Motors

What about the Data?

• Huge quantities of Big Data about customer preferences & behavior every minute

• No end of fancy tools for analyzing those data

• For every Sony Walkman or Apple iPad, hundreds of less successful innovations

• With all these Big Data, why aren’t we better at innovating?

Copyright © 2014, Intellyx, LLC6

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Data & Innovation at Cross Purposes

• Data analysis better suited for optimization than innovation

• As we leverage data to get better at marketing, we’re making decisions that stifle innovation

• Incessant march toward “better-faster-cheaper” making us more brittle, not more innovative

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How do You Manage?

• Each Line of Business/Division has its own goals & business outcomes

• LoB Management drives toward optimizing those outcomes

• Maximize shareholder value/profit/revenue

• Better-Faster-Cheaper, then repeat

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The Problem with Better-Faster-Cheaper

• Both technology and the organization become brittle

• Unable to deal with unexpected situations

• Innovation requires a different approach

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Organizing for Innovation

• Move from high connectivity to low connectivity

– Provide flexible technology

– Autonomous, self-organizing teams

– Teams must cut across organizational silos

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Optimization vs. Innovation

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InnovationDisrupt status quo

to allow human creativity to

flourish

OptimizationEstablish

feedback loops that maximize

business outcome

Optimization Pitfall

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The Problem of Local Optima

Innovativeness

• The ability to introduce change into the business environment in order to achieve a strategicadvantage

– New products or services

– Expand market share

– Enter new markets

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Innovation Requires Disruption

• External Disruption

– Competitive pressures/new entrants

– Globalization

– Regulation

• Internal Disruption

– Digital Transformation efforts

– Innovation initiatives

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Disruption Introduces Risk

• Optimization without disruption stifles innovation

• Disruption without optimization is an innovation crap shoot

• Optimize what you can & disrupt what you must

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Recipe for Agility

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New Role for Management

• Leverage data to properly balance optimization and disruption

• Essential for achieving market-leading levels of innovation

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Better Way to Manage

• Build cross-organizational teams

• Leverage data to understand when to optimize and when to innovate

• Embrace disruption

• Give people the tools they need and get out of their way

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Jason Bloomberg

President, Intellyx

jason@intellyx.com

@theebizwizard

Send email NOW to dm@intellyx.com to download this presentation

Thank You!