Innovate to survive

As any Business Analyst will tell you, “change” is essential for just about any business to survive. Organisations need to be constantly innovating, ensuring that they are delivering the precise goods and services that their customers want, need, demand and desire.

The trouble is, change can be scary. It can threaten norms and values that are long established within an organisation. It can cross boundaries, threaten empires and even threaten “the way things are done round here”.   A CEO who decides to ditch his/her primary product line is very brave indeed!*

(* But did you know Nokia used to make paper, rubber and cables before they branched into consumer electronics?[1])

Many authors have produced models of the ‘change lifecycle’.  Whichever model you follow, innovation is likely to involve four broad phases:

1. Identifying the need for change (Seeing the problem/opportunity)

2. Analysing the options, making a decision and planning the change (Innovating)

3. Implementing the change (Doing it)

4. Sustaining the change (Making it stick)

Some companies never even get to step 1.  They flounder with existing products or services and never quite reach their true potential.  Eventually, they’ll probably cease trading.  You can probably name a few.

Some companies get stuck on step 1 or 2, or spend so long on step 2 that their innovation is largely irrelevant by the time it is delivered.  Truly successful companies need to cover all four, and need to be constantly responding to opportunities and changes  in their environment, in a timeframe that puts them ahead of their competitors.

All of this requires sound Business Analysis, fit-for purpose Feasibility work and pragmatic Project Management.  However, for this to work at all the organisation must support and encourage change from the top down.    Everyone should be empowered to look for (and suggest) the ‘next big idea’ – even if this idea might not be ‘palatable’ to those in charge!

Does your organisation encourage innovation? What would need to change for innovation to be even stronger?


[1] See http://www.nokia.com/about-nokia/company/story-of-nokia/nokias-first-century

Do *you* look beyond 80/20?

Pareto was an Italian industrialist, sociologist, economist, and philosopher. [1] Today, we often take his name to be a synonym of the much quoted ‘80/20’ rule.  This rule is used generically to hypothesise that 80% of an event’s effects come from 20% of it’s causes.  Pareto observed that in Italy in 1906, 80% of the land in Italy was owned by 20%[2], and this is widely believed to be where the principal of 80/20 originated.

This is often used as a ‘rule of thumb’ in a business context.   A regularly cited example is that 80% of sales probably come from 20% of your clients.  Pareto analysis can be used to prioritise clients, bugs, projects or just about anything that exists in a business, project, department or organisation.   The trouble is that people focus on the proportions ’80/20′ rather than analysing the underlying data.  Whilst chopping things up into the classic proportions of 80/20 is convenient for ‘rough and ready analysis, it could lead you to the wrong conclusions.

What if you found that 95% of your sales revenue came from 1% of your client base? If you know this, would you change your Customer Relationship Management (CRM) strategy?

What if 20% of your software project spend delivered 95% of the desired functionality? Would you revisit your project scope, critically evaluating the value of the remaining 5% of the functionality?

Pareto analysis can be incredibly illuminating, especially when we look beyond the ‘80/20’ rule. The truth of the matter is that 80/20 might not be the right proportions for the particular problem you are trying to solve.   It’s far more important to take a practical view, based on your project or operational objectives, than to stick slavishly to proportions which actually date back to Italian land ownership!


[1] http://en.wikipedia.org/wiki/Vilfredo_Pareto

[2] http://en.wikipedia.org/wiki/Pareto_principle