Disruptive innovation in Iași corporate IT?

Innovation is an often used word, but few would argue that it's also used far too lightly. Ignoring the hyperbole of HR ads, let's look at a potential way in which IT corporations in Iași, including local branches of multinational doing services and outsourcing, could engage in some radical innovation.

Continuous improvement style of incremental innovation is a much more familiar ground for most. Tweak an interface, update a technology, make something somewhat faster, or cheaper. Good teams working in usual ways, integrated into the larger organization can deliver this kind of innovation if given a budget and a project.

When it comes to radical, disruptive innovation, to getting something genuinely unexpected, things change, and the main hurdle may not always, or even mostly, be a technological or a skills one. 

Imagine a team inside a corporation tasked with bringing about radical innovation in an area. They are given time, say 6 months, or 12 months, and complete freedom. This is already hard to imagine. A budget holder will complain about them not being billable, un-utilized in commercial work. As soon as one of the commercial projects hits problems, those managers will do their best to recruit these valuable people into their teams to work on their very real and urgent production issues, for which a customer is paying good money by the way. If the team tries to work in very different ways than usual, the heads of engineering will complain about them not following practices and agreed technical standards. If they need a server, or a piece of software, they will have to go through the slow and pain in the neck corporate requisition process designed to control and standardize, which is the opposite of what they need. Not even mentioning ISO's and security certifications to follow. Yeah, and stick them in the open space somewhere, and have them come back 3 months later saying they need to throw everything they did away, because they just realized that's not the way to go. The entire organization will fight them at every step, because the corporation, its culture and its processes are designed for something else entirely: predictable delivery of financially profitable services. Unless the radical innovation team is under the personal and energetic protection of an extremely high ranking executive, and even then, this a futile exercise. 

What can be done?

The solution is the classic spin-off from The Innovators Dilemma: chose a small team of independent thinkers that want to do this and which, between them, have all the skills they need, setup a different company, rent an apartment for them somewhere far from Palas, or any place that looks nothing like a corporate office, give them a credit card and tell them to take care of themselves. If they want coffee, they'll buy their own coffee machine and make their own coffee. If they need a server, they will go and buy some cloud. If they need a laptop, they will go buy a laptop. If they want to go out and celebrate, they will go out and celebrate. Set up a distinct SRL (not technically required, but it's that level of separation you need) and remove them completely from each and every process and department from the main company. They can't be touched by anyone from the main corp and they can't touch anyone from there. If exceptions need to be made (such as access to very expensive testing equipment back in the main office or access to key experts), make sure it's done in such a way that it doesn't diminish their independence. You and maybe a few other trusted individuals are the only ones allowed to go and check on them, and make sure you don't do it too often. 

How will they work? They will have to follow a validated learning, MVP driven approach as described in The Lean Startup. This will allow to them navigate extreme uncertainty in a way that is creative but managed at the same time, which will make it possible for them to come up with truly surprising ideas and products for markets that may have been previously ignored. In other words, disruptive innovation. The final validation you're looking for should, as often as possible, be them actually selling, by themselves, of whatever they come up with to real clients. In other scenarios, you may take the prototype they come up with and pass it to a regular team in the larger company to refine and polish, for sales to price and sell etc. This second option may sound safer, and it's definitely more familiar, but there are many reasons why the former is better. They don't all need to be experienced entrepreneurs, they just need the mindset for it, but the leader of the team needs a good understanding of the kind of innnovation and delivery practices described in The Lean Startup. 

Why is Iași good for this?

We're starting to have the critical mass of seasoned seniors and creative juniors. The human capital is here. The cost structure is also in our favor. 250.000 EUR will buy you a 5 people strong spin-off for a year, including setting it up, salaries, a small office for them, infrastructure, the cloud they need, a small marketing budget, a travel budget to go meet potential clients, and all the coffee they can sip, pizza they can eat and shots they drink on their nights out. This is excellent value and very good price for an experiment of such potential benefit. Sure, small and medium companies simply won't have this kind of cash to spare (they can try even smaller, scrappier teams), but large corporations spend this and more anyway every year in all kinds of internal innovation initiatives. This is a way to take a shot at the big prize. 

What would they work on?

Whatever is worth it for you, but here are some questions I could see such spin-offs working on, probably relevant to real multinationals operating in Iași:

  • What kind of insurance would young people buy?

  • How can you convince millennials in CEE to want to buy more clothes online?

  • How will cryptocurrencies change banking?

  • What will make people willing to pay for online newspapers?

And so on. It's probably best, although exceptions can be made if there's reason, to ask these teams to focus on the CEE market, as this kind of innovation will depend on a good understanding of the market, early validation and interaction with clients. Their capability to imagine new products in new ways is usually more about understand what can be built for who, rather than how

How do you make this happen? You identify a team among your workforce, identify a problem statement, an area, relevant to your business, and then you build a case and sell it internally to your headquarters, as high up as you need to go for this kind of decision. You train yourself in lean startups so you can be a good sponsor for the spinoff, there when they need you but also giving them the space they need. 

Why would the team do this? People love great work and some of them will love the extreme freedom. Find them, find the people that are frustrated and tired with the business as usual and have the fire and the skills to make it in a spinoff. Why would they do it for the corporation and not for themselves? It's safer, they get to be paid their usual salary while they also try something truly different and unlike anything else they've done before and from which they'll learn a ton. Yeah, once they get a taste for it and they succeed at something, some may leave and truly go out on their own. By then, you've gotten your money's worth and more.