Breakthrough Blog

Another way companies are breaking down the barriers between themselves and their customers or other folks outside is via “crowdsourcing.” That is a way to get people on the outside to provide value to the organization on their own time. It is essentially the open source model applied to more than just software.

STRIKING GOLD
The best example I know is the Goldcorp story. Their president put all their proprietary geologic data for a mine on the web and held a contest. The winners with the best ideas of where to drill would share half a million dollars. The diversity and originality of ideas they received was far beyond anything they anticipated. Years later they were still drilling sites suggested by contestants. They were mining so much gold they were the only gold mining company that was stockpiling for better prices in the future. Furthermore, their stock price went up thirty fold. (See Taylor’s book referenced below.)

ADVANTAGES
The internet and the decentralization of expertise has enabled crowd sourcing and it is typically used to develop solutions. That is at the back end of the product development process. Companies can gain key advantages via crowd sourcing.

LEVERAGE —
achieving goals not possible with a limited fixed staff
This is the advantage of scale. For example, large companies experience many more customer demands for new products than they can keep up with. Some have formed external networks to act in an advisory role or even do project work directly (as in the Goldcorp example) to develop more new products. NASA has used volunteers to process enormous amounts of data making images available months earlier and freeing up researchers to concentrate on higher end work. Google essentially uses crowdsourcing in the way it ranks pages for its search engine.

ORIGINALITY —
access to a larger number and far more diverse range of ideas than possible in-house
I think William Taylor says it best in this chapter title from his book Mavericks at Work: Ideas Unlimited: Why Nobody is as Smart as Everybody.

Inviting people from other boxes to work on your problem is a pretty easy way to get real “out of the box” thinking.

CROWDSOURCING AT THE FRONT END
I see parallels to the kind of work we do at the front end to understand the problems you should be working on in the first place. You can use crowdsourcing methods to find out what the most important problems are for you to solve, as well as to craft solutions. That is, from voice of the customer to voice of the collaborator. We have actually done both here.

For more,
“On the Edge,” by Tim Gilchrist, PMI Network, May 2007, p32.
Mavericks at Work, William C. Taylor and Polly LaBarre, Harper Collins, 2006. (See Chapter 4.)

This month a new book hit the market “Flexible Product Development, Building Agility for Changing Markets” by Preston Smith. Some of you might remember him from “Developing Products in Half the Time” which he co-authored with Donald Reinertsen in 1991. That was a seminal work in the time-to-market field. His new book could be another big step in thinking for product developers.

FULL DISCLOSURE
I probably should say at this point that I reviewed several chapters for Preston while he was writing the book. I am mentioned at the end of the book with the others that helped out. The small contributions I made show up mostly in the sections on customer needs and risk management. Even so, any bias you may detect here has more to do with how I see product development rather than any loyalty to the book.

IN A NUTSHELL
To oversimplify, Preston takes concepts from Agile software development, translates them, and where necessary adapts them, for people developing other things besides software. Hence, many of the concepts aren’t new, but will be new to much of the audience. At it’s core the material revolves around how to deal with change in a development project. It is that familiar struggle — setting the plan and requirements and working to them versus changing things late in the process. Scope creep and changes late in a project can blow costs and schedule off the planet. On the other hand, when the world takes a sharp turn on you, proceeding as planned can make the entire effort futile.

This book is about working so you can make changes later in a development project without disrupting the work or costs. It’s about knowing when to preserve flexibility, how to preserve it, and when you must make hard decisions. For me all this boils down to risk management, particularly trading off the risks on either side of these decisions. An interesting part of this book is that Preston goes beyond the typical risk analysis to discuss what to do about the unknown risks or the “unknown, unknowns.” (Now who made that phrase famous a couple of years ago? Never mind.)

WHY?
Preston thinks bringing flexibility to the product development process is increasingly important today. First, is due to an accelerating and increasingly chaotic world. Read that as shorter timelines, rapidly advancing technology, global competition and more knowledgeable customers (they use the internet). Second, is because current management processes reward rigidity, which then runs organizations into the buzz saw of his first reason.

COMMON SENSE
To me this exposes an open secret known to many who have labored under rigid development processes in the past or still do. That is, smart developers circumvent their company process when it becomes an obstacle rather than a support. These troublemakers know you can’t steam ahead when a sudden change in the marketplace or regulatory environment, or competition just pushed an iceberg in front of you. They know that salvation will come from reworking the plan, rather than working the plan.

If Flexible Product Development helps codify that common sense for more general use Preston will have helped product developers take another big step forward.

It is an easy read and I like that he ends each chapter with a summary list of the key takeaway points to remember.

Details

Two very different innovation conferences: The Front-End of Innovation (by PDMA & IIR) and TiECON East (by TiE-Boston).

PDMA = Product Development Management Association
IIR = Institute for International Research
TiE = The Indus Entrepreneurs

I’ve attended the last few FEI conferences and have also helped organize the VOC conference for PDMA/IIR. After attending last year, I helped work on this year’s TiECON East. Since I have had the perspective of an attendee and an insider now of both I thought I might be able to make a useful comparison.

LOCATION
Both have been held in Boston for as many years as I’ve known about them.

TIME
Both have generally been in May or June.

PRICE
No contest here. TiECON East was $300 compared to $2300 for FEI.

VALUE
This is where it gets interesting. Both programs were essentially the same number of days, with special evening events and big name speakers. Cost did not correlate to quality in terms of the speakers. Whereas FEI had a VP from Google, TiECON East had a founding board member from Google. You can go down the list like that. FEI had a number of CEOs and VPs, some you’ve heard of some you haven’t. TiECON East had some very big names we all would know. For example, Reed Hunt, the FCC commissioner responsible for the deregulation that led to the telecom industry we have today. Or, Patrick Deval, the Governor of Massachusetts, though he had to speak via videotape at the last minute. In fact, Senator John Kerry, who was not even in the program, dropped in unannounced to speak to us for about 20 minutes! Even at the same price TiECON East would have been more attractive. At 7 times less expensive it is a real deal.

SIZE
FEI had around 700 people, TiECON East had around 1200.

PHILOSOPHY
The most stark difference was here. IIR is a large conference organizing business that has a contract from PDMA to produce several of their conferences. My experience working with them on the VOC conference is that they are in it to make money. That colors their view of what is in the attendees’ interest. They also have a lot more say than volunteers on the PDMA side. So I saw them drop benefits to the attendees (like the book of slides) without the PDMA Chairman even knowing before we arrived at the conference. This is also the reason for the high cost. It was very hard to get innovative ideas into the conference because of the way IIR staff dominates what happens over the PDMA volunteers. There was a very large corporate feel to how they work. Not innovative (like what is preached at the conference) but what does happen is generally professional.

TiECON on the other hand was almost entirely done by volunteers from TiE-Boston. They had one group whose sole purpose was to come up with new and innovative ways to add value for the attendees (a very different mindset from IIR). At one point there were 8 separate initiatives being worked on. Some I’d never seen at other conferences. That fell to 5 due to the limited number of volunteers to work them. As in any volunteer effort, the quality varied, but the energy of the people involved was impressive. It should not be a surprise that working this had a feel that was more entrepreneurial. Not always efficient, occasional glitches, but great content and value for attendees.

ATTENDEES
Most of the attendees at FEI that I met are mid-level people working in large corporations. The next largest group may have been consultants and service providers. After that a few executives from smaller companies, academics, and press.

Most of the attendees that I met at TiECON East are entrepreneurs, wannabe entrepreneurs, officers in startups, venture capitalists, and service providers.

NETWORKING
I just told you whom you’d meet at either. Both conferences scheduled time and events for people to meet and network, from breaks to dinners. Unique to TiECON East was music and dancing at the end of the dinner program.

Some of the innovations at TiECON East were to help the right people find each other. For example, at one event a number of entrepreneurs got to give short pitches or set up tables. This was for attendees, not exhibitors, to make their case and get noticed by the right people. The exhibitors had their usual arrangement nearby.

EXHIBITORS
Speaking of exhibitors, at FEI they were almost entirely consultants, a few selling software and a business bookstore.

At TiECON East a lot of the exhibitors were VCs, bankers, and business service providers. There were some consultants as well.

RECOMMENDATIONS
First, you will learn a lot from both conferences. Neither is a waste of time.

FEI is a good conference if you’ve never been before and someone else (like your company) is paying the admission. Since I’ve seen speakers from the same big name places repeated year to year I don’t think it’s necessary to go every year (like I have been) especially if money is tight. It is expensive. It is particularly suited to you if you work for a large company. You’ll meet peers from other large to mid-sized companies and hear some very good speakers with experience relevant to you.

TiECON East is focused on a different market – entrepreneurs. This one is ideal for folks from small companies or anyone on a tight budget. Again, great speakers and interactive panel sessions but with a focus helping the little guy hit a homerun. (Read that as IPO.) They also seem to get bigger thinkers on the program.

On the topic of innovation, I’d probably recommend this for anyone. The cost is minimal. Moreover, the sheer energy of people excited with very new ideas is far greater. Folks from large enterprises won’t find as many peers but they will be exposed to new ideas and people for which innovation isn’t just their job.

The chairman of the FEI conference told me once that they studied small companies like the one I was with to “teach the big boys how to do it.” TiECON is a chance to mix directly with the little guys some of whom will change our world. The problem is you’ll have trouble telling who they are. Don’t feel bad. The VCs have the same trouble.

LINKS
The conference links tend to go out of date so I’ll instead list the organizational links. You can look at their events to find these conferences.

www.pdma.org
tie.boston.org