Disruption & Adaptation27

Innovation culture is not a fancy hub

Jaroslav Procházka - Innovation culture is not a fancy hub ... [Agile Prague]

Jaroslav ProcháZka

September 11, 2018

OverviewRelatedHighlight

Agile Prague logo

As companies follow their Agile transformation journey, they pass many phases. It can range from guerrilla IT agile endeavour, to unified company strategy and priorities, vendor and ecosystem partnership or learning organization. Some also face the need of being innovative. Many innovation efforts usually start with common anti-patterns urging the employees “to be innovative” and “to show the business case” for their ideas. Many of these efforts end with annoyed people and wasted money. But not every company need to be innovative. Some are successful followers, some are able to deliver services for lower cost.

Those who need or want to be innovative, need to realise that building innovative culture is quite the same as building the agile one. It is not about fancy innovation hubs, urging overloaded employees to bring ideas or labelling existing projects as startups. It is rather the long-term cultural change, management accepting the failures, granted time for people to experiment, formal processes and techniques of gathering, evaluating and piloting ideas, and of course, it is the personal mindset change.

In this talk, we’ll focus on typical innovation scenarios, pattern and anti-patterns and provide potential steps you can take in your context.

About Jaroslav Procházka

Photo of Jaroslav Procházka

Agile Coach and Innovation Mentor

Working 15 years in IT, telco and financial industry in various IT development and leading roles I spent past 11 years as Agile and Innovation coach applying Lean, Agile and innovation thinking and practices. My favourite tools are innovation and Kaizen workshops and (Agile, Lean, ITIL) games, because people find their “aha” moments by themselves.

I guide companies in their internal innovations effort (internal startups), co-founded startup incubator focused on services, as well as a few startups (e.g. QuickJOBS, and brand new SimplyIT.cloud). I like to share experience via blog posts, books and ebooks and time to time also speak at international conferences.

Presentation Slides

Summary Transcript

I want to talk about innovation culture and my experience with innovation. This experience varies across different companies, but I have tried to summarize it into some key phases and anti-patterns that I will discuss today.

About Me

I primarily work as a media and innovation coach, helping not only to start my own companies but also assisting others in launching their businesses and internet startups. What I share here comes from both my personal experience and discussions with others in the field.

Phases of Agile and Innovation Transformation

When implementing an Agile transformation, it's important to understand that it's not just about development or ideas—it’s about corporate and organizational change. It’s a mindset shift. Innovation itself is a subset of this broader cultural transformation.

Because innovation is an organizational change, it must be connected, supported, and driven by the business. Just as HR is evolving, so is Agile. If we compare it to manufacturing, which has been around for thousands of years, software development is still in its early stages—just 50-60 years old. Agile, as we understand it today, is still evolving. What we discuss today as best practices may be very different in the future.

Evolution of Soft Skills and Innovation

Who remembers when soft skills were not even discussed in software development five or ten years ago? Only a few hands go up. This shows how the field evolves, and startups and innovation are just part of this ongoing change. My personal guess is that we are still in a "teenage" phase, far from full maturity in Agile and innovation.

It’s important to note that the phases of transformation do not always happen sequentially—they often run in parallel and are interwoven.

Phases of Agile Transformation

1. Internal Cleaning

Most Agile transformations start internally, typically within IT teams. The key goal at this stage is improving delivery—speed, quality, and engineering practices (such as XP and Scrum). The objective is to create visibility for the rest of the business, moving away from the "black hole" perception of IT.

2. Dismantling the Wall

The next step is bridging the gap between IT and business. This is where real discussions about value begin. Business and IT teams start collaborating, with demo sessions and success being measured in terms of business value rather than just technical output (e.g., story points). Incremental innovations emerge as teams refine processes or add features that directly address business needs.

3. IT as Part of the Business

In this phase, IT and business sit together, understand each other’s constraints, and integrate processes like Dual-Track Agile or discovery-driven development. Instead of building unnecessary features, the focus is on validating needs before development. This can significantly speed up development and reduce wasted effort.

4. Business-Driven by Technology

At the most advanced stage, the business is fully technology-driven. Incremental innovation becomes part of daily work, as seen in industries like finance. Here, Agile procurement and adaptive management take center stage, enabling continuous evolution.

The McKinsey Three Horizons Model

Companies need to think in terms of three horizons:

  • Horizon 1: Current business—this is the cash cow.
  • Horizon 2: Next-generation products—these have been validated but are not yet core business.
  • Horizon 3: Emerging products—these are in the exploration phase, searching for a viable business model.

Innovation Blockers

When starting an innovation journey, the first step is identifying blockers. Common ones include:

  • Confirmation bias: "We already know what the customer wants."
  • Bureaucracy: "Fill in this 15-page form before innovating."
  • No time: "You need to innovate but also do all your usual tasks."
  • Uniformity: Expecting the same mindset across all teams instead of embracing diversity.

Who is Your Customer?

Using Geoffrey Moore's Crossing the Chasm model, companies must understand whether they are early adopters or part of the majority. Highly innovative companies must invest in H2 and H3 initiatives, while more traditional businesses can focus on industrializing existing innovations.

Encouraging Innovation

Here are a few practical approaches:

  • Invite stakeholders and end-users to demos for direct feedback.
  • Use data to drive decisions rather than opinions.
  • Encourage experimentation with small tests—e.g., adding a feature toggle to measure interest before full development.
  • Organize hackathons, innovation days, and structured "FedEx days" to foster creative thinking.
  • Ensure innovation efforts are fully dedicated, rather than squeezed in between regular work.

Anti-Patterns in Innovation

1. The "Explicit No" Culture

Innovation often fails because ideas are dismissed outright. Instead, create an "Explicit Yes" approach, allocating dedicated time for experimentation.

2. Highest-Paid Person’s Opinion (HiPPO) Bias

Decisions should be based on real user data, not just the opinion of the most senior person in the room.

3. Expecting Everyone to be Innovative

Not every role requires radical innovation. Teams responsible for maintaining stability should focus on incremental improvements.

4. Over-Reliance on External Innovation Agencies

While external agencies bring fresh ideas, internal teams must be involved to ensure ownership and continuity.

5. Innovation Without a Business Model

Many great technologies (e.g., Google Glass, early Twitter) struggled due to a lack of a viable business model. Always consider customer needs, product feasibility, and business sustainability.

6. Innovation Creating Internal Divides

Innovation teams should not become isolated. Treat the internal organization as a "second customer," ensuring collaboration between new initiatives and existing business units.

Final Thoughts

Innovation is a long-term journey. Start small, act immediately, and integrate it into daily work. If you’d like to read more, I wrote a book on this topic a few years ago, which provides further details. You can download it at the link below:

Download Materials

Share

Are You Ready to Uncover Your Agility?

The Business Agility Profile™ is a detailed, research-based snapshot of your organization’s Business Agility capabilities & behaviors.

Based on years of research and trusted insight, it delivers data-driven analysis highlighting what’s pushing your organization forward — and what’s pulling you back.

  • Understand where your organization is on its Business Agility journey today

  • See how your organization compares to a benchmark of 1300+ other companies

  • Know the most important next steps to further develop and grow

The component MostRecentArticles has not been created yet.
The component LibraryHighlightsSmall has not been created yet.

You have NaN out of 5 free articles to read

Please subscribe and become a member to access the entire Business Agility Library without restriction.