Corporations have learned that Innovation Challenges and Hackathons can introduce new ideas and bring fresh approaches to addressing customer needs. Bringing together participants from across disciplines and outside the firm can identify promising solutions, build prototypes, and present a compelling pitch in a short timeframe.
But assembling teams from non-technical disciplines, while bringing a fresh perspective and understanding of customer needs, also limits the ability to build and test a Minimum Viable Product or working prototype that includes key functionality of a proposed solution. This means that detailed design, build and testing often takes place long after the innovation event, or that concepts are dropped because their viability could not be assessed efficiently.
Improving the success rate of Innovation Challenges and Hackathons requires addressing key challenges:
- What building blocks can be incorporated into a firm’s Innovation Sandbox?
- How can development and testing tools improve the practicality of prototypes without slowing down the build-test-learn cycles?
- How can tools be provided for short-duration events, while requiring minimal learning curve?
To provide ready-to-use tooling for hackathons, many corporations build an Innovation Sandbox, comprising software for collaboration and wireframing, cloud-based servers and databases, APIs to key corporate systems, and other tools specific to the challenge.
“Innovation: How to Build Your Firm’s Capability” describes a sandbox as a key enabler for fostering an innovation culture within a firm, as well as engaging the firm’s innovation ecosystem.
The Innovation Sandbox
Management thinker CK Prahalad coined the term Innovation Sandbox in 2006 when he described how healthcare organisations in India were able to deliver a high standard of medical treatment at a fraction of the cost of equivalent care in Western countries.
In Prahalad’s words:
The sand evokes a sense of safety (the sand prevents injury from unexpected failures), while the sides of the sandbox represent constraints. Prahalad’s example concerned breakthrough innovations to impact the quality of life of people throughout the developing world, and for these he stipulated that innovations must:
- Result in a product or service of world-class quality,
- Achieve a significant price reduction,
- Be scalable: be able to be produced, marketed and used in many circumstances, and
- Be affordable at the bottom of the economic pyramid (those with the lowest incomes in a given society).
This concept, however, has found wide application across a number of industries and settings. The more general premise relies on:
- Rethinking the entire business model — technology choices, distribution, pricing, scale, workflow, and organisation.
- Researching markets vs immersion in the lives of target consumers.
- Accepting constraints.
- Not innovating in isolation.
- Committing to a strategic intent.
This leads to my own definition of an innovation sandbox:
“A safe environment for experimentation, to enable people to try out new products, services, business models or individual features – to gauge customer/user demand and technical viability.” It can be made available to internal and/or external users, and is particularly powerful for co-creating with partners.
The Innovation Process
Frameworks for innovation include Design Thinking, Agile and Lean Startup. At their core is the concept of starting small, running experiments to learn, putting a prototype or Minimum Viable Product (MVP) in front of customers as soon as possible, and progressively elaborating a solution through build-test-learn cycles. This can be extended with Growth Hacking to scale both the product offering and the customer base.
What Happens in an Innovation Challenge or Hackathon
Companies can encourage innovation through in-person hackathons, online innovation challenges held over a period of weeks or months, or standing invitations for innovative ideas.
In his article “How to Run a Successful Corporate Hackathon”, George Krasadakis defines a hackathon as:
The focus may be known problems or opportunities (stated upfront) or be open to any ideas with no particular constraints.
In a time-boxed scenario, participants are asked to:
- Come up with great ideas
- Formulate a prototype and prioritise wisely
- Self-organise and execute — do quick research, prepare resources, write code, reuse existing components and systems and finally prepare a presentation
Research and analysis can include defining user personas, mapping the customer journey, identifying pain points and writing user stories. It is important to balance the time spent on these activities with building prototypes that can be tested with users or customers.
Prototypes can range in complexity from a paper-based mockup or even an advertisement or video describing it, to a working model that enables the user to operate it as if it were the final product.
Simple prototypes can gain valuable feedback to either continue to build out functionality, or to abandon an unwanted product before too much time and effort has been spent on it.
The more functionality that is built into a prototype, the more detailed feedback can be expected. This needs to be balanced against the risk of building something that customers do not want.
A useful guide to selecting appropriate prototyping methods is Steve Glaveski’s “Twelve types of prototypes to test your idea”.
What is in the Innovation Sandbox
Whatever the format of the innovation initiative, the activity will produce more complete solutions if the firm provides appropriate tools for participants to use. Tools can include those for ideation, documentation and collaboration, wireframing, user feedback, prototype development, external services, internal systems and data.
Ideation and Interaction
The simplicity of post-it notes, whiteboards and flip charts enable teams to brainstorm and interact without being slowed down by the constraints of a system. Once initial ideas and concepts have been developed, they can be documented and shared through software tools.
Documentation, Collaboration and Presentation
Software tools designed for collaboration also aid in collecting and documenting information. Presentation tools enable the team to communicate their proposed solutions both within the team and to stakeholders.
Designs and mockups can be created using story boards or software. Design and wireframing software allows the team to create realistic looking prototypes without coding. Advanced features such as conditional flow can enable users to navigate through a prototype web site or mobile app.
Feedback can be gained through customer surveys, tracking of activity using such tools as Google Analytics, and testing services.
The appropriate development tools will depend on the nature of the innovation challenge, as well as the skills of the participants. If participants are highly skilled, but from diverse backgrounds, it can be useful to enable them to use their tools of choice. If the participants do not have extensive development skills, however, a small range of simple tools is more appropriate. Cloud-based system provide the flexibility of being able to provision a wide variety of computing capacity.
Application Programming Interfaces (APIs)
APIs ease the integration of functionality and data without the team needing to understand its internal structure. They have become the accepted mode of connecting to both external and internal systems and data. My article “APIs Are Essential For Digital Financial Services” outlines the case for financial institutions to publish Open APIs to enable partnerships and new business models to extend beyond their current reach.
Accessed through APIs, external services range from generally available information services such as mapping and weather data, through to specialised services provided by vendors or partners.
Innovation activities become much more powerful when they can leverage the capabilities and data the company already has. Many firms have already established an API platform. Building a firm’s ability to leverage both external and internal capabilities through APIs is described in my previous article: “Open API Roadmap – From Strategy to Execution”.
Suitably anonymised, synthesised or aggregated data representing customers, transactions, company structure, locations, etc.
Maximising the Value of the Asset
To maximise the value of the Innovation Sandbox, firms should provide:
- Self-service tools for participants to register, create projects, explore projects, form teams, explore technologies etc.
- Introductions to the firm’s business, and the problems it seeks to solve for its customers
- Tutorials on the technical tools available in the sandbox
- Guides on Design Thinking, Agile, Lean and Growth Hacking frameworks, and tips on how to pitch a proposal to the firm
- A small team to support the process, and access to a wider network of business and technology subject matter experts who can provide guidance and mentorship
No toolkit can make change happen on its own. But making a sandbox available for staff, business and technology partners, and innovators to experiment reduces the friction preventing innovation. It makes the firm open to both planned and “happy accident” innovation, and invites potential partners to engage in co-creating new products, services and business models.