Creative and Innovative Management

In Partial Fulfillment of the Requirements for Doctorate in Business

Administration
Philippine School of Business Administration
– Graduate School of Business

Submitted by: Jere Jean G. Valencerina, MBA

Contents
What is Creative and Innovative Management?.....................................................................................2

What are the principles behind Creative and Innovative Management?..............................................2

A. Realization of value........................................................................................................................2

B. Future-focused leaders...................................................................................................................2

C. Strategic direction...........................................................................................................................2

D. Culture............................................................................................................................................2

E. Exploiting insights..........................................................................................................................2

F. Managing uncertainty....................................................................................................................2

G. Adaptability.....................................................................................................................................3

H. Systems approach............................................................................................................................3

Phases of Creative and Innovative Management....................................................................................5

Innovation Labs......................................................................................................................................5

Open Innovation.....................................................................................................................................5

Lean Innovation.....................................................................................................................................5

Corporate Incubators and Accelerators.................................................................................................5

Blue Ocean Strategy...............................................................................................................................6

Cross functional teams...........................................................................................................................6

Digital Transformation...........................................................................................................................6

What is Disruptive Innovation.................................................................................................................7

What is Agile Innovation?........................................................................................................................7

Scrum......................................................................................................................................................7

Innovation Competitions and Challenges..............................................................................................8

Continuous Improvement.......................................................................................................................8

Disruptive Innovation and Agile Innovation...........................................................................................9

How does Disruptive Innovation work?.................................................................................................10

Stages of Disruptive Innovation..............................................................................................................11

 Identify Market Gap......................................................................................................................11

  Introduce a new product or technology........................................................................................11

 Gain Traction................................................................................................................................11

 Disrupt the Existing Markets........................................................................................................11

 Create New Markets......................................................................................................................11

Ideation: Generating Ideas for New Businesses..................................................................................11

Incubation: Validating the New Idea...................................................................................................12

Hypothesis Testing................................................................................................................................13

Feedforward measurement...................................................................................................................13

Executive Oversight..............................................................................................................................13

AGILE Innovation...................................................................................................................................15

How Agile operates..................................................................................................................................15

The main values of Agile methodologies are:........................................................................................16

Benefits of Agile Methodology................................................................................................................16

 Better Control...............................................................................................................................16

 Increased Flexibility.....................................................................................................................16

 Continuous Improvement.............................................................................................................17

 Better Project Predictability..........................................................................................................17

 Reduced Risks...............................................................................................................................17

 Product Quality.............................................................................................................................17

 Customer Satisfaction...................................................................................................................17

Phases of Agile Innovation......................................................................................................................17

Concept/Ideation...................................................................................................................................17

Inception or Requirement Identification..............................................................................................17

Iteration or Development......................................................................................................................18

Release/Deployment..............................................................................................................................18

Production/Maintenance......................................................................................................................18

Retirement.............................................................................................................................................18
What is Creative and Innovative Management?
Creative and Innovative Management is the act of balancing creativity and innovation in the
workplace. It is the art of finding and solving problems in different ways. It can be through ways
of addressing challenges in the workplace, dealing with different behaviours, or simply
improving products and services.
Creativity means to transcend traditional ideas, rules, patterns or relationships into meaningful
new ideas or new solutions to a problem while Innovation is the practical implementation of
ideas, approaches or actions that result in the introduction of new goods and services or
improvement in offering goods and services, increasing efficiency and creating value.
Creativity and Innovation have always been at the heart of every successful organization. In
recent years the role of the Creativity Manager has developed. And as we start to see creative
workers replace knowledge workers, knowing how to creatively manage teams and inspire
diversity, have become essential elements in the role of today’s team leaders.

What are the principles behind Creative and Innovative Management?

The principles behind Creative and Innovative Management are to produce and create new
concepts and ideas which are then transformed into some forms of expression such as piece of
art, musical score, or literary pieces.
Understanding the principles of Creative and Innovative Management leads to produce either
products, processes, or strategies that will improve the results of actions or performance of the
team or the business, or the overall way of life.

A. Realization of value - Value, financial or non-financial, is realized from the deployment,

adoption and impact of new or changed solutions for interested parties.
B. Future-focused leaders - Leaders at all levels, driven by curiosity and courage, challenge
the status quo by building an inspiring vision and purpose and by continuously engaging
people to achieve those aims.
C. Strategic direction - The direction for innovation activities is based on aligned and shared
objectives and a relevant ambition level, supported by the necessary people and other
resources.
D. Culture - Shared values, beliefs and behaviours, supporting openness to change, risk
taking and collaboration enable the coexistence of creativity and effective execution.
E. Exploiting insights - A diverse range of internal and external sources are used to
systematically build insightful knowledge, to exploit stated and unstated needs.
F. Managing uncertainty - Uncertainties and risks are evaluated, leveraged and then
managed, by learning from systematic experimentation and iterative processes, within a
portfolio of opportunities.
G. Adaptability - Changes in the context of the organization are addressed by timely
adaptation of structures, processes, competences and value realization models to
maximize innovation capabilities.
 H. Systems approach - Innovation management is based on a systems approach with
interrelated and interacting elements and regular performance evaluation and
improvements of the system.

How do we encourage creativity in the modern-day organization? And what are the foundations
that propel us to great innovation? There are lots of ways we can innovate in the workplace, and
make our workplaces more stimulating for creativity to flow. We just have to give our teams the
freedom and confidence to explore ways of doing what they do better.
Cite an example of an article or a case which shows a practice of creative and innovative
management.
Google:
Google was the first company to create a business based on innovation. Google founders Larry
Page and Sergey Brin addressed in their 2004 IPO letter that they support their employees to
contribute 20% of their time to work on the innovation that will benefit organization.
Employees having an idea not related to their work will focus 5-10% of their time on their
innovation until they demonstrate the impact of the idea. This helped Google to generate some of
the most successful applications and tools including Gmail, GoogleTalk and AdSense.
Harnessing employee intellect at Toyota
It took Detroit more than 20 years to ferret out the radical management principle at the heart of
Toyota’s capacity for relentless improvement. Unlike other car manufacturers in Western
countries, Toyota has long believed that first-line employees can be more than cogs in a soulless
manufacturing machine; they can be problem solvers, innovators, and change agents. While
American companies relied on staff experts to come up with process improvements, Toyota gave
every employee the skills, the tools, and the permission to solve problems as they arose and to
head off new problems before they occurred. The result: Year after year, Toyota has been able to
get more out of its people than its competitors have been able to get out of theirs.
General Electric:
In the early 1900s, GE developed the renowned industrial research laboratory. Innovation bought
GE to the uncontrolled process of scientific discovery. GE won more patents than any other
company in America over the next 50 years.
Much of GE competitive prowess was an outcome of innovations in the best way – nurturing a
culture of ideation. They provide a healthy environment where employees share their ideas
openly and get recognised to their efforts in innovation.
They also seek external voices with unique opinions and ideas on everything from the cloud,
robotics and manufacturing to public policy and the global economy.
Visa
The world’s first near-virtual company, owes its success to organizational innovation. When
Visa’s founder banks formed a consortium in the United States in the early 1970s, they laid the
groundwork for one of the world’s most ubiquitous brands.
Today, Visa is a global financial web that links more than 551 million cards circulation and more
than 2.9 billion cardholders.
Visa branded credit and debit cards are issued by a total of 1038 banks and financial institutions
across the world.

References:

Babu, S. (2018, November 24). Innovation Management: Importance, Ideas, And Examples.
https://acuvate.com/blog/innovation-management-importance-ideas-examples/

Hamel, G. (2006, February). The Why, What, and How of Management Innovation. Harvard
Business Review. https://hbr.org/2006/02/the-why-what-and-how-of-management-
innovation

Unknown. (n.d.). Creativity and innovation management: How to inspire original ideas.
https://online.stanford.edu/creativity-and-innovation-management#:~:text=What%20is
%20creativity%20and%20innovation,especially%20in%20a%20work%20environment.

Magnus.p.karlsson. (2020, July 5). Innovation management principles. Innovation Management

System. https://innovationmanagementsystem.com/innovation-management-principles/
Phases of Creative and Innovative Management

There are 10 key phases involved in Creative and Innovative Management which aid to
effectively generate, develop and implement new ideas and solutions within an organisation.
Examples of Creative and Innovative Management Phases
Innovation Labs:
A bank may use its innovation lab to create a smartphone app that makes it easier for consumers
to manage their money. A telecom company might use its lab to create and test out different
types of customer service technology.
Open Innovation
Samsung also acquires startups whose innovations align with the company's focus areas. The IoT
company SmartThings is a product of Samsung's open innovation culture. Samsung acquired
SmartThings in 2014 after the latter attracted attention from venture capitalists and raised as
much as $12.5 in one funding round.

Design Thinking
Airbnb: Airbnb used design thinking to create a platform for people to rent out their homes to
travelers. The company focused on the needs of both hosts and guests. The result was a user-
friendly platform to help people find and book accommodations.
Lean Innovation
Dropbox. Dropbox is one of the best known examples of a business that has grown using lean
startup principles. The file transfer service now has over 500 million users worldwide but it
started life as a minimal viable product in the form of a 3 minute screeencast showing consumers
what Dropbox could do.
Corporate Incubators and Accelerators
Corporate incubators use existing assets to increase profits. Corporate incubators encourage the
exploration of new opportunities and help companies leverage their expertise and know-how.
Example: Whirlpool's W-Labs was built to identify unique consumer pain points and turn them
into new products and services.
Incubators provide space and resources for the full spectrum of startups, from early stage to
growth stage. Accelerators are ideal for businesses in the startup stage with a minimum viable
product (MVP). Additionally, many accelerators have competitive application processes.
Services provided by incubators include office space, administrative functions, education and
mentorship, access to investors and capital, and idea generation. Incubators either charge a fee
for their services or take an equity stake in the startup.
Blue Ocean Strategy
Ford and Apple are two examples of leading companies that created their blue oceans by
pursuing high product differentiation at a relatively low cost, which also raised the barriers for
competition. They also were paradigmatic of burgeoning industries at the time that were later
exemplified and emulated by others.
Ford’s Model T, introduced in 1908, is a classic example of a market-creating blue ocean
strategic move that challenged the conventions of the automotive industry in the United States. It
made the automobile accessible to the mass of the market.

Until that time, America’s five hundred automakers built custom-made novelty automobiles.
Despite the number of automakers, the industry was small and unattractive with cars unreliable
and expensive, costing around $1,500, twice the average annual family income. But Ford
changed all of that with the Model T.

He called it the car ‘for the great multitude, constructed of the best materials.’ Although it only
came in one color (black) and one model, the Model T was reliable, durable, and easy to fix. And
it was priced so that the majority of Americans could afford one. In 1908 the first Model T cost
$850, half the price of existing automobiles. In 1909 it dropped to $609, by 1924 it was down to
$240. A 1909 sales brochure proclaimed, ‘Watch the Ford Go By, High Priced Quality in a Low
Priced Car.’

Cross functional teams

A few examples of cross-functional teams include product development teams, event planning
teams, and project management teams. These teams typically include members from different
departments who all have different types of expertise that they can bring to the table in order to
achieve a common goal.
Cross functional teams are groups consisting of people from different functional areas of the
company – for example, marketing, product, sales, and customer success.

Digital Transformation
A lot of companies are slowly transitioning to AI as part of their digital transformation.
This allows and AI chat bot to respond to basic FAQs and for humans to focus on more
important tasks.
What is Disruptive Innovation
Disruptive innovation refers to the innovation that transforms expensive or highly sophisticated
products or services—previously accessible to a high-end or more-skilled segment of consumers
—to those that are more affordable and accessible to a broader population.
Facebook is a prime example of disruptive innovation which has revolutionized global
communication.
Facebook initially aimed to simplify online connections among college students. However, its
impact exceeded expectations, transcending the boundaries of the Harvard campus.
Today, Facebook stands as the world’s most popular social media platform, boasting over 1
billion active users.
With its diverse range of social media platforms, Facebook has fundamentally changed the way
people interact and connect worldwide, leaving a lasting impact on the digital landscape.

What is Agile Innovation?

Agile Innovation is a methodology that carries across all departments in a company committed to
growth through innovation. It relies on high frequency, iterative improvement, encouraging
flexibility and quick responses to validated feedback.

What are examples of agile in business?

The famous LEGO toy company started its agile approach starting with teams. 20 product teams
were working across the organization at the start of the Agile implementation and it turned to 5
of them into self-organizing Scrum teams. Gradually the other teams were being progressively
transformed as Scrum took effect.
An Agile, the project is broken up into numerous iterations, all of which would be of the same
duration (between 2 to 8 weeks). The team delivers a working application at the end of each
iteration. For this example, let's assume that the project is split into eight releases of 4 weeks
each
One of the most common examples of scrum is in software development, where teams can
rapidly develop and deliver new software features. Using scrum, the team can break down the
project into small, manageable tasks, prioritize them, and develop them over sprints. Marketing
teams can also use Scrum.
Scrum is a management framework that teams use to self-organize and work towards a common
goal. It describes a set of meetings, tools, and roles for efficient project delivery. Much like a
sports team practicing for a big match, Scrum practices allow teams to self-manage, learn from
experience, and adapt to change.
Work toward clearly defined short-term goals. Breaking big goals into short-term goals that are
time-boxed will help create a sense of accomplishment and move you forward. Sprint—stay
focused on your goal. Block out times of the day when you can work free from distraction until
you reach your goal.
Innovation Competitions and Challenges:
Examples. In September 2009, Netflix awarded 1 million US dollars to the winner of Netflix
prize—the team who by 10% improved the accuracy of predictions about the extent that people
enjoy a movie based on their past movie preferences.
Continuous Improvement
Employee training, skills development, cross-training programs, educational benefits, and
courses can all be seen as examples of continuous improvement.
There are many ways to implement continuous improvement in your organization, but the
most common method involves the following six steps:
1. Assess your current state. ...
2. Identify the root cause of problems. ...
3. Develop a solution. ...
4. Implement the solution. ...
5. Evaluate the results. ...
6. Standardize the process.

References:
Dieffenbacher, S. F. (2023, July 10). 18 Disruptive Innovation Examples 2023. Digital
Leadership. https://digitalleadership.com/blog/disruptive-innovation-examples/
Unknown. (n.d.). Creativity and innovation management: How to inspire original ideas.
Standford Online. https://online.stanford.edu/creativity-and-innovation-management
Twin, A. (2023, June 28). Disruptive Innovation: Meaning and Examples. Investopedia.
https://www.investopedia.com/terms/d/disruptive-innovation.asp
Unknown, U. (n.d.-b). Managing: Creativity and Innovation. University Of Cambridge.
https://www.ppd.admin.cam.ac.uk/leadership-development/leadership-attributes-framework/
managing-creativity-and-innovation
Tang, M., & Werner, C. H. (2017, May). Essentials of the Management of Creativity
and Innovation in Education, Business, and Engineering. ResearchGate.
https://www.researchgate.net/publication/316644491_Handbook_of_the_management_of_creati
vity_and_innovation_Theory_and_practice
Disruptive Innovation and Agile Innovation
Disruptive innovation refers to the innovation that transforms expensive or highly sophisticated
products or services previously accessible to a high-end or more-skilled segment of consumers to
those that are more affordable and accessible to a broader population.
Disruptive Innovation simplifies or makes more affordable products to undesired or ignored
markets.
Wheels, lightbulbs and cellphones are examples of disruptive innovation. These innovations
caused profound break with previous patterns, bringing about major changes in people’s lives.
Facebook is a prime example of disruptive innovation which has revolutionized global
communication.
Facebook initially aimed to simplify online connections among college students. However, its
impact exceeded expectations, transcending the boundaries of the Harvard campus.
Today, Facebook stands as the world’s most popular social media platform, boasting over 1
billion active users.
With its diverse range of social media platforms, Facebook has fundamentally changed the way
people interact and connect worldwide, leaving a lasting impact on the digital landscape.

Evolution of Disruptive Innovation

How does Disruptive Innovation work?
As companies tend to innovate faster than their customers’ needs evolve, most companies end up
creating products or services that are too sophisticated, too expensive, and too complicated for
many customers in the market.
They usually sustain innovations at the higher tiers of their markets by charging the highest
prices to the most demanding and sophisticated customers at the top of the market to achieve
greatest profitability.
This unwittingly opens the door to “disruptive innovations”.
An innovation that is disruptive allows a whole new population of consumers at the bottom of a
market access to a product or service that was historically only accessible to consumers with a lot
of money or a lot of skills.
“Disruptive Innovations are NOT breakthrough technologies that make good products better;
rather they are innovations that make products and services more accessible and affordable,
thereby making them available to a larger population”.
Stages of Disruptive Innovation

This step-by-step explanation highlights the key stages of disruptive innovation and
emphasizes the factors that contribute to its success.

 Identify Market Gap – disruptive innovations arise when entrepreneurs recognize the
needs within a specific market which are not met. The growing demand for sustainable
transportation options led to the emergence of electric vehicles as a response to this gap.
 Introduce a new product or technology – in this phase, a novel product or technology is
introduced to address the identified market gap. These may initially be less refined or
functional compared to the existing product
 Gain Traction - When a new product or technology gains traction, it starts to disrupt the
existing market and value network. Customers’ preferences transition from traditional
products to the innovative offerings, driving their increased popularity and adoption.
 Disrupt the Existing Markets - With more customers embracing the new product or
technology, the established market experiences the impact of this disruption. Incumbent
players may face difficulties in competing and may need to adapt to avoid risking losing
market share.
 Create New Markets - Over time, the new product or technology becomes the new
standard, completely transforming the existing market. This process leads to the creation
of a fresh market and value network, with the innovative product or technology at its
core.

Stages of Disruptive Innovation

Ideation: Generating Ideas for New Businesses

This is the first stage of sucessful ambidexterity. In most companies, it is the

responsibility of the Research and Development team to develop new or improved
products or services with efforts focused on developing new features and functionalities.

In this stage, the following approaches are adopted:

Open Innovation - Involves the use of both internal and external flows of knowledge to
accelerate internal innovation in order to extend the market for the external usage of
innovation.
 Corporate Venture Capital – companies develop relationships with startup ecosystems
through corporate venture capital units with the objective of gaining insight into the
innovation efforts of startups. Firms may invest in startups to provide a window on new
technologies, to explore new business models, or to enter new markets.

Design Thinking - Design thinking is a non-linear, iterative process that teams use to
understand users, challenge assumptions, redefine problems, and create innovative
solutions to prototype and test

Employee Involvement – Employees are now more involved in suggesting new ideas for
new products or services which may help in coming up with new innovations.

Incubation: Validating the New Idea

Companies do not run out of new ideas with regard to innovation. However, not all ideas
may be worth investing on. We separate the good ideas from the ones that are not through
validation or incubation. This process will determine whether the idea meets a market
test.

Three useful methodologies address this challenge:

The lean startup - originally proposed by Steve Blank and further developed by his
student Eric Ries, begins with an entrepreneur’s hypothesis about a new product or
service. The idea is to work backward from the business results you are trying to achieve
rather than forward from some solution or technology you want to sell. The intent is to
eliminate wasteful or unnecessary practices, focus on quickly designing and running an
experiment to test the original hypothesis, and iterating based on the results of the
experiment.

The business model canvas - developed by Alexander Osterwalder, this approach

provides a set of 9 building blocks that can be used in establishing a new venture. It helps
users to systematically think through their business model and identify those elements
needed to test the original hypothesis.

The Stanford Launch Pad - This is a Stanford Design School class for entrepreneurs
that has generated more than 100 new companies over the past several years, 60% of
which are still operating. The class begins with an idea for a product or service and
addresses three questions: Who is the hyper-specific target user? What is their specific
pain point? and What single function have you performed to reduce this pain? Over the
course of ten weeks, participants are required to talk to a minimum of 100 potential
 customers. Combining elements of design thinking, the lean startup, and the business
canvas, the emphasis is on listening to the customer, rapid prototyping, and fast iteration.

Hypothesis Testing - the idea of an iterative loop between an assumption about the market
opportunity, actual experience with customers that confirms or refutes that assumption, and
adaptations to the model based on learning is central to incubation. This approach places a high
value on learning through many small failures and the idea is not to build an entire solution but
to formulate a series of small tests of limited hypotheses.

Feedforward measurement – most organizations review data on past performance and compare
it with expectations, then act accordingly to correct errors. This measurement system is another
key area in which incubation challenges the typical practices of core a operating business.
Feedback loop is done to revisit what the goal was, what the actual performance is, and how the
variance can be eliminated. A feedforward system is required to track the performance toward a
specific goal to show whether the experiment done is performing relative to its hypotheses.

Executive Oversight – Senior Management need to be involved in the decision making on

experiments in the incubation process. The biggest challenge to moving from incubation to
scaling a new venture is a profitable business unit that opposes diverting current investments
with certain short-term rewards to the less predictable opportunity of creating a new disruptive
venture. Therefore, when it’s time to commit, there should be clarity and shared understanding
about the ambition of the new venture. Since it is a rational choice to argue for certain gains over
future possibilities, the senior executives must commit time and attention in reviewing the
experiment as it unfolds. It may be difficult to get this kind of involvement but it is necessary in
order to move forward with the experiment.

 Scaling: Growing the New Venture

This stage is where we reallocate the assets and capabilities needed to grow the new
business.

While the issue of scaling or growing a successful new venture is difficult, it is less
problematic in entrepreneurial firms because growth is largely a function of attracting
new capital and recruiting new people. It is also less of an issue for incremental
innovations such as introducing new products or services as the idea can be integrated
into existing structures and processes. However for large firms, scaling a new disruptive
business or business model that moves from a successful experiment to a fully
operational business is a moment of both commercial and organizational vulnerability.
 This is the point where investment steps up a level. A well-designed and executed
incubation can improve the odds of success, but it cannot eliminate risk. Cutomers may
not necessarily behave and spend money as expected when planning the innovation.

The following options are considered to meet the needs of the new venture:

Acquire – one of the means to accelerate scaling is Merger and Acquisition. An excellent
fit would be firms that have access to customers, capacity, and capability that can be
acquired.

Build – another option is to invest and build a capacity internally.

Partner – finding partners with the resources needed by the venture to scale is also one of
the possible options.

Leverage – the greatest advantage of an incumbent has over a startup is that they start
with valuable assets and capabilities that most startup business lacks. Incumbents have
customers, capacity and capabilities and some of these can be repurposed to meet the
needs of the new venture.

Leverage is a successful, if underused, model for scaling new ventures. What is essential
is the role of leadership in providing a supportive and enabling context. Three elements
appear critical: active sponsorship from senior leadership, separate explore and exploit
units, and ambidextrous leadership that can balance the competing demands of explore
and exploit.

References:

Christensen, C. (n.d.). Disruptive Innovation. Clayton Christensen.

https://claytonchristensen.com/key-concepts/#:~:text=Disruptive%20innovation%2C%20a
%20term%20of,market%2C%20eventually%20displacing%20established%20competitors.
Dieffenbacher, S. F. (2023, July 10). Digital Leadership.
https://digitalleadership.com/blog/disruptive-innovation
examples/#How_does_Disruptive_Innovation_Work
Christensen, C. M., Raynor, M. E., & McDonald, R. (2015, December). What Is Disruptive
Innovation?. Harvard Business Review. https://hbr.org/2015/12/what-is-disruptive-innovation
Charles O’Reilly and Michael Tushman, “Organizational Ambidexterity: Past, Present and
Future,” Academy of Management Perspectives, 27/4 (November 2013): 324-338;
Cristina Gibson and Julian Birkinshaw, “The Antecedents, Consequences, and Mediating Role of
Organizational Ambidexterity,” Academy of Management Journal, 47/2 (April 2004): 209-226.
Charles O’Reilly, & Binns, A. J. M. (2019). The Three Stages of Disruptive Innovation.
Berkeley Haas. https://cmr.berkeley.edu/assets/documents/sample-articles/61-3-oreilly.pdf

AGILE Innovation
Agile Innovation is a methodology that includes an iterative and progressive method of
managing design and creating activities for Engineering, IT, and other businesses. It aims to
create new products or services in a flexible and collaborative way.
In its simplest form, agile is being able to do things quickly and easily. Agile innovation is about
speed, efficiency, flexibility, focus, collaboration, and reducing risks.

How Agile operates

The fundamentals of Agile are simple. To tackle an opportunity, the organization forms and
empowers a small, focused, cross-functional, self-managing team.

The team’s initiative owner, who typically comes from a business function and divides his or her
time between the Agile team and key stakeholders, uses techniques such as design thinking to
build a catalog of promising ideas or features. The initiative owner continuously (and ruthlessly)
ranks that list based on the latest estimates of value to customers, financial results and other
innovation initiatives.

A process facilitator protects the team from distractions and puts its collective intelligence to
work. The team then breaks top-priority tasks into small modules, decides how much work to
take on and how to get it done, and starts building working versions in short cycles known as
sprints.

The process is transparent to everyone. Team members hold brief daily stand-up meetings to
review progress and identify impediments. They resolve disagreements with experimental
feedback loops rather than through endless debates or appeals to authority. They test small
working increments with groups of potential customers. If customers get excited, the increment
may be released immediately, even if the boss isn’t a fan or others think it needs more bells and
whistles. The team then brainstorms ways to improve future cycles and prepares to attack the
new top priority.

This approach systematically targets common impediments to software projects and other forms
of innovation. It frees senior managers from micromanaging, enabling them to spend more time
strategizing, removing impediments and increasing cross-functional collaboration. It increases
customer engagement and satisfaction by improving visibility and adapting to the customer’s
changing priorities. It brings the most valuable products and features to market faster. It
minimizes the waste inherent in meetings, repetitive planning, formal documentation, quality
defects and low-value product features. The process also aims to create team members who are
happier, more creative, more committed to success and better trained for advancement, thus
reducing employee turnover.
Because Agile relies on empirical feedback loops and full transparency, performance metrics are
integral to the process. Practitioners regularly monitor changes in metrics such as customer
satisfaction, quality, speed and employee engagement, and they have shared data on tens of
thousands of projects with third-party researchers.

The main values of Agile methodologies are:

 Interactions and individuals above tools and processes

 Customer collaborations above negotiation of contract
 Working software above comprehensive documentation
 Responding to changes above following a plan
The word agile in today’s world can refer to different values and frameworks including Kanban,
Scrum, Adaptive Project Framework (APF), and Extreme Programming (XP).

Adaptive Project Extreme Project

Kanban Scrum
Framework (APF) Management (XPM)
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approach where manage projects where management methodology, the plan,
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representations teams and clears teams work in stages deliverables can be
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of tasks are created by cycles) and the team has been done on the
team members. Tasks meets regularly to project.
move from discuss task progress
predetermined phases and identify obstacles.
to track progress and
detect barriers.

Benefits of Agile Methodology

Better Control - Agile offers managers better control of the project through transparency,
quality-control and feedback integrations. Uses advanced reporting tools and techniques
to create daily progress reports throughout the project implementation
Increased Flexibility - Implementing agile in the project development team gives them
flexibility. In agile development methodology, the team works in sprints that are not only
easily attainable but also flexible enough to allow developers to make changes even on
short notice.
 Continuous Improvement - Striving for continuous improvement is one of the core
principles of Agile. Each sprint will be more promising than the previous one and will
contain no iterative mistakes. It encourages an open culture for collaboration and idea
exchange allowing team members to learn and improve from each other’s experiences.

Better Project Predictability - Since agile teams work in sprints, the fixed durations make
it easier for the manager to analyze the performance of the team and accordingly assign
resources. It becomes easier to estimate cost as the prediction is done for short periods
rather than long-term.
Reduced Risks - All the progress made during a sprint is assessed by developers regularly
to have improved the visibility of the project which helps in identifying errors and
obstacles easily. This allows to tackle all the issues immediately, building an effective and
powerful risk mitigation process.
Product Quality - The agile methodology works in an iterative manner for project
management that improves the process upon every interval repetition. The consistent
focus on quality control and improvement leads to the development of high-quality
products.
Customer Satisfaction - Stakeholders are involved in the product/project development
life cylcle hence, the feedback they give can help in assessing the final product based on
their needs. These custom-made deliverables are more likely to improve customer
satisfaction and retention.

Phases of Agile Innovation

Concept/Ideation

o Define the purpose and goal of the new project.

o Determine and document business and user requirements.
o Document the timeline required to complete the job.
o Prioritize tasks and resource allocation.
Inception or Requirement Identification

o Create a project development team.

o The Project owner will verify the availability of the co-developers and choose the best
people for the project’s success.
o The project owner will also the team with the required resources and tools.
Iteration or Development

o Association of the team with clients

o Prioritize and implement iterations and functionalities.
o Examine closely and develop each sprint/iteration.
o Deliver regular project updates or product testing results.
o Ensure product quality by testing at regular intervals or monitor project stage completion
in line with project schedule.
This one is the longest of all as it carries all the bulk work. Product or process undergoes
several reviews and revisions for improvement until finalized.

Release/Deployment

o Quality Assurance team to run some tests that assure the product/project meets what it is
intended for.
o Any issues/challenges must be addressed by the development team immediately.
o Support regular releases/deployment and improvement through user feedback.
o Train product users or project end-users on how this new release works.
o Once everything is completed, product/project will be released to production.
Production/Maintenance

o Product is deployed/Project is completely launched.

o Provide ongoing support for product/project release.
o Collect feedback from users/customers.
o Take note of potential new iterations that can happen to make the product/project more
convenient and useful for users/customers.
Retirement - The retirement of a product/process can be triggered by either new product or
project being introduced, or by a system having become outdated or inconsistent with the
organization after some time. Agile includes multiple iterations to refine deliverables and
achieve great results.
An agile approach is no longer confined to the world of the software company. Broadly
speaking, agile can be useful for innovation in the following ways:
  Room for Failure – the Agile methodology encourages exploration rather than shying
away from making mistakes. It allows the team to learn from failures which will lead to
new discoveries and solutions.
 Continuous Improvement – Agile implementations should fit the needs of the business
instead of using processes or practices that do not make sense for the way the business
operates.
 Breaking down “Silos” - in traditional business models, innovation processes are
typically slowed due to the fact that members rarely work across departments. Breaking
down barriers opens up the field to ideas from all levels and departments, both inside and
outside of an organization.
 Working with feedback – a crucial part of Agile methodology is implementing
stakeholder feedback throughout the process. This allows the team to understand their
goals and make requested changes quickly and with minimal impact to the project.
 More empowered employees – there is a space for all ideas and a system in place to
implement them in an Agile organization. Having ownership over their work, self-
organizing teams are given a sense of autonomy thus, are encouraged to share more
original ideas and innovative processes to make them happen.

When agile methodologies are implemented correctly, these can positively affect profitability
and competitiveness of a company.
Below are the cultural elements that should be introduced to the team in order to successfully
implement an Agile Innovation:

 Help employees understand agility – Agility offers a reliable approach to solving

complex problems. It does not mean that there is no more oversight, it is just going to be
easier to resolve.
 Choose the right application areas – Not all departments or areas will benefit from agile
methods. Therefore, start with product development, marketing, and strategic planning, to
begin developing projects and solutions step-by-step in coordination with clients and
partners.
 Start with pilot projects – Agile pilot projects often empower employees who previously
worked with limited independence and decision-making freedom. These satisfied
employees then act as ambassadors of the agile innovation culture and use word-of-
mouth to help to bring others around to the agile methodology.
 Allow employees to adapt – Methods like Scrum may be hard for seasoned employees to
adapt to. Therefore, allow team members to adapt agile methods over time and develop
the new principles they learn to their ideas.
  Encourage top management to use agile methods – A corporate culture cannot become
agile if the top leadership have not bought in. By applying agile methods to project
management, strategic development, resource allocation, or coordination within the
company, management can fully explore the benefits of agility and tout those benefits to
their own teams.
 Remove barriers –The use of agile methods may result in tensions between agile teams
and the rest of the workforce. To address pushbacks, managers need to be clear about
priorities, roles, and responsibilities.
References:

Nehra, M. (2023, May 11). 6 Stages of Agile Development Life Cycle. Decipher Zone.
https://www.decipherzone.com/blog-detail/agile-development-lifecycle

Van Der Hoek, J. (2023, September 29). The 5 Stages of the Agile Software Development
Lifecycle. Mendix. https://www.mendix.com/blog/agile-software-development-lifecycle-
stages/

Team, L. C. (n.d.). The Stages of the Agile Software Development Life Cycle. Lucidchart.
https://www.lucidchart.com/blog/agile-software-development-life-cycle

Long , D. (2020, March 26). What is Agile Innovation?. Gensight. https://gensight.com/what-is-

agile-innovation/

Company, M. &. (2023, March 27). What is agile?. McKinsey and Company.
https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-agile

Stefanini Group, S. G. (2021, November 10). 5 Ways Agile Supports Innovation.