Empowering Software Development with Creative Thinking and Innovation

Master student: Rune Haugestad. UMB – School of Business & Economics. Master course: Entrepreneurship & Innovation
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Title:
How to empower software development with creative
thinking and innovation?
Master course: Entrepreneurship & Innovation (M-EI)
Subject code: M25FRIE-HH (25ECTS) - 15.06.2013.
Rune Haugestad
Entrepreneurship & Innovation- 2nd
term
UMB – School of Business & Economics
My empirical qualitative survey:
Appendix A: Paper Copy of the Questionnaire. Web Survey with www.Enalyzer.com

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Table of Contents
1. Introduction............................................................................................................................. 4
1.2 Research objectives and purpose.................................................................................................. 5
1.3 Chosen theory and curriculum...................................................................................................... 7
1.3.2 Questionnaire........................................................................................................................... 12
1.3.3 Planning validity ....................................................................................................................... 13
2. (Theory chapter) New paradigms within Software development and innovation ............... 14
2.1 Software development & Innovation – Definitions and context ................................................ 15
2.2. If you do not share ideas, they are wasted!............................................................................... 18
2.3 Innovation Management............................................................................................................. 21
2.3.1 KPIs - You can't manage what you don't measure!.................................................................. 23
2.3.2 Software solutions for smartest possible Innovation Management........................................ 25
2.4 Software Innovation Strategy...................................................................................................... 28
2.4.1 Software Innovation Strategy Design....................................................................................... 28
2.5 Creativity is a process not an accident!....................................................................................... 30
2.5.1 Creative thinking with Six Thinking Hats.................................................................................. 30
2.5.2 Lateral Thinking business case: Motorola................................................................................ 33
2.5.3 Other creativity techniques...................................................................................................... 35
2.6 Software innovation & Leadership.............................................................................................. 36
2.6.1 How to Collaborate to Foster Innovation................................................................................. 36
2.6.2 New generations – A new breed of leaders............................................................................. 39
2.7 Software team............................................................................................................................. 40
2.7.1 Learning capabilities................................................................................................................. 42
2.7.2 Software team practices........................................................................................................... 44
2.8 Project Management................................................................................................................... 45
2.8.2 Agile Delivers a Higher Success Rate........................................................................................ 46

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2.8.3 Do agile methods promote innovation? .................................................................................. 46
2.8.4 Visual control of the project with kanban board ..................................................................... 47
2.9 Commercialization of Software Innovation................................................................................. 56
2.9.1 First-mover or follower strategy? ............................................................................................ 56
2.9.2 Software innovation case example: Angry Birds.................................................................. 57
2.9.3 Software innovation case example: World of Warcraft....................................................... 58
2.9.4 Software innovation case example: Facebook..................................................................... 58
2.9.5 Innovation Adoption Curve .................................................................................................. 61
2.9.6 Creative disruption............................................................................................................... 63
2.9.7 Creating disruptive forces .................................................................................................... 64
3 Analyzing my survey....................................................................................................................... 65
3.1 Limitations of the research...................................................................................................... 65
3.2 Testing Validity ........................................................................................................................ 66
3.3 Confirmability.......................................................................................................................... 66
3.4 Themes and key research findings .......................................................................................... 67
3.4.1 Research findings.................................................................................................................. 67
4. Summary and conclusion..............................................................................................................................98
4.1 Summary.................................................................................................................................. 98
4.2 Conclusion ............................................................................................................................... 99
5 References ..................................................................................................................................................... 101
Appendix A – Copy of the Questionnaire .....................................................................................................103

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1. Introduction
The software world is evolving fast from a knowledge-based economy into an economy
based on creative disruption and high pace innovation. One thrilling example to illustrate
this paradigm is that today up to 70% of the turnover of companies is generated by products
(or product features) that didn’t exist 5 years ago (Pikkarainen, Codenie, Boucart & Heredia
2011). My choice of theme within; “Software development and innovation” is based on my
interests in software, web technology and mobile app products and services. As a
Commodore 64 Gen (I belong to Gen X for the record) I started to play around with Basic
programming in an age of ten. Not very innovative coding though! But we played around
with the technology and made some simple lines of code. That sizzling moment was the
spark that started my interest in software. As an adult I have worked with several software
and web products and companies such as Microsoft, Netscape, Linux, Apache, EPiServer,
TYPO3, WordPress, Oracle and Opera Software. In addition have I worked as Consultant
Manager for data warehouse solutions in a Danish company and as technical project
manager on both highly innovative and creative Web and app development projects inside
Creuna AS (Oslo), a “Full Service Digital Bureau”, earlier ranked among the top 5 digital
bureaus in Europe by Forrester Research. I wanted to combine this experience with new
discoveries and learning’s from my Entrepreneurship and Innovation Master study. Through
15 years of experience from the IT, Web and digital communication branch, I have worked
with project management of CRM, Web solutions, mobile apps and consulting about
business, marketing and digital strategies. This (open theme) paper was therefore a good
opportunity to learn more about the roles of creative thinking and innovation management
in software development projects.

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1.2 Research objectives and purpose
Why are some company’s able to create hot “blockbuster” software products/services and
others not? What’s their approach to creative thinking and innovation during their software
development and project scope? I have identified the following seven areas to research in
this paper:
• Software product/service strategy
• Creativity processes
• Nature of the innovation
• Software innovation & leadership
• Software Team
• Project Management and methodology
• Commercialization of Software Innovation
Does many or few really discuss, identify and define their vision, goal and objectives before
they start their respective projects? Do they always focus on both business and marketing
strategies together with innovation strategies? Can a company succeed with one creative
“hero”, or is an important success factor team creativity and creativity put in system? What
pros and cons are there with first-mover or follower strategy and tactics within the software
industry? What kind of business models succeed within the software industry today? Can
using the wrong or lack of project management methodology and project tools destroy all
good ideas? Is it more important to deliver real user value than radical innovations from a
market perspective? What is most important of the seven areas above to succeed? Can one
function without the others? Is it such a thing like: One eureka success factor? Because of
these thoughts and sub questions I decided on the following main research question: “How
to empower software development with creative thinking and innovation?” I will discuss
insights due to these questions mentioned above based on the selected curriculum books
and from my own survey based on my designed in-depth questionnaire. I will look more
deeply into creativity and innovation management processes and leadership and team
mechanisms related to innovation within software development. There are lots of
techniques and frameworks within creative thinking i.e. Six Thinking Hats, Concept Fan, DO

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IT and Min Basadur's Simplex to mention a few. I have decided to investigate the following
frameworks from Edward De Bono; The Six Thinking Hats program and his Lateral Thinking
program. Original were also two other parameters planned to analyze and were included in
the survey questionnaire; Budget and time aspects. But I decided to exclude them to make
more room to investigate the other seven areas and aspects. My main purpose are to learn
more about creative thinking and innovation management related to software development,
not to research software development or project methodology as standalone topics (Gall,
Gall & Borg 2003).
My study objectives are to:
1. Identify: Existing knowledge about the identified topics
2. Explore: With own qualitative research with web survey/questionnaire
3. Describe: Findings from survey
4. Explain: Findings from survey
5. Assess/Evaluate: Deductive research match findings related to existing research
Qualitative research approach
In an ideal world, the process of scientific qualitative research follows a funnel pattern,
starting off with broader and more general types of questioning and moving to more specific
and structured types of questioning. As such, the early stages of research are likely to be
exploratory, and the selection of data collection methods and the development of my
questionnaire should reflect this. The early stages in the overall research process are where
qualitative methods are often (though not always!) employed. The primary reason for using
less structured forms of inquiry in the incipient stages of research is to improve internal
validity; that is, to make sure that we’re asking the right questions and in the right way (Gall,
Gall & Borg 2003). Hopefully have I managed to ask enough quality questions to get
interesting analysis and that they are helpful regarding my research purpose. To do my own
research have I chosen qualitative methodology, and more specifically, a web based
questionnaire to gather my empirical data to this educational research. I have chosen

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qualitative deductive research, because I wanted to coordinate findings and insights from
the curriculum authors with my own survey. I wanted to do this because of the importance
of connections of my discoveries to insights, theory and theses in my curriculum. Norman
Denzin and Yvonna Lincoln define qualitative methodology like this: “Qualitative research is
multimethod in its focus, involving an interpretive naturalistic approach to its subject matter.
This means that qualitative researches study things in their natural settings. Attempting to
make sense of, or interpret, phenomena in terms of the meanings people bring to them”
(Gall, Gall & Borg 2003 p. 24). I further designed six scale dimensions for sentiment based
feedback status; strongly agree, agree, neutral, disagree, strongly disagree and Don’t know. .
I have tried to get the questions and statements as easy to understand as possible to avoid
participants doing their own interpretation. To test the survey flow and level of difficulty, I
did performed several test surveys on a test group. I did some minor adjustments in phrases
and deleted other questions. My questionnaire aim to explore; insights from current and
past software projects, within different software companies and consultant companies, and
with people in roles with hands on practice. Data is collected via the Web survey tool (SaaS)
Enalyzer and stored inside the Enalyzer database safe in the cloud.
1.3 Chosen theory and curriculum
Theoretical basecamp within the curriculum is about innovation, software innovation,
creative thinking, innovation management, technology disruption, project methodology,
software innovation and leadership, and software innovation and team collaboration. I have
used two main books within the topic software innovation as core sources: “Software
Innovation, Eight work-style heuristics for creative system developers” by Jeremy Rose
(2010), “The Art of Software Innovation: Eight Practice Areas to Inspire your Business” by
Pikkarainen, Codenie, Boucart & Heredia (2011). In addition have I added several other
business books so my research can include areas such as business & marketing strategy,
innovation strategy and product & service strategy all important areas when creating
software products or services from start to launch and to user adoption and diffusion.

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Selection of respondents
My criteria’s for the respondents to participate were the following aspects:
• Experience from current or past software development projects
• Function in roles like: Team leader, Poject Manager, mid-level manager, leader or consultant
Among the respondents are in-house projects the majority but also some customer projects
included from consulting businesses. Among the selection are there variations of small/
medium and a few bigger companies included. I used my network via LinkedIn to get these
respondents. About 10 targeted people agreed in advance to participate to the survey. I
managed to get 8 respondents to fulfill the web survey. Company and industry overview:
Company A: Career counseling web tool
Industry: Web services: SaaS. Product/Service: Work Interest Explorer (WIE). Number of employees: 1-4.
Role/position: CMO. In-house project: Yes.
Company B: Consulting Company
Industry: Consulting - Adserving. Product/Service: Consulting. Number of employees: 5-10. Role/position:
Director/Consultant. In-house project: No.
Company C: Collaborative Consumption Company
Industry: Web service/SaaS. Product/Service: Collaborative Consumption. Number of employees: 5-10.
Role/position: Co-Founder. In-house project: Yes.
Company D: TV/Media Company
Industry: Customer service. Product/Service: Avaya Softphone. Number of employees: 100+ Role/position:
Infrastructure Administrator. In-house project: No.
Company E: Game Production Company
Industry: Gaming. Product/Service: Computer/Online Games. Number of employees: 100+ Role/position:
General Manager. In-house project: Yes.

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Company F: Digital Communication bureau
Industry: Digital Communication bureau. Product/Service: Digital consulting. Number of employee: 21-30.
Role/position: Project Manager/Consultant. In-house project: No.
Company G: Consulting Company
Industry: Consulting. Product/Service: Digital consulting. Number of employee: 1-4. Role/position: Team
Manager – Web development. In-house project: No.
Focus group and respective company information – anonymously verification:

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E-Mail distribution of the web survey
My survey invitations included five key components:
• Introduced the survey objectives
• Explained why it's important to participate
• Brief overview of the survey topic
• Estimated the length of the survey to balance expectations

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Multi-gadget access to the web survey
The web survey tool Enalyzer is built with responsive design (Figure 1) to fit all kinds of
gadgets; PC, MAC, SmartPhones and Tablets. This should increase the response speed, with
the ease of use and “in hand” possibility.
Figure 1. Survey start-screenshot.
Email Reminders
Email survey reminders have been proven to boost response rates. Using a system (Enalyzer)
that will automatically send reminders to individuals who have not yet completed my survey
is a huge time saver. I sent two reminders and managed to get a few more participants for
my survey.

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1.3.2 Questionnaire
The design of the questionnaire used combinations of statements, questions, opens fields
and aimed at drawing out individual experiences and perceptions (Gall, Gall & Borg 2003). I
decided on to build an in-depth questionnaire with a target focus group which are ideal
method for collecting phenomenological data (ibid). The survey was designed in ten
parts/steps, with a visual progress bar (Figure 2).
Figure 2. Survey screenshot.
You find the original questions and statements in appendix A as documentation and
verification.

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1.3.3 Planning validity
In its purest sense, this refers to how well a scientific test or piece of research actually
measures what it sets out to, or how well it reflects the reality it claims to represent. Like
reliability (Higher relevancy metric in quantitative research), validity in this sense is a
concept drawn from the positivist scientific tradition and needs specific interpretation and
usage in the context of qualitative research (Gall, Gall & Borg 2003).
Content validity
Content validity occurs when the research provides adequate coverage of the subject being
studied. This includes measuring the right things as well as having an adequate sample.
Samples should be both large enough and be taken for appropriate target groups. The
perfect range of question gives a complete measure of all aspects of what is being
investigated. Content validity is related very closely to good research design. A high content
validity question covers more of what is sought. A trick with the questions is to ensure that
the entire research purpose are covered (Gall, Gall & Borg 2003).
Internal validity
Internal validity occurs when it can be concluded that there is a causal relationship between
the variables being studied. A danger is that changes might be caused by other factors. It is
related to the design of the experiment (Gall, Gall & Borg 2003).
Threats to validity
The following identified threats to validity in my research are (Gall, Gall & Borg 2003):
• Inappropriate selection of constructs
• Insufficient data collected to make valid conclusions
• Measurement done in too few contexts
• Inadequate selection of target subjects
• Complex interaction across constructs
• Respondents giving biased answers or trying to guess what they should say

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Objectivity
In its purest sense, the idea of objectivity assumes that a truth or independent reality exists
outside of any investigation or observation. The researcher's task in this model is to uncover
this reality without contaminating it in any way. In qualitative research, a realistic aim is for
the researcher to remain impartial; that is, to be impartial to the outcome of the research, to
acknowledge their own preconceptions and to operate in as unbiased and value-free way as
possible (Gall, Gall & Borg 2003).
2. (Theory chapter) New paradigms within Software development and innovation
To quote Peter Stuer from the company Spikes NV (Pikkarainen, Codenie, Boucart & Heredia
2011): “Ever-accelerating technological change has moved innovation in the software sector
past mere opportunity in the heart of the business strategy. We used to be amaze that young
start-ups could challenge and unseat global IT giants in just a few years. Now we measure
such shifts in mere months and speculate on how the current crop will stand up to next
quarter’s challengers. Innovation in software is about more than planning the next product
release or service methodology update. We need to embrace perpetual agile business
ecosystem incubation and adaptation to increase value creation.” But there is not only
software, applications or mobile apps related to the topic software and innovation.
Regarding Pikkarainen, Codenie, Boucart & Heredia (2011) a whole new market entry have
occurred; the market of software tools to support innovation: “In the 1990s, entrepreneurs
spotted this opportunity and founded companies that developed software tools to support
different parts of the innovation process. Up until that time, the available innovation theories
were mainly spread in the world through books and by consultants with slide shows.
Software had a disruptive effect on this market. Suddenly, it became possible to create all
kinds of supportive tools for the various innovation theories that were out there. Today, this
market of software innovation services has matured and several players are active in it.”
(ibid). Welcome to the era of software innovations & disruptive creative companies.

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2.1 Software development & Innovation – Definitions and context
What is the definition of innovation? And what lies in the phrase “software development &
Innovation”? What are the types of innovation? What are the context and limitations for the
research in this paper? Software innovation in this paper is understood as a development
process which leads to a software artefact; a program, application (App), embedded
software (I.e. Inside a car), an operation system, algorithm or code. In principle, the process,
the product, or both can be innovative. Software is built by developers/programmers
working in teams, so it’s appropriate to study both how individual developers/programmers
are creative, and how teams function in an innovative way. The definitions of related words
and phrases (Smith 2006, Schilling 2010) are:
Invention
An invention is a unique or novel device, method, composition or process (not necessary
launched or commercialized).
Innovation
The practical implementation of an idea into a new device or process; included
commercialization (Product/service) or usage (Process innovation).
Commercialization of an invention
Regarding Rose (2010 p. 16) innovation sometimes is described like the following formula:
“(Innovation = Invention + Exploitation + Diffusion)
Where innovation is composed of the invention (new idea or artefact) itself, its commercial
development and exploitation, and its adoption in a wider community of users. Thus the
result of successful innovation is experienced as change in the way people work, the way
business is carried out, people’s choice of entertainment, their communication habits and
interaction, the governance of communities, and in many other aspects of social life.
Innovation is itself, as we shall later discover, social – usually the work of many people,
rather than a single idea generator.”

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Three main steps in innovation processes (Smith 2006):
• Invention (Idea creation, brainstorming, Lateral Thinking, R&D)
• Commercialization (Design, prototyping, choice of business model, choice of coding/tech, pilot, beta,
launch)
• Diffusion
The idea step includes (Smith 2006):
• Association
• Adaption
• Analogy
• Serendipity
Three main types of innovation processes (Smith 2006)
• Individual
• Closed
• Open
Product and service innovations can be categorized in a number of different ways (Smith
2006, Schilling 2010). With Henderson and Clark’s framework (Smith 2010 p. 32) for
categorizing innovation into radical, architectural, modular and incremental innovation
types, I will try to adapt this framework into the software development industry. With
Henderson and Clark’s the core part of the product belongs to architectural innovation. To
quote Henderson and Clark; “the essence of an architectural innovation is the
reconfiguration of an established system to link together existing (In this case:
software/coding) components in a new way” (Smith 2010 p. 37).

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Innovation types & styles
Different innovation styles can be used to create an innovation:
• Modifying
• Exploring
• Experimenting
• Visioning
Types of software innovation (Radical, Modular, Incremental, Architectural)
There are four main innovation types within the innovation theory (Smith 2006, Schilling
2010):
• Radical innovation: (New: Totally new tech or concept. Not built on existing tech. High degree of
novelty)
• Modular innovation: (New: Built on existing building blocks and/or tech)
• Incremental innovation: (Improved: Small steps of optimizing features of existing tech or service)
• Architectural innovation: (Improved: Reconfigure existing systems in a new way)
To innovate successfully with software products or services, companies must (Pikkarainen,
Codenie, Boucart & Heredia 2011):
• Understand the product innovations they want to realize with software in their products or services
(I.e.: What features will we offer?)
• Master the processes to realize these product or service innovations (I.e.: How will we realize the
product innovations?)
• In some cases deploy new business models to bring the product or service innovations to market.

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2.2. If you do not share ideas, they are wasted!
“If you do not share ideas, they are wasted!”says Max Mckeown (2010). Sure, the absolute
first stage of any invention or innovation journey is to start sharing your ideas with others.
People with their ideas need others internal and external view, perspective and constructive
criticism to get qualified feedback. To get an idea to really fly, you need others believe,
enthusiasm and motivation to succeed as well. The idea owner need to team up with
complementary brainware and not to rare: funding to be able to commercialize. But many
fails to kick start their idea and fail very early in the process. The following common failures
are gathered by Liedtka and Ogilvie (2011 p. 175). The failure modes that many companies
did not capitalizing on their promising ideas such as the following scenarios:
• Failure to connect the concept to an unmet customer need
• Failure to get it prioritized amid the sea of ideas
• Failure to prototype or visualize it so others understand it
• Failure to get live customers (Beta users) involved in shaping it
There are three top ideation ways of modern software innovation;
• Company-driven software innovation
• (Public) Crowdsourced - Open-driven software innovation
• (Private) Crowdsourced - Closed community-driven software innovation
Crowdsourced (Open) software innovation is the de facto ground-breaking user-driven
innovation process inside today’s software scene.

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Keep your radar ON for new ideas
“McDonald`s hamburgers are the same as Burger Kings hamburgers – only different.
Knowing that innovators make new ideas from old ideas means you won’t try to start from
nothing. You can’t anyway. All your ideas come from something you already know. Not trying
to start from nothing saves time. Working with existing knowledge helps you to build
something better. Recombining what already exist increases the practicality of your ideas.
You know its components already work. And it boosts the chances that people will accept it
because it’s the same – only different!” (Mckeown 2008). The journey from the birth of a
software idea to release (launch) and to market diffusion can be fast or it can be painful. The
most important thing regarding the innovation aspect is to keep your radar always on for
new ideas. In addition you need people around you; team, organization and culture to
nurture your ideas and evaluate them. “Two important, but separate, processes are needed
for innovation” (Kourdi 2009 p. 123):
• Idea building, where people propose ideas and then develop and nurture them
• Idea analysis, where these ideas are tested and evaluated
“Innovations need connectors, people who can combine things, either conceptually or in
practice, and make things happen. For this reason, innovation flourishes where collaboration
is encouraged” (ibid). The software innovation canvas below (figure 3), from The Art of
Software Innovation (2011) provides an overview of the activities that software companies
can consider when innovating their respective software products or services. It is also
possible to use the canvas as a kind of compass to help companies to find the right direction
for their Innovation Management process towards their radical or incremental software
innovation.

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Figure 3. The Software Innovation Canvas. The Art of Software Innovation (2011) .

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2.3 Innovation Management
Depending on the nature and scope of the software innovation
project, the main question to ask is: How systematically should the
innovation process be organized? Innovation Management is the
task including everything from start to launch. Successful innovation
management is only possible, if the individual steps are thought-out,
structured and planned. The single steps must therefore be checked
critically. A holistic innovation management therefore comprises
three levels (Rose 2010, Pikkarainen, Codenie, Boucart & Heredia
2011, Liedka & Ogilvie 2011):
• Normative level: vision, mission, goal and objectives, success criterrias , models
• Strategic level: resources, technologies, know-how, competencies of team, markets, customers,
suppliers, competitors
• Operative level: design and guidance of the innovation process, performance, quality, budgets/costs
and time, team collaboration, leadership, project management & methodology, project software
tools, innovation management software tools
The Art of Software Innovation (Pikkarainen, Codenie, Boucart & Heredia 2011) identifies the
following four innovation management areas to master:
The Art of Idea Valuation
Valuating radical ideas can be even more challenging than valuating incremental ideas. This is because
decision-making difficulty is associated with an increase in the degree of uncertainty and ambiguity in the
decision- making context. Decision about radical idea launching can change the whole future of the software
company.
The Art of Openness
The Art of Openness practice area provides companies with activities for enhancing competitiveness using
external knowledge. In the case of radical innovation the utilizing of external experts is often even more
important than in the case of incremental innovation. Thus, being successful with incubation can require some
of the activities in the Art of Openness practice area to be addressed.

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The Art of Innovation Stimulation
Innovation stimulation is an important way of supporting company innovativeness, increase the opportunities
of the companies for radical innovation creation. Incubation projects need to be stimulated in a particular way.
The Art of Optimizing the Impact of Critical Experts
In the case of radical innovation, the companies need an ability to reconfigure resources to match to the needs
of the new situations. Each radical innovation is different. Each time when the radical innovation is valuated,
there is need for the different competences from inside and outside of the software company.
In addition will strong leadership capacity and team collaboration with shared vision support
these four important areas and aspects. These notions point out the necessity of software
innovation put into system and the importance of Innovation Management, discussed in the
next chapter.
In the book Designing for Growth, Jeanne Liedtka and Tim Ogilvie (2011) presents how a
modern framework with design thinking can help practitioners more effectively, faster and
smarter to step up the innovation process for product and service development (Figure 4):
Figure 4. Source: Designing for Growth by Jeanne Liedtka and Tim Ogilvie (2011).

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2.3.1 KPIs - You can't manage what you don't measure!
Where on road against launch are you? Are you hitting the success criteria’s? If you can’t
measure it, it doesn’t count; moreover to steer on a measure, it has to be clear what the Key
Performance Indicator (KPI) is exactly indicating and which process one has to measure. That
is why you have to remember the following rule while you are defining a KPI: keep your KPI
SMART!
SMART is an abbreviation for the five conditions of a good KPI:
Specific - It has to be clear what the KPI exactly measures. There has to be one widely-accepted definition of
the KPI to make sure the different users interpret it the same way and, as a result, come to the same and right
conclusions which they can act on.
Measurable - The KPI has to be measurable to define a standard, budget or norm, to make it possible to
measure the actual value and to make the actual value comparable to the budgeted value.
Achievable - Every KPI has to be measurable to define a standard value for it. It is really important for the
acceptance of KPIs and Performance Management in general within the organization that this norm is
achievable. Nothing is more discouraging than striving for a goal that you will never obtain.
Relevant - The KPI must give more insight in the performance of the organization in obtaining its strategy. If a
KPI is not measuring a part of the strategy, acting on it doesn’t affect the organizations’ performance.
Therefore an irrelevant KPI is useless.
Timely - It is important to express the value of the KPI in time. Every KPI only has a meaning if one knows the
time dimension in which it is realized. The realization and standardization of the KPI therefore has to be time
phased.
KPIs are valued business tools to measure your innovation project progress. Indicators
identifiable and marked as possible candidates for KPIs can be summarized into the
following sub-categories (Wikipedia ❶):

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Categorization of indicators
• Quantitative indicators which can be presented with a number.
• Qualitative indicators which can't be presented as a number.
• Leading indicators which can predict the future outcome of a process
• Lagging indicators which present the success or failure post hoc
• Input indicators which measure the amount of resources consumed during the generation of the
outcome
• Process indicators which represent the efficiency or the productivity of the process
• Output indicators which reflect the outcome or results of the process activities
• Practical indicators that interface with existing company processes.
• Directional indicators specifying whether an organization is getting better or not.
• Actionable indicators are sufficiently in an organization's control to affect change.
• Financial indicators used in performance measurement and when looking at an operating index.
Key performance indicators, in practical terms and for strategic development, are objectives to be targeted that
will add the most value to the business. These are also referred to as 'key success indicators'.
Examples of Innovation Management KPIs:
Source: http://www.smartkpis.com/kpi/functional-areas/knowledge-and-innovation/innovation/

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2.3.2 Software solutions for smartest possible Innovation Management
Today you find several software and SaaS solutions for modern Innovation Management.
Company-driven and public or private community-driven (Crowdsourced) software
innovation. Below you will find a shortlist of some SaaS providers to enhance ideation and
collaboration to foster new innovations; faster and more agile than ever before. See
examples below (Figure 5 ,6, 7 and 8).
Figure 5. Public or private Innovation community with Hunchbuzz. Source: http://hunchbuzz.com/

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Figure 6. Software Innovation with Brightidea. Source: http://www.brightidea.com/customers-software.bix
Figure 7. Source: http://www.quirky.com/

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Figure 8. Company Wide Innovation SaaS solution - Qmarkets. Source: http://www.qmarkets.net/home
Innovation Management is the top leadership’s responsibility. The scope of duties of Innovation
Management include minimum:
• Compilation and evaluation of innovative ideas within and outside of the company.
• Development and maintenance of the company-internal innovation potential
• If wanted: acquisition of Open Innovations and their implementation in the company
• Planning, supervision, implementation and controlling of the company’s innovation activities and
progress
• Determination of the time for innovation to enter the market
• Planning and realisation of possibilities to protect innovative developments (IPR: patents, licensing,
trademarks)
• Innovation Risk Management, Marketing research, Innovation Assessment, Economic Analysis - ROI

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2.4 Software Innovation Strategy
There is no such thing as the perfect business, product, service or software idea… Therefor
we need to think before we act. We need; strategic thinking. We need to create a written
innovation strategy. The innovation strategy must be anchored and coordinated with
existing business and marketing strategies. But first; why bother develop a written strategy?
An important purpose with a written strategy document is to pinpoint all issues and
opportunities to support business goals and objectives (Kourdi 2009). A strategy is a tool to
help moving from an existing situation to a wanted future situation. A strategy plan shall
work as a business tool to achieve goals in a given time schedule and to support
organizational vision. A written strategy should work as a quality tool to ease and support a
short term or long term action plan or campaign (ibid). Rose (2010) points out the following
observations and analysis with two particular directions:
1. Software innovation is dependent on a lot more than programming skill and development method –
traditional engineering skills
2. Many of the situational factors in user communities and societal technology trends can be understood and
analyzed.
The situational factors we have considered here are:
• Technology trends and trajectories
• Convergence and digitalization
• Social and technical infrastructure development
• User (market) demand
• Timing and innovation windows
2.4.1 Software Innovation Strategy Design
Match your software innovation strategy to the nature of your software product or service
and the type of target users and markets (I.e.: B2C or B2B, mass or niche market etc.).
Strategy making within software innovation is iterative; it has to be, because there are so
many interconnected pieces and players. Software Innovation Strategy should minimum
includes the following parameters (figure 9) for process overview:

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• Identifying and defining clear vision, goal and objectives
• Identifying and defining success factors and criteria’s
• Identifying and defining KPIs (Key Performance Indicators)
• Setup of Innovation Management program and project scope
• How shall the product or service help the customer/user solve their problem or challenge?
• Analyzing the target market and user
• Analyzing competing software product or service
• Business model and Marketing SWOT analysis
• Software product or service SWOT analysis
• Identifying and defining clear value creation and value capturing
• Identifying and defining the value proposition and USPs
• Where, when and how to compete (Defining tactics)
Strategy pyramid
Figure 9. Strategy pyramid – Model for strategy development

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2.5 Creativity is a process not an accident!
“Creativity is a process not an accident!” says Max Mckeown (2008), and in that statement
lays lots of understanding and insight. Edward De Bono (1999) explains further: “Creativity is
a messy and confusing subject. Much of the difficulty arises directly from the words
“creative” and “creativity” At the simplest level “creative” means bringing into being
something that was not there before. Understanding the need for creativity in business and
industry today is the easy part. Everyone is face with the need to create a new product or
service, solve a problem or have the leading edge over the competitors. Understanding the
process of creativity and how individuals can learn skills to be creative is what causes
confusion. This creation requires a special skill. The Lateral Thinking program teaches
individuals creativity and the skill of generating ideas while using their knowledge and
experience.” Edward De Bono has two programs/frameworks designed: The Six Thinking Hats
and The Lateral Thinking program. His Lateral Thinking program teaches individuals
creativity and the skill of generating ideas while using their own existing knowledge and
experience. De Bono (1999) presents the following definitions of Lateral Thinking (ibid):
1. “You cannot dig a hole in a different place by digging the same hole deeper.”
2. “Lateral Thinking is for changing concepts and perceptions instead of trying with the same concepts
and perceptions.”
3. In self-organizing information systems, asymmetric patterns are formed. Lateral Thinking is a method
for cutting across from one pattern to another.”
2.5.1 Creative thinking with Six Thinking Hats
The core idea behind Six Thinking Hats is about looking at an idea, suggestion or decision
from all angles and points of view. Six Thinking Hats by Edward De Bono (1999) is an
important and powerful technique. It is used to look at decisions from a number of
important perspectives (Figure 10). This forces you to move outside your habitual thinking
style, and helps you to get a more rounded view of a situation.

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Figure 10. Six Thinking Hats. Source: By Paul Foreman at www.inspiration.moonfruit.com
This tool was created by Edward de Bono in his book Six Thinking Hats (1999). Many
successful people think from a very rational, positive viewpoint. This is part of the reason
that they are successful. Often, though, they may fail to look at a problem from an
emotional, intuitive, creative or negative viewpoint. This can mean that they underestimate
resistance to plans, fail to make creative leaps and do not make essential contingency plans.
Similarly, pessimists may be excessively defensive, and more emotional people may fail to
look at decisions calmly and rationally. If you look at a problem with the Six Thinking Hats
technique, then you will solve it using all approaches. Your decisions and plans will mix
ambition, skill in execution, public sensitivity, creativity and good contingency planning.
How to Use the Tool
You can use Six Thinking Hats in meetings or on your own. In meetings it has the benefit of
blocking the confrontations that happen when people with different thinking styles discuss
the same problem. Each Thinking Hat is a different style of thinking. These are explained
below (de Bono 1999):
White Hat (Facts)
With this thinking hat you focus on the data available. Look at the information you have, and
see what you can learn from it. Look for gaps in your knowledge, and either try to fill them

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or take account of them. This is where you analyze past trends, and try to extrapolate from
historical data.
Red Hat (Emotions)
Wearing the red hat, you look at problems using intuition, gut reaction, and emotion. Also
try to think how other people will react emotionally. Try to understand the responses of
people who do not fully know your reasoning.
Black Hat (Caution)
Using black hat thinking, you look at all the bad points of the decision. Look at it cautiously
and defensively. Try to see why it might not work. This is important because it highlights the
weak points in a plan. It allows you to eliminate them, alter them, or prepare contingency
plans to counter them.
Black Hat thinking helps to make your plans tougher and more resilient. It can also help you
to spot fatal flaws and risks before you embark on a course of action. Black Hat thinking is
one of the real benefits of this technique, as many successful people get so used to thinking
positively that often they cannot see problems in advance. This leaves them under-prepared
for difficulties.
Yellow Hat (Logical & positive)
The yellow Hat helps you to think positively. It is the optimistic viewpoint that helps you to
see all the benefits of the decision and the value in it. Yellow Hat thinking helps you to keep
going when everything looks gloomy and difficult.
Green Hat (Ideas)
The Green Hat stands for creativity. This is where you can develop creative solutions to a
problem. It is a freewheeling way of thinking, in which there is little criticism of ideas.
Blue Hat (Control)
The Blue Hat stands for process control. This is the hat worn by people chairing meetings.
When running into difficulties because ideas are running dry, they may direct activity into

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Green Hat thinking. When contingency plans are needed, they will ask for Black Hat thinking,
etc. A variant of this technique is to look at problems from the point of view of different
professionals (i.e. CEO, team leaders, project managers, R&D Managers, sales & Marketing
directors, Product Managers and Innovation Managers etc.) or different customers.
Case examples with Lateral Thinking (Source: www.debonoforbusiness.com)
2.5.2 Lateral Thinking business case: Motorola
“In 2002, Motorola wanted to create a “product for the future.” The company planned a
three-day event for its product managers with the focus of developing a new high-tech,
hand-held device for people who want cutting edge technology, but don’t want to spend
more than $800. To ensure that the event went as smoothly as possible, Motorola decided to
enlist the help of Master Trainer Jay Wenberg. On the first day, consumer profiles, based on
exhaustive research, were constructed for each existing product. Product presentation and
framing with regional perspective was offered to the group. The goal of the first day was for
product managers to gain detailed understanding of each product’s target market. They
discussed every aspect of the consumers’ traits, including age, income, educational
background, cultural beliefs and daily habits. This gave the managers a detailed picture of
Motorola’s customers. The second day began with a “technology soak,” which defined the
capabilities and limitations of existing technology. Then Jay gave an overview of the Six
Thinking Hats and Lateral Thinking. He led the group through a Green Hat session in order to
generate ideas for the “product for the future.” During the Green Hat session, the group used
the Lateral Thinking technique of Reverse Provocation to challenge the physical limitations of
technology. Jay handed out trinkets from a dime store to assist in a Random Objects exercise.
After all Green Hat ideas had been offered, each one was evaluated using Yellow and Black
Hat thinking. Finally, the group used Red Hat thinking to prioritize the best ideas. The final
result of the Green Hat session was a technologically advanced product called the Accompli.
The device functioned as a mobile business tool or “virtual office” complete with a full
keyboard. Its wireless network connection provided fast Internet access across the globe. In
addition, consumers could install additional business applications on the Accompli and even
play an assortment of games.

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The group then took the White Hat information gathered from the consumer profiles to
practice a “day in the life” of an Accompli owner. They discussed how consumers might use
the new device from the time they woke up to the time they went to bed. The team noted all
the additional features the Accompli might need to make the user’s life easier. For instance,
could it have an alarm? Could it play MP3 music files? What should the greeting sound like?
The group dissected the consumer’s day hour by hour to ensure that the Accompli was the
idea product for the target market. At the end of the event, the product managers were
excited about the outcome of their hard work, and even people who didn’t attend the event
heard about its success. Shortly thereafter, Motorola introduced the Accompli in North
America, Europe and Asia.
Challenge: Create an ultra high-tech device with the price tag of less than $800
Methods: Use Concept Generation, Concept Extraction, Reverse Provocation, Random Object
and Six Thinking Hats to develop the ideal product Results: • Motorola develops and markets
the Accompli 009 Personal Communicator”
Source: http://www.debonoforbusiness.com/asp/case_studies.asp
Key Points
Six Thinking Hats is a good technique for looking at the effects of a decision from a number
of different points of view. It allows necessary emotion and scepticism to be brought into
what would otherwise be purely rational decisions. It opens up the opportunity for creativity
within decision making. The technique also helps, for example, persistently pessimistic
people to be positive and creative. Innovation plans developed using the Six Thinking Hats
technique will be sounder and more resilient than would otherwise be the case.

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2.5.3 Other creativity techniques
Creativity can be enhanced and there are many other techniques out there which can be
used to stimulate it. Here is a list of some of the best known (Rose 2010):
• Assumption Surfacing
• Brainstorming
• Card Story Boards
• Causal Mapping
• Crawford Slip Writing
• Dialectical Approaches
• Five Ws and H
• Mind Mapping
• Nominal Group Technique
• TRIZ

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2.6 Software innovation & Leadership
Software innovation needs modern management and leadership. Managing software
developers and programmers with outdated leadership practices will not work. “Engaged
employees are more creative and more willing to accept innovative ideas from others. Most
CEOs value creativity and employees who are allowed to be creative are more engaged with
their current positions. A company’s culture can either foster or stifle innovation. Fortunately,
business leaders are able to shape a more creative work environment if they follow a few
basic guidelines” (Rose 2010):
• Maintain an open dialogue between employees and upper management
• Organize brainstorming sessions
• Give your employees regular opportunities to bounce ideas off each other.
• Do not force people to be innovative
• Engage employees by encouraging them to share creative ideas
• Do not limit creativity to special occasions.
• Remain flexible and forgiving
• Keep track of company innovations (I.e. with Innovation Management software)
2.6.1 How to Collaborate to Foster Innovation
“Establishing a creative environment takes more than just turning your employees loose and
giving them free reign in the hope they’ll hit on something valuable. As with any other
system, the process of creativity requires the proper framework to operate effectively,
which also enables management to evaluate the profitability of the results” (Rose 2010).
There are many team or project configurations which offer different approaches and
benefits to foster innovation management. Here is a overview of the main types of
collaborative innovation types explained in figure 11 by Board of Innovation:

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Figure 11. Model: Fronteer Strategy. Source: http://www.boardofinnovation.com/wp-
content/uploads/2011/08/Benchmark_misemo_cocreation.pdf
Two different leadership mindsets (Figure 12) exemplified by Jeanne Liedtka & Tim Ogilvie
(2011):
Figure 12. Source: Designing for Growth (2011).

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Clear leadership is important within software development. “The five practices and ten
commitments of exemplary leadership” (Kouzes & Posner 2012) points out the following core
values (Figure 13):
Figure 13. Source: The leadership Challenge p. 29.
“Many leaders in upper management lose interest in supporting creativity and innovation
because they do not bother to keep track of past innovations. Knowing how many employee
innovations have been implemented and how successful they are, presents a clear picture of
the financial benefits of employee creativity. Keeping track of innovations will also indicate
whether any alterations need to be made to recently implemented programs or the company
culture” (Rose 2010).

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2.6.2 New generations – A new breed of leaders
What about the culture within software companies? There are lots of young people, both as
developers and programmers AND younger leaders than inside other industries. What
expectations do Gen X and Y have to leadership today? Many think that these generational
differences are important for managers in the workplace to pay attention to. Teck and
Hennessy look into changes within leadership and new generation (Teck & Hennessy 2011).
They have ranked Top 10 expectations of leaders by generation (ranked based on
frequency), see figure 14 for details.
Figure 14. Source: http://www.cscollege.gov.sg/Knowledge/Pages/Generations-and-Leadership.aspx
Finding the optimal tactics are the leader’s responsibility. Here are some useful questions for
the leaders to ask to setup your innovation process and team (Rose 2010):
• Which people do you want in your innovative team?
• Which roles should be filled in an innovative team process?
• How structured should the team process be (tools and techniques versus free interaction)?
• What is the creativity environment for your team and how can you improve it?
• What are the innovative work habits (patterns) of your teams?
• How does the team promote team learning and dialogue?
• How does the team develop a shared purpose and overview?
• What kind of automated tool support does an innovative team need?

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2.7 Software team
Here is a short version of the different software roles you maybe need to pick to your
software development project:
Software Architect
This is your go-to team member at the very start of the project who constructs the “big
picture”. He or she creates and delivers blueprints, specs and analyse the user experience
demands to actually develop the application. This is typically the team member who will
command the highest salary. However, if they do their job right you don’t need them on
staff forever. You may want to hire an independent contractor in this role.
Software Designer
This team member would be responsible for designing the individual modules or
components of a software application. Basically, if you break down the overall architecture
into smaller pieces, this is the where the design comes in. The skills of a software architect
and a software designer may overlap. You may be able to hire one person to fill both roles –
especially for small business projects.

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Software or System Analyst
An analyst plays a supportive role for both the architect and the designer. This team member
is responsible for collecting or developing the information needed to determine the project
specifications and requirements. The analyst is the link between the software team and the
business team, someone who’s good at understanding the purpose of the application from a
business perspective. This is an important role to fill if you want to make sure your
application delivers value for your company or customer.
Software Engineer
An engineer is a software developer who actually creates code. However, the engineer is
usually a high level programmer and may take on the role of project manager for your team
rather than doing the “grunt work”. This is the person who typically understands the whole
development process from requirements, UX, design to development, testing and
implementation. An experienced software build engineer will command a much higher
salary than a mid-level software developer.
Software Developer
This is a catch-all term that may include any of the following team members who create your
application step by step:
• Programmer
• Coder
• Tester (Q/A)
Developers are often distinguished by titles like “Senior”, “Junior” or “Entry Level”. Your
software engineer or project manager is the person to talk to when you need to find out
how many and what kind of developers to hire for a specific job. Keeping your team small (4-
9 people) is a good idea if you want to use agile development techniques. Whether you hire
temporary or permanent team members, be sure the project is appropriately documented
both the design brief and all the tech specifications. That way, you have all the information
you need for further development, integration, testing and trouble-shooting later!

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2.7.1 Learning capabilities
Jeremy Rose (2010) identifies the following areas for team members to understand during
the software development project. Here are the major components:
• The software has a particular user community, and the characteristics of that community are understood
• The software is novel – it does something that other software cannot for its user community
• The software has a particular utility for the community, the form of which can be understood
• When the software is in use in the user community their behaviour will be different in certain ways (social
change) and it is understood how
• The user community can be understood as a market in an economic sense, and the software has an economic
value, price and cost which is understood
• The software is technically innovative, perhaps displaying digitalization or convergence, in the context of a
particular technology trajectory
• The necessary infrastructure for the user community to use the product is in place, or will be when the product
is released, and is understood.
Individuals and organizations need to constantly gather new sources of information in order
to expand their knowledge and grow. Because the world is changing at an ever-accelerated
pace, today’s great idea will be tomorrow’s passing fad, and the day after’s history lesson.
The learning roles described below will help keep your team from becoming smug about
what you know; instead, these roles will keep you questioning your own views and remain
open to new insights. By adopting one or more of the roles, your team can explore a
different point of view and create a broader range of innovative solutions. Kelley organized
the ten roles into three categories: learning, organizing and building. Here are the 10 roles
conceptualized by Tom Kelley (2005):
• The Anthropologist brings new learning and insights into the organization by observing human
behaviour and developing a deep understanding of how people interact physically and emotionally
with products, services, and spaces.
• The Experimenter prototypes new ideas continuously, learning by a process of enlightened trial and
error. The Experimenter takes calculated risks to achieve success through a state of “experimentation
as implementation.”

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• The Cross-Pollinator explores other industries and cultures, and then translates those findings and
revelations to fit the unique needs of your own organization.
The organizing roles are played by individuals who are savvy about the often counter
intuitive process of how organizations move ideas forward. Kelly found that ideas could
not speak for themselves; instead, even the best ideas must continuously compete for
time, attention, and resources. It’s not just office politics or red tape; it’s a complex game
of chess, and the Organizing Personas play to win.
• The Hurdler knows the path to innovation is strewn with obstacles and develops a knack for
overcoming or outsmarting those roadblocks.
• The Collaborator helps bring eclectic groups together and often leads from the middle of the pack
to create new combinations and multidisciplinary solutions.
• The Director not only gathers together a talented cast and crew but also helps spark their creative
talents.
The four remaining personas are building roles that apply insights from the learning roles
and channel the empowerment from the organizing roles to make innovation happen.
When people adopt the building personas, they stamp their mark on your organization.
People in these roles are highly visible, so you’ll often find them right at the heart of the
action.
• The Experience Architect is that person relentlessly focused on creating remarkable individual
experiences. This person facilitates positive encounters with your organization through products,
services, digital interactions, spaces, or events. Whether an architect or a sushi chef, the Experience
Architect maps out how to turn something ordinary into something distinctive —even delightful—
every chance they get.
• The Set Designer looks at every day as a chance to liven up their workspace. They promote energetic,
inspired cultures by creating work environments that celebrate the individual and stimulate creativity.
To keep up with shifting needs and foster continuous innovation, the Set Designer makes adjustments
to a physical space to balance private and collaborative work opportunities. In doing so, this person
makes space itself one of an organization’s most versatile and powerful tools.
• The Storyteller captures our imagination with compelling narratives of initiative, hard work, and
innovation. This person goes beyond oral tradition to work in whatever medium best fits their skills
and message: video, narrative, animation, even comic strips. By rooting their stories in authenticity,

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the Storyteller can spark emotion and action, transmit values and objectives, foster collaboration,
create heroes, and lead people and organizations into the future.
• The Caregiver is the foundation of human-powered innovation. Through empathy, they work to
understand each individual customer and create a relationship. Whether a nurse in a hospital, a
salesperson in a retail shop, or a teller at an international financial institution, the Caregiver guides the
client through the process to provide them with a comfortable, human-centered experience.
2.7.2 Software team practices
Routines, communication, collaboration and leadership culture results in team practices.
Coplien’s research (Figure 15) within software development companies resulted in his top
ten software practices (Rose 2010):
Figure 15. Coplien’s top ten software practices.

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2.8 Project Management
2.8.1 Project Methodology and scope
Project management is the management necessary to get a project to a certain result:
• in a certain way
• in a certain time
• with certain resources
Content-wise a project is marked by a clear vision/goal definition and described success
criteria’s. Orders are clearly described and must be fulfilled within the framework of a closed
task. There are clear definitions in regard to performance (result orientation), which must be
fulfilled in the project’s framework. Time-wise the project is marked by a defined starting
and end point, which are most of the time fixed and rarely flexible. Organizational there are
clear restrictions in regard to time, budgets and human resources, within which a project
must be carried out and the project goals must be reached. Structurally a project can be
isolated from other plans and temporarily suspends the existing organizational structure. In
the constellation of the project employees that complement each other due to their
competencies are brought together in a onetime team line-up.
Project management can be divided into the following phases:
• Phase 1: definition phase
• Phase 2: planning phase
• Phase 3: implementation phase
• Phase 4: final phase
The most common software project methodology today are agile: “Agile methods (Adaptive
Software Development, eXtreme Programming, SCRUM, MSF) focus on practical
development tasks, programming, prototyping and customer contact - usually in an iterative
or incremental process which is better at handling change” (Rose 2010).

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2.8.2 Agile Delivers a Higher Success Rate
Agile projects are successful three times more often than Waterfall projects, according to
the 2012 CHAOS Manifesto (Figure 16) from the Standish Group:
Figure 16. Source: Mountaingoatsoftware.com
2.8.3 Do agile methods promote innovation?
“Many developers may suspect that agile methods offer a software process that is more
conducive to innovation. It’s clear that the introduction of agile methods to a traditionally-
oriented software firm can be a process innovation. There are also some theoretical reasons
to believe that they should be helpful for innovation. Flexibility helps deal with the
uncertainties of working with leading edge software technologies, bureaucracy (avoided in
agile methods) is a known creativity barrier, and interaction with customers develops
domain knowledge. However agile methods were developed in response to the perceived
need for more effective, programmer-friendly development methods - not in order to
further innovation. There are few studies or evidence which supports the idea that agile
methods lead to more innovative software products than traditional methods. Furious
development in response to rather un-reflected use cases and feature backlogs may actually
hinder innovation by removing the incentive and opportunity for idea generation. It’s
possible to argue that some elements of agility are necessary for an innovative development
process, but an agile process will hardly be sufficient” (Rose 2010).

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2.8.4 Visual control of the project with kanban board
Kanban boards (Figure 17) are very popular visualization tool for software development companies.
The word kanban is Japanese. Roughly translated, it means kan=”visual” and ban=”card or board”).
Kanban itself is very simple. As its name implies, it involves visually mapping your workflow on a
board.Key benefits with kanban boards are:
• Visualize your workflow
See what is going on at a glance: How many tasks there are in each phase, and who is working on
what.
• Focus on the work at hand
Working on everything simultaneously slows you down with too many tasks in various states of
completion. Finish more in less time with Work In Progress limits.
• Accurate estimates
By using automatic time tracking, flow measures your progress and makes estimates for you based on
your past performance.
• Minimal upfront planning
Big plans can quickly become obsolete in a constantly changing environment
• Less need for estimates
kanban tracks your progress, which is a reliable indicator of your future performance
• Just-in-time production
Don't work harder, work smarter. Get advantage of emergent opportunities by limiting work in
progress.
• Customer Value
It creates opportunities to ensure that the team is always working on a feature that has the highest
customer (user) value.
Source: http://www.agilesoc.com/articles/agile-ic-development-with-kanban/

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Kanban board with software development example:
Figure 17. Source: http://agileconsulting.blogspot.no/2010/05/kanban-overview-created-on-my-ipad.html
A to-do list is a simple way to manage a project. On a to-do list, a task is either done or not.
In reality, things are rarely that simple. What happens in between is completely missing from
the picture. To-do lists do not have kanban's Work In Progress (WIP) limits. When there is no
limit on the number of tasks that can be worked on simultaneously, your team loses focus,
and everything gets longer to complete. WIP limits allow you to discover the optimal
throughput for your team. With the right WIP limits, you can avoid tasks piling up, and
balance demand against your team's capacity. There is no reliable way to measure the time
spent on each task in the absence of kanban's multiple phases and WIP limits.
Screen Shot source: http://www.atlassian.com/software/greenhopper/overview/kanban

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Due-date estimates are also problematic because of the tendency to add "safety buffers".
Eventually these buffers add up, and everything gets longer and longer to complete. SCRUM
addresses some of the shortcomings of to-do lists. It supports multiple phases, and instills a
sense of urgency with its sprint concept, but it falls short in a number of areas. In SCRUM, a
number of tasks are chosen for each sprint, and the team makes estimates for each task
beforehand. Once a sprint is in progress, no changes are allowed. In reality, that does not
work quite well. Since estimates are after all just educated guesses, you have to work extra
when you are behind, and you waste time when you are ahead. There are no WIP limits in
SCRUM. There is nothing to prevent a team to work on everything simultaneously, leading to
many tasks in different states of completion.
Figure 18. Screen Shot source: http://www.atlassian.com/software/greenhopper/overview/kanban
Kanban solves the problems inherent in to-do lists and SCRUM by introducing WIP limits
(Figure 18), and eliminating estimates and rigid timeboxes. The result is a smoothly flowing
system that is both flexible and robust.

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Project Management software tools - Examples
Axosoft: http://www.ontimenow.com/scrum
Source: Axosoft - http://www.ontimenow.com/scrum/dashboard
Figure 19. Source: http://www.atlassian.com/software/jira

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Source: http://www.atlassian.com/software/greenhopper/overview/kanban
Agile Software - JIRA - Case Story - KIXEYE (http://www.KIXEYE.com/)
“KIXEYE makes competitive online combat strategy games for the mid-to-hardcore gaming
crowd, releasing feature updates on a weekly basis to its passionate community of over five
million. KIXEYE's flagship titles include Backyard Monsters, Battle Pirates, and War
Commander. Nowadays, a whopping 90 percent of KIXEYE uses JIRA (Figure 19) on a daily
basis. Most departments, software development-related or not, use it to bring transparency
and metrics to all their project tracking. Kenn White, the project manager for a “top-secret”
new game at KIXEYE, says JIRA has helped his team of developers become 30 percent more
accurate with their time estimates. “We're hitting 70 percent of our goals more often. We're
getting faster and more accurate with each sprint”. “Managing a live product means
balancing lots of priorities,” said Sarah Levantine, senior product manager for KIXEYE.
“You’ve got live bugs you have to address as soon as possible, long-term roadmap items, and
all the while, you have to keep your players interested all the time.” (Source:
http://www.atlassian.com/company/customers/case-studies/KIXEYE)

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Source: https://icon.spigit.com/welcome
Source: http://www.spigit.com/products/icon/

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Test automation software - Example
Test automation and making test automation collaborative are one of the important areas to
do as fast as possible but with high quality. “TestArchitect uses keyword-driven actions to
enable team members to create and update tests without programming scripts. Multi-
application architecture makes it possible to create just one set of tests that can be used for
multiple applications. As a result, you can increase test coverage, decrease testing time, and
rapidly release your software with confidence” Source: http://www.logigear.com/testarchitect/
User testing services - Examples
Internal testing is a must do, but as always is objectivity good. External eyes can give high
valuable feedbacks, fast and for reasonable prices. Userlytics (http://www.userlytics.com/) and
UserTesting.com is two of the leading international providers (figure 20).

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Figure 20. Source: http://www.usertesting.com/mobile
Design brief
Every software project should have a design brief to get a flying start. Liedka and Ogilvie
(2011p. 46) points of the following content for optimal design brief:
• Project Description
• Intent/Scope
• Exploration Questions
• Target users
• Personas
• Research Plan
• Creative Plan
• Innovation Plan
• Expected Outcomes
• Success Metrics
• Project Planning

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User Experience (UX) – Framework Example – (Figure 21)
UX should always be analyzed early on in the planning phase of any software project.
Figure 21.
Quality Management
To ensure high quality in software innovation projects, Quality Management should be
deployed as an important part of the Innovation Management. Some main areas should
always be considered (Turner 2006):
• Internal testing (IU, UX, module and integration tests)
• Test sign off
• Acceptance sign off
• Launch sign off
• Project documentation
• User manual or tips

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2.9 Commercialization of Software Innovation
The job is unfortunately not done after launch. Now starts using all the early adoption and
diffusion tactics, which should be noted and think through in the innovation strategy
document. An innovation strategy should be worked out after that the business and
marketing strategies are in place.
2.9.1 First-mover or follower strategy?
There are two main strategies for commercialization of your software product or service.
Either you manage to create a radical innovation and deploy a first-mover strategy, or you
decide to create an incremental innovation and deploy a follower strategy. What does first-
mover strategy mean? To quote Smith (2010 p. 163): “The first-mover strategy, as its name
implies, is about being first to market with a new product or service.” What does follower
strategy mean? Follower strategy described by Smith (ibid) “…a follower or latecomer or
sometimes even an imitator strategy, this involves taking a “wait-and-see” approach, rather
than perceiving innovation as a race in which being first to market is critical” (ibid). The
follower often analyses the first-movers innovation, software & tech, product or service, and
how the market adapt to the innovation. This is also explained by the theory of punctuated
equilibrium, quoting Smith (2010) “…the theory of punctuated equilibrium which predicts
that periods of relative stability will be broken by technological breakthroughs that lead to
disequilibrium with many competing design” (Smith 2010 p. 164). Therefor is it often the
market situation and status quo which gives the answer to deploy a first-mover (Lead) or
follower strategy see more details below (Figure 22):

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Figure 22. Factors to consider between the First-mover or Follower strategies. Source:
http://infochachkie.com/fast-follower-iii/
Smith (2010) points out; “When it becomes clear that there is a high level of consumer
acceptance in the market or the number of competing designs begin to show signs of
diminishing, then and only then does the latecomer (follower) enter the market.” One
important radical innovation strategy is to build dominant design into your software product
or service. Product innovation is based on the combination of dominant design and
absorptive capacity (Smith 2010 p. 68-69). I will look into both first-mover and follower
strategy advantages and disadvantages in the case examples below:
2.9.2 Software innovation case example: Angry Birds
Do you know Angry Birds from Rovio Entertainment? I guess so. Either you love it or hate it.
Rovio’s product innovation is based on the combination of dominant design and absorptive
capacity (Smith 2010 p. 68-69). According to Nordström and Biström, a dominant design or
product configuration that comprises “the one that wins the allegiance of the marketplace,
the one that competitors and innovators must adhere to if they hope to command a
significant market following” (Smith 2010 p. 74). Angry Bird does have a new, unique and
dominant game design and usability. Dominant design; first by their consumer preferences
and its package of features (Funny, simplified cartoons, addictive storyline) and market
power (Smith 2010 p. 76). In addition must game producers like Rovio have a high absorptive
capacity to drive new innovations; both by internal learning and internal communication and
sharing skills, and to learn from external environment to build knowledge about new gaming

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trends, development software and coding processes to stay sharp in their field (Smith 2010,
p. 78). Rovio rapid reinvented Angry Birds into three new products/games to create new
markets; Angry Birds seasons, Angry Birds Rio and Angry Birds Space. Rovio still reinvent
their self, and continue to develop and launch new games.
2.9.3 Software innovation case example: World of Warcraft
“As our example for this type of innovation we can take the extremely popular massive
multi-player on-line game WoW. Here the technical innovations are concerned with 3D
programming of the virtual world, graphics, and handling multiple players over the net.
Other aspects of the game (role playing, questing, guilds, levels of skill acquisition, rewards
and the fantasy world background) are familiar from the stand-alone game world” (Rose
2010). Blizzard the maker of World of Warcraft is using successfully a follower strategy.
2.9.4 Software innovation case example: Facebook
“Facebook is far from being the first social networking software to become popular, but has
achieved (at the time of writing) levels of use which far outstrip its rivals, at least in certain
parts of Europe and the US. It supports social networking activities such as. It has an open
API, and anyone is allowed to develop applications for it, within its editorial guidelines. In
common with many web 2.0 applications it has massive utility for many users, but not the
kind of utility that they will necessarily pay for – so basic use of the service is free and the
revenue model is primarily based on advertising – which is attractive because of the many
users and access to segmented socio-economic groups” (Rose 2010). Facebook do have a
modern Freemium business model, with the the biggest revenue stream from ads (See figure
23 for details in the business model). Facebook is also successfully using a follower strategy.

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Facebook Business Model:
Figure 23. Business Model Fiddle. Source: http://bmfiddle.com/
Business model analysis - KIXEYE
The business model used by KIXEYE is called Free-to-Play games and is increasingly moving
out of the shadows. This kind of business model and Free price strategy increases within
many digital businesses. This really turns traditional economics and business models upside
down. Chris Anderson (2009) shares tons of insights about how to use Free as an innovation
and market differentiator in his book “The future of a Radical Price”. Usually with a Free
product a business get revenue from their Premium products after the Freemium model
(Anderson 2009), but this is not the case here: KIXEYE offer gamers access to the game and
the gaming itself for free, but making its revenue on micro-transaction; small purchases from

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a small segment of the overall audience. "Consumers are enjoying and embracing that way
of the business." It's making a lot of money in the process. Revenues in 2012 were above
$100 million – and CEO Will Harbin says he expects to double or triple that figure this year.
Average revenue per daily active user, he added, was 20 times higher than Zynga (reported
them to be 5.1 cents per day in the fourth quarter of 2012). KIXEYE isn't alone in the free-to-
play core gaming market. Riot Games with the game "League of Legends" boasts 32 million
active players each month. And Wargaming.net's with their game "World of Tanks" has 50
million registered users in 200 countries, who make an average of 3.5 million item purchases
each day. As for Will Harbin, he said he's not too worried about the EAs and other traditional
publishers taking a bite out of KIXEYE's user base. "These guys are too slow," Harbin said.
"They're leaving themselves exposed for someone (Followers with radical new business
model) to come in and steal their thunder. They're their own worst enemy." Source CNBC:
http://www.cnbc.com/id/100502237 Usually there are 3 models (Figure 24) of using Free
(Anderson 2009):
Figure 24. Picture source: http://alstonroadgroup.com/tag/free-the-future-of-a-radical-price/
But in the case of KIXEYE; A few people (Really are millions!) people subsidize free gamers
with their in-game micro-transactions; this is a radical new business model, innovated both
in the core and the edges (Waldman 2010). And they keep up their startup pace and
innovations with eight new games in 2013. (Source: http://blog.games.com/2013/03/29/KIXEYE-tome-
immortal-aren/).

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Successfully follower strategies
Angry Birds? (Rovio) Not the first (angry bird or) mobile game. World of Warcraft? (Blizzard
Entertainment) Not the first MMORPG. KIXEYE? Not the first MMORTS game. Facebook? Not
the first social network. Google? Not the first search engine. Groupon? Not the first deal site.
Amazon? Not the first online bookseller. Instagram? Not the first photo-processing App. Still,
Rovio Entertainment, Blizzard Entertainment and Facebook, as followers thrives, focusing on
continually creating new software products and services and continue to reinvent itself both
at the core and the edges.
2.9.5 Innovation Adoption Curve
The innovation adoption curve (Figure 25) of Rogers (Smith 2006) is a model that classifies
adopters of innovations into various categories, based on the idea that certain individuals
are inevitably more open to adoption than others.
Figure 25. Roger’s Innovation Adoption Curve.

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Rogers adopters characteristics are important because:
• A person's innovation adoption characteristic affects the rate of uptake of an innovation over time
• Different adopter groups buy into innovation for different reasons and have different expectations
• People who are innovators and early adopters are easier to convince to innovate
• Mainstream adopters (early and late majority) who make up 64 % of any population and these
adopters determine whether an innovative practice is embedded
• Mainstream adopters need different support structure from early adopters in terms of support,
different emphasis on technology and teaching practice.
• Innovators may require looser and less tightly controlled conditions, while mainstream adopters may
require more stability and support.
Innovators and early adopters make up only a small proportion of any population (2.5% are
innovators and early adopters about 13%) and there are not enough of them to have an
impact on embedding innovation in an organization (ibid). To cross the chasm between the
early adopters to the early majority can be difficult. Geoffrey A. Moore (Byers, Dorf & Nelson
2011 p. 270) argued that there is a gap that exists between the early adopters of any
technology and the mass market. He explained that many technologies initially get pulled
into the market by enthusiasts, but later fail to get wider adoption. One modern way of
jumping over the chasm is with usage of Freemium business model or free price tactics or to
create a passion brand such as KIXEYE, Angry Birds, World of Warcraft and Facebook.

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2.9.6 Creative disruption
Simon Waldman (2010) points out in his book “Creative Disruption” some tactics of how to
“shake up your business in a digital world”. The term “creative disruption” is a hybrid of
Joseph Schumpeter’s notion of “creative destruction” and Clayton Christensen’s work on
“disruptive innovation”. The defining characteristics by Waldman (2010) of his term
“creative disruption” is the emergence of new businesses either providing something
completely new for consumers (E.g. Google), or something traditional but in a radically
improved or more efficient way (E.g. Amazon or Skype). Waldman identifies four forces built
on Internet and digitalization that cause creative disruption (Waldman 2010 p.11):
• Entrepreneurs and new entrants
• Consumers needs and desires
• The proliferation of connected devices
• Economic volatility
A disrupted business has to do three things if it is to successfully reinvent itself and stay
sharp regarding competition: The first thing to do is to transform the core business. The real
challenge is to stick to what you do, but reinvent HOW you do it in a digital age. “This means
continuous innovation and efficiency seeking” (Waldman 2010 p. 12). Secondly; find big
adjacencies. Real resilience comes from using your company’s capabilities to find new
business areas that can offer secure growth (ibid). Third; innovate at the edges. “Everyone
loves to innovate, but in the context of a disrupted business, innovation – whether it is
organic or through corporate venturing and taking small stakes in innovative start-ups –
needs a clear focus. Its aim is pure and simple; either it is a way of creating the products,
series and processes that will allow you to transform yours core business, or it is a way of
finding your footing as yo search for a big adjacency. If it doesn’t fit any of those criteria, you
shouldn’t be doing it. The biggest flaw a company can make, is thinking that edge
innovations alone will be enough” (Waldman 2010 p. 13).

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2.9.7 Creating disruptive forces
If you succeed as a first-mover, you can earn good money. If you fail as a first-mover, you
probably lose even more. If you succeed as a follower, you often earn money faster, but
often for a shorter period. If you fail as a follower, chances to adapt from disruption or crisis
and handle change can be easier than for the first-mover. First-movers have managed to
break away from the competition. With few or no competitors, they have an opportunity to
capture market share in a new region or for a new product, establish a brand, build brand
loyalty and ensure that their brand becomes synonymous with the product. Hence digital
businesses, this in turn can form the basis for a sustainable short or long term competitive
advantage or temporary monopoly.
Followers on the other hand, can look at the first-mover’s position, then choose from a
variety of strategic options i.e.; price, quality, placement, user needs and behavior,
distribution platforms, and then develop their own strategy for eroding the first-movers
advantage. A sound innovation strategy will usually succeed, and a weak one will usually fail,
no matter who moves first. In my opinion; it doesn’t matter where you come in the line of
digital movers – the successful ones are the best at what they do in sum of: innovation and
marketing. Either you are a first-mover or follower leading the pack; you also need to find
out how you are going to stay ahead. “If an entrepreneur is going to make a disruptive
launch against an incumbent, they can normally count on the fact that they’ll have two or
three years to build their business up, before the incumbent will be willing to cannibalize
itself and compete. This is a double whammy for the incumbent. First, you have to say
goodbye to the barriers to entry that have protected you for so long. Next, you are letting the
new entrant create barriers to entry around themselves, because they know you can’t
compete with them head on for fear of cannibalization” (Waldman 2011 p. 109).

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3 Analyzing my survey
3.1 Limitations of the research
I am observant of the limitations of the research in this paper. Firstly, as I highlighted in the
introduction; the objectives of this research was to do deductive research coordinating
findings and insights in the curriculum with my qualitative research. The research survey was
meant only to identify some core themes not creating big data sets as with quantitative
research. The selection of the participant respondents were not quite optimal; I wanted
original to target only i.e. Software Product Managers, Software Team and Project
Managers, Software consultants, Chief Developers and Marketing Managers. Participants
covered almost all of these roles. More time to market my survey on LinkedIn would perhaps
had found even more target respondents with more diverse software innovation roles. I
created approximately 80 questions/statements ( distributed by 10 steps/parts, mapping
each to the defined research areas) combined with some open questions to add more value
in my web survey because I wanted to perform in-depth analysis around my seven identified
areas within “Software development and Innovation”. Some questions/statements are
excluded after some further thinking, they were not good enough designed regarding the
purpose of the research. I have therefor picked only the most relevant questions/statements
in addition to pick some good open answers with useful insights, and excluded the badly
constructed or they with no relevancy to the research purpose after adjusting the research
content. I have used i.e. Survey Monkey and Survey Gizmo before, but I wanted to include
learning’s about a new tool to this research. Therefor it was my first time using Enalyzer as
survey tool, and I think the user interface was difficult to learn the first time and the user
experience did not get full score from me. But after using time and effort to learn it I
managed to invite respondents in 2-3 rounds. One of the questions data entries was
corrupted. Enalyzer is built around 3 main setup functions: Questionnaire– Launch –
Analysis. The tool has good functions for sending reminders. The questionnaireand Launch
was medium hard to setup, and the Analysis part of the tool medium to hard to understand.
The positive ignition was that Enalyzer offered good flexibility to build many customized
reports each for the seven areas I designed, but when I added more respondents later on via
re-launch for new survey respondents, the system changed the order of the data entries.

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