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Summary of Key Design Principles

Scaling Edges

Achieving innovation at the institutional level is no trivial task. Executives that attempt large scale, internal change and transformation often face a great wall of resistance. The framework we describe provides executives in large companies with a framework for exacting major change via the pursuit of edge opportunities. In the final sections of this paper, we explore the three key levers of the framework (Focus, Leverage and Accelerate) in greater detail. The framework is further broken down into twelve key design principles to provide greater context and guidance on how to successfully achieve change through the pursuit of an edge.

Interact with the framework by clicking on the squares below.

Case studies

A new breed of leadership
Staff for passion before skills.
SDN measures up for SAP
Embrace double standards.
Innocentive: The community that’s
cleaning up corporate challenges
Look externally, not internally.
   
App-relief: Masses help clean the Gulf
Coast Oil Spill
Mobilize the passionate outside the firm.
Company command grows the right way
Reflect more to move faster.
SpineConnect: Using trust to sell tools
Move from dating to relationships.
   

Related links

Scaling Edges 2012
Download the complete report.
   
Scaling Edges 2012 webcast
Deloitte leaders discuss the report.
   
The Shift Index
Measuring the forces of long term change.
 
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Focus on edges, and not the core

  • Identify an edge based on four key characteristics:
    • Four key characteristics:

    Short-term

  • An edge requires minimal investment to initiate
  • An edge has the ability to grow the pie

    Long-term

  • An edge aligns with the long-term disruptive shifts in the market
  • An edge has the potential to transform the core

    Select an edge by:

  • Looking internally at existing initiatives that are on the edge
  • Scanning the broader marketplace for edge ideas
  • Avoiding large scale acquisitions
Learn more about focus

Staff for passion before skills

  • Identify the right “change agent” sponsor at the senior executive level who demonstrates courage and conviction for change
  • Create room for edge movement with minimal core obstruction
  • Staff the edge with passionate participants and ensure sufficient mass to generate and sustain momentum. Edge participants should:
    • Be naturally risk-seeking
    • Have a questing and connecting disposition
    • Be comfortable with failure and restarts

Learn more about focus | View case study

Break dependency on core IT

  • Harness new and disruptive technologies that do not require support from the core and amplify your ability to grow without minimal investment
    • Cloud computing
    • Big data analytics
    • Social software
  • Utilize social software and other networking platforms to broaden your view of potential edges
  • Channel social software tools to seek out and identify additional passionate participants to staff edge

Learn more about Focus

Embrace double standards

  • Develop metrics to monitor edge performance in the short-term (6-12 months) and progress towards long term vision.
  • Develop distinct metrics that are meaningful to the core

Learn about Focus | View case study

Look externally, not internally

  • Identify edge obstacles to scale:
    • Lack of capacity
    • Lack of expertise
    • Lack of resources
    • Conflict with core incentives
  • Create or select an “edge type” external ecosystems to address obstacles based on three key characteristics:
    • Level of engagement
    • Scope of interaction
    • Benefits to participants

Learn about Leverage | View case study

Starve the edge

  • Force edge self-sufficiency to look externally for support by minimizing core resources dedicated to the edge (VC Approach)
    • Limit financial resources
    • Set interim milestones
  • Empower edge team to engage external participants or ecosystems
  • Create incentives to engage external participants to increase their frequency of interaction

Learn about Leverage

Mobilize the passionate outside the firm

  • Utilize low-cost disruptive technologies to facilitate coordination with and mobilize other edges and rapidly expand the number of participants that interact with the ecosystem
  • Apply social software tools to access additional expertise and participants

Learn about Leverage | View case study

Measure progress of the ecosystem

  • Evaluate external ecosystem capabilities to overcome obstacle to scale
    • Network involvement
    • Technology usage
    • Performance levels
    • Costs to achieve

  • Learn about Leverage

Learn faster to move faster

  • Iterate in 6-12 month windows, not in 2-3 year cycles
  • Determine the minimal level of effort required to test the edge
  • Engage ecosystems, edge participants and customers to rapidly gather feedback

Learn about Accelerate

Reflect more to move faster

  • Stage edge initiatives to facilitate fast, iterative cycles
  • Anticipate, encourage and catalyze vertical and horizontal cascades to further test and progress edge thinking
  • Establish feedback loops with external ecosystem to drive rapid and continuous improvement

Learn about Accelerate | View case study

Move from dating to relationships

  • Create shared platforms and tools to shift ecosystem interactions from transactional to relational
  • Utilize disruptive approaches, to encourage collaboration among ecosystem participants
    • Reputation mechanisms
    • Big Data analysis
    • Shared space
    • Gamification
    • Employee dashboards

Learn about Accelerate | View case study

Focus on trajectory, not position

  • Assess participant learning and evaluate rate of performance improvement within the ecosystem
    • Collaborative problem-solving
    • Improvements to capabilities of all participants (partners and edge participants)

Learn about Accelerate

A New Breed of Leadership

Case study

 

When Wired Magazine Editor-in-Chief Chris Anderson had to find a president for his fledgling unmanned aerial vehicle business, commonly referred to as UAVs or Drones, it was not a litany of Stanford degrees, but an online video of a helicopter operated by Wii controller that moved Jordi Muñoz’s resume to the top of the stack. Relatively untrained (Muñoz attended one year of University in Mexico before moving to San Diego with his wife), and completely untested in the world of business, it was Muñoz’s passion for Drones and prominence in amateur Drone communities that won him the job.

In 2009, Anderson and Muñoz co-founded 3D Robotics – a robot manufacturing company with factories in San Diego, California and Bangkok, Thailand. In short order, the firm had grown to 11 staffers, and in March 2011, revenues hit over one hundred and sixty thousand dollars, up from a modest five thousand their first month. Still a small player in the space, 3D Robotics is generating buzz among large clients. 3D Robotics is able to innovate so quickly in large part because of its rich participation in knowledge flows, including a 15,000-member community of enthusiasts at DIY Drones centered on the open source coding to operate UAVs.

Though Muñoz did not have the traditional credentials to lead such a fast-growing venture, his passion for the work and access to rich flows of information made him the strongest candidate. This passion has carried over into his tenure at 3D Robotics. He and Anderson share a vision of a world where drones are household entities: “Our approach,” he said in one interview, “is the personal computer.” To achieve this, Muñoz has retained the questing and connecting dispositions that helped cultivate his boyhood fascination into a deep expertise.

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SDN Measures Up For SAP

Case study

 

In 1996, Germany’s SAP AG had more than 9,000 of its enterprise software systems installed at companies worldwide. As the number of applications grew, however, it was increasingly difficult to search for information and communicate across systems. To overcome this challenge, SAP developed an application called NetWeaver, which layered its existing enterprise applications on top of each other, enabling the applications to “communicate” more easily.

When SAP’s product development team began selling NetWeaver, it became apparent that it’s value in part depended on having a network of individuals that engaged with NetWeaver on an ongoing basis. SAP launched the SAP Developer Network (SDN) in 2005, which served as a platform for forums, wikis, videos, and blogs to enable developers to share knowledge about platforms and SAP products.

Since the success of SDN was so closely linked to the success of NetWeaver, it was imperative that leadership choose the correct metrics by which to evaluate SDN’s impact. Leadership began looking at items such as collaboration activity, membership, forum posts, and average response time to questions on the forum. It was clear, by the average response time of 17 minutes and that 85% of all discussions were closed, that SDN had an impact within the community.

While important to SDN leadership, these metrics did not easily translate to show impact on SAP’s core operations. To address this, SDN leaders also tracked metrics significant to the broader organization. For example, SDN demonstrated it could improve SAP’s traditional customer service needs, decreasing the number of troubleshooting complaints to service centers. Tracking these metrics helped demonstrate the success of SDN and the NetWeaver platform to project and executive leadership.

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Innocentive: The Community That’s Cleaning Up Corporate Challenges

Case study

 

In 2008, consumer goods giant Procter and Gamble (P&G) wanted to create a specialized dishwashing detergent that would indicate when the right amount of soap had been added to a sink full of dirty dishes. Researchers and developers within the organization were stumped by the challenge, and unsure of how to proceed, decided to look externally for support.

P&G posted the innovation challenge with the help of Innocentive, a small, unknown start-up based in Waltham, MA. Using Innocentive’s network platform, P&G described the problem and offered $30,000 to the individual who could come up with a solution. Soon, thanks to Innocentive’s network of experts, P&G had its answer. Italian chemist Giorgia Sgargetta successfully pioneered a dye which met P&G’s needs in her home laboratory. Sgargetta walked away with her “prize” of $30,000, and P&G had resolved its innovation challenge.

Innocentive started in 1998, when Alph Bingham and Aaron Schacht, then scientists at pharmaceutical giant Eli Lilly, were brainstorming how the growth of the Internet would affect business. In 2001, Eli Lilly launched Innocentive with seed funding, and since then, the site has posted more than 1,300 challenges across 40 disciplines to its solver community.

While the company’s mission has stayed consistent over the years, the operating model has evolved to allow for increased interactions between community participants. Initially, the majority of interactions were centrally coordinated, using singular, transactional challenges. Since its inception, however, Innocentive has worked to create new offerings including eRFP systems and Team Project Rooms to encourage collaboration. These improvements have allowed for more relationship-based, dynamic ecosystems to form. Rather than transact on one-off challenges, it is not uncommon for participants to collaborate repeatedly, forming virtual teams that learn together and develop in the long-run. By encouraging these deeper relationships, Innocentive has evolved to a dynamic solver community of 250,000 individuals from 200 countries.

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App-relief: Masses Help Clean The Gulf Coast Oil Spill

Case study

 

On April 20, 2010, the explosion of Deep Water Horizon caused the largest marine oil spill in history, releasing up to 4.9 million barrels of oil and causing economic and ecological distress in the Gulf Coast region. In the wake of this tragic event, oil seeped into fishing grounds, waterways, marshes, and beaches and a vast clean-up effort began.

Meanwhile, government agencies and civic organizations scrambled to deploy resources effectively across a vast spill zone. The government used hotlines and other outlets to report spill activity, but these methods were inaccurate and required a high level of effort for a citizen to file a report. Dissatisfied with its current means to track spill activity, the government needed to mobilize external support to fast-track its efforts. The solution: tap into the power of crowd sourcing.

The government used smartphone applications, such as SpillMap, to track the spill by enabling citizens to tag locations and submit content-rich incident reports with text, photos and videos. This geo-aware and open-source application tapped into the user mobile activity, allowing users to tag incidents in seconds, without logging in or waiting on hold. With more than 15,000 posts, SpillMap (and the corresponding Web site, spillmap.org) made real-time conditions publicly available to government agencies, civic organizations, and other interested parties.

Not only did the volume of incidents reported on SpillMap exceed the volume reported on many hotlines, but the geo-specific and image-rich posts often provided greater value, helping volunteer organizations prioritize and deploy resources, and allowing users all over the country to receive updates in real time. The success of Spillmap is just one example of how organizations can rapidly expand the number of participants in an ecosystem and get better results.

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Company Command Grows The Right Way

Case study

 

In 1999, Nate Allen, Tony Burgess and Pete Kilner reflected upon their experiences as Captains in the U.S. Army. The three recalled the challenges as new army leaders, with limited working knowledge about how to manage the 50-300 personnel within their company. Despite training at West Point Academy, many skills needed for the position were learned on-the-job.

To address this problem, Allen, Burgess and Kilner envisioned a site that would allow company commanders past and present to share knowledge, learning, and questions and develop new military leaders. The next year, they launched an online professional forum, called Company Command (CC).The story of Company Command offers several insights into how an edge can maximize and capture learning.

First, the Company Command founders staged an iterative approach to the site’s launch. The team began by hosting Company Command externally, on civilian servers. By beginning outside of the military, Company Command built trust with participants that it was not controlled by ‘the man.’ In 2002, the site was gifted to the U.S. Army. Company Command had scaled significantly and core leadership recognized the site’s value with the impending invasion of Iraq to help commanders learn and react to new types of urban warfare. In 2004, the team transitioned Company Command to the Army’s Single Sign On system on Department of Defense servers. Switching over to secure sign-on ensured that sensitive information could be shared, making the site even more valuable for participants.

In addition to staging, Company Command founders encouraged both horizontal and vertical cascades that resulted from the site’s launch. As the site grew in popularity, other levels recognized the value in a shared platform. In 2001, Platoon Leader was launched as an equivalent learning portal for junior leaders in the Army. Simultaneously, Company Command founders utilized its network of “point-men” to roll-out the launch horizontally across commanders in different arms of the military. These cascades allowed Company Command to test ideas and progress the team’s thinking.

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SpineConnect: Using Trust To Sell Tools

Case study

 

Most surgeons rely on peer feedback when selecting which medical devices to use. However, in 2000, Scott Capdeveille recognized that medical device manufactures were failing to address this need, and as a result, were struggling to effectively communicate the benefits of new products they introduced to surgeons.

To address this, Capdeveille founded SpineConnect, an online platform for spinal surgeons. SpineConnect served as an online community of practice where surgeons could discuss innovative procedures and new devices from manufacturers and share case studies of their use. Ultimately, these conversations allowed medical device manufacturers to tap into expert user-feedback on their products and gain an effective channel for marketing to the surgeons who use their products.

To date, SpineConnect has successfully signed on 1,400 (more than 40%) of certified spine surgeons in the United States, and 74% of these surgeons have indicated that suggestions from SpineConnect have altered their surgical plans. In addition, Syndicom has also launched TraumaConnect and ArthroplastyConnect, which connect trauma surgeons and orthopedic surgeons respectively. Syndicom’s share platforms allow users to build long-term relationships and engage in trust-based interactions, which in turn, create a great deal of value for all participants.

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