August 20th, 2013

APIs & Hackathons Solve the Innovator’s Dilemma

HackathonEach and every large enterprise began as a brand-new venture created by a few co-founders. The team was small, nimble and innovative enough to carve out a market leadership position through execution and differentiation. As the company grew from a few co-founders to 500 employees, 5,000 employees or 50,000 employees, its pace of delivering innovation slowed. Large companies such as Apple, Intuit and Facebook have continued to prove that this innovator’s dilemma is avoidable. For the rest of the Fortune 1000 – companies that don’t necessarily have access to the Silicon Valley magic – the trend in recent years has been to launch “innovation labs”.

One of the earliest examples of this was Bell Labs at Lucent, with many other enterprises now following suit, such as:

The question is: How will a small team within a large enterprise drive a cultural shift towards innovation and not get stifled by the old guard, which is simply stuck in old habits and processes? The solutions these innovation labs are bringing back to top executives almost invariably involve APIs and hackathons.

The first step is unlocking data via APIs. When a team of innovators at a large company is trying to achieve something disruptive and market-changing, the team members will need access to data from across the company. If they cannot get access, they will be delayed, get demoralized and often just give up and move on. When a company centralizes its APIs across all backend systems, it enables employees, partners and even external developers to build and innovate.

The companies with innovation labs mentioned above have also set up robust API platforms to enable innovation. Some APIs are only available to employees, some to partner companies and others are open to all software developers. The key concept is that they have removed the deadbolt locks on their data and replaced them with APIs that intelligently free those resources, auto-provisioning access based on who, how and what access is needed.

Opening up APIs enables innovation culture, increasing the pace of product design, creation and execution. Once these technology enablers are in place, enterprises can run internal and external hackathons to make developers aware of and inspired by what is now possible. These fast-paced competitions set goals to take creative ideas and turn them into prototypes or minimum viable products.

Hackathons are designed to help developers quickly try out new ideas and get instant feedback. This is similar to the iterative product development methodology described by Eric Reis in his book Lean Startup.  Some enterprises call it the migration from a linear process such as “waterfall” to more agile “scrum” or “customer-driven development” processes. Similarly, “DevOps” has been used to describe increased collaboration and communication between software development teams and IT operation teams.

This is how smart enterprises now solve the innovator’s dilemma. Product lines are reinvigorated and employees are inspired to be more entrepreneurial and productive.  Customers are getting products that take advantage of new technologies. Enablement through APIs alongside action through hackathons solves the dilemma and seeds continuous and disruptive innovation.

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