I still don't have time to innovate

I'm too busy doing business analysis

Elizabeth Larson, CBAP, CSM, PMI-PBA, PMP

Richard Larson, CBAP, PMI-PBA, PMP

Co-Principals, Watermark Learning, Inc.

Everyone seems to be talking about the importance of organizational innovation, as well as what it means for practitioners of business analysis. Are business analysis and innovation even compatible? This paper answers this question affirmatively—yes, they are. But what is innovation and how can business analysis practitioners help organizations innovate? Innovation may include process improvement as some have suggested. It also may include doing root cause analysis to identify problems and then finding solutions to those problems as others have claimed. And it can certainly include doing projects agilely, changing the features of the product being built as needs become known.

Although each of these is an important factor in developing creative solutions, each by itself is probably not enough. Innovation requires us not only to spot all manner of opportunities, but also to use our influencing skills to convince the organization to seize them.

What is Business Analysis?

There are many definitions of business analysis, most of which include the practice of identifying business needs and recommending relevant solutions that add value to the organization. For this paper we will use PMI's Business Analysis for Practitioners: A Practice Guide (2015, p. 3):

“The application of knowledge, skills, tools, and techniques to:

  • Determine problems and identify business needs;
  • Identify and recommend viable solutions for meeting those needs;
  • Elicit, document, and manage stakeholder requirements to meet business and project objectives;
  • Facilitate the project team with the successful implementation of the product, service, or end result of the project or program.

In short business analysis is the set of activities performed to identify business needs and recommend relevant solutions; and to elicit, document, and manage requirements.”

This definition shows the complexity of the practice of business analysis and why it can seem overwhelming to those new to the discipline and why performing all these activities may seem like there is not time to even think about innovation. So, we hear comments like:

  • “Are you kidding me?! It's a full-time job eliciting and documenting requirements, to say nothing about handling the thousands of times the stakeholders change their minds. And you expect me to even think about innovation?”
  • “Creativity takes time and I'm too busy trying to meet project deadlines to take the time for creative thinking.”
  • “It's not my job. I can't imagine what the executives would say if I walked in there and told them about some crazy new idea I had.”

We'll explore the validity of these arguments throughout the paper.

So What Is Innovation, Anyway?

Although the dictionary definition of innovation is “something new or novel” (merriam-webster.com), it is interpreted differently by different people. To some it means any change, whether large and affecting many areas of the organization or small, incremental changes with small improvements. It has been called an “art form that can come slowly over time with improvements made piece by piece, or in a flash” (Darter, 2015, para 1). In their analysis of what innovation means, based on definitions provided by several experts, Hitendra Patel and Chuck Frey suggest that innovation must deliver positive change and that “innovation also implies a value system which seeks to derive a positive outcome from the inventive act” (Patel & Frey, n.d., para 9).

Another definition of innovation describes the essence of why so many organizations desperately want to innovate. It defines innovation as “the process of translating an idea or invention into goods/services that create value for which a customer will pay” (business dictionary.com).

There are some important concepts embedded in this definition.

  • Innovation, while it involves change, is not synonymous with change. Innovation is described as a process. We know that processes take inputs and follow a series of steps that help transform those inputs into outputs. The inputs in this case are ideas and/or inventions.
  • Processes create outputs, but not all outputs create value. Innovation requires that value is created.
  • When we think of innovation, we think of transformation. Desktop computing transformed simple data processing into such things as spreadsheets and word processing, creating huge productivity gains for organizations. Apple transformed how people interact with computers, helping to take programming out of the hands of nerds and make it easy and fun for people to use their computers. Google transformed data bases into data mines and did so in a way that most people were willing to give up some aspects of their privacy for convenience.
  • Not only do goods and services have to be new and valuable, but also customers have to recognize that value and be willing to make a financial commitment in exchange for the valued output.

A short history of innovation

According to Emma Green, innovation was not always viewed positively and innovative ideas were not only viewed skeptically, but could be perceived as heresy. In her article she explains that the original emphasis was on “renewal,” not something new and creative (Green, 2013, para 3). Green goes on to explain that during the Industrial Revolution of the 19th century, the emphasis was on invention (Green, 2013, para 3).

During the 20th century, Joseph Schumpeter introduced the idea of “creative destruction…driven by technological innovation.” (Wikipedia, para 1). He coined the term “entrepreneurial spirit” and discussed entrepreneurship in depth. He also distinguished invention from innovation, the former having no thought for “economic import” and the latter having the ability to turn inventions into a new business model. He argued that economic change revolves around innovation, entrepreneurial activities, and market power (Wikipedia, para. labeled Entrepreneurship and Innovation).

Today we often think of innovation as something radically new and different, and we hear it associated with the word disruption. We will discuss innovation and disruption later in the paper.

Why Innovate?

Few organizations can exist for long without change. They introduce new products, services, and ways of doing things and have done so throughout time. As new technology was developed, organizations found ways to take advantage of it in order to reduce the time to market, to comply with new regulations, to provide ways to help their customers, and for a variety of other reasons. With change, of course, some workers have welcomed it while others have resisted it. Some have been champions of change and others champions of routine, often citing the old adage, “if it ain't broke, don't fix it.”

Despite this common negative reaction to innovation, it is becoming increasingly more important to companies. Innovation can help build strong relationships and loyalty with customers, despite the disruption to the organization's processes and those whose daily jobs are affected by new and creative ways of doing things.

Investors view innovation positively. Ewen Cameron Watt in his Financial Times article discusses the importance of innovation to shareholders and investors, particularly as it saves labor costs. Watts says:

It becomes more important to invest in companies that can weather the disruptive effects of innovation and harvest its benefits… Innovation can erode an important competitive advantage of emerging markets: cheap labour. Businesses faced with rising wages can automate or move to cheaper locations… Companies are reshoring, lured by cheap energy and proximity to end markets… In a nutshell: if you lose your labour cost advantage, you had better come up with something else. (Watt, 2014, para 5)

And that something is Innovation.

Why organizations often struggle with innovation

There are many reasons why organizations struggle with innovation. Here are a few reasons for this struggle:

  • Organizational size. Studies have shown that once companies get big, they become less risk-tolerant and therefore less willing to become innovative. In a Forbes article George Deeb wrote, “The bigger the company gets, the more risk averse it gets, regardless of whether or not the company had innovation wired into its original DNA as a high-flying startup from years before.” (Deeb, 2014).
  • Organizational culture. Some organizations find it difficult to change their culture, but such a change is needed for innovation to be cultivated. If organizations want to be innovative, their culture needs to support these things:
    • A culture of collaboration. Many organizations still operate within a hierarchical structure. The reporting structure is hierarchical, with staff reporting to managers, who in term report to other managers. Communications are hierarchical, flowing down from the executives to the workers. Decision-making is hierarchical, coming from the executives and managers. Innovation requires a culture of collaboration, where decisions can be made by a team of people and where leaders can emerge from anywhere to solve problems based on their expertise and leadership skills, rather than their position in the organization.
    • A culture that supports agility. Some organizations recognized that there is a relationship between being more agile and being innovative. However, they are not quite sure how to become either. Some of these organizations give lip service to wanting to be more agile. They want to have more flexible, less bureaucratic processes in order to produce products and services quickly. Some have mandated that all projects be agile, without understanding the commitment required to make agile work. The commitment to a culture of collaboration, as well as such things as dedicated teams and business stakeholders, all needed for successful agile projects, is often neglected.
    • A culture that supports creativity and the associated “think time.” Creating new products and processes cannot occur in a vacuum, nor can it occur when we are so busy thinking about our project deadlines, the conflict among our team members, and the changing needs of our business stakeholders that we do not have time to let new ideas incubate. As Nancy Napier writes, “Creativity takes time. Time for an idea approach and let your mind think about it from different angles. Time to notice disparate dots and then figure out different ways they might connect.” (Napier, 2015, para 2).
      • We often hear of proverbial “aha” moments happening when our minds are free to wander, as when we are cleaning the kitchen sink. Often cited as a famous example of this phenomenon is the story of the ancient Greek Archimedes, who in trying to solve a problem relating to weighing irregular objects, stepped into a bathtub, and although he did not step into the bath with the intention of solving his problem, the solution came to him as he realized irregular objects could be weighed by seeing how much water was displaced. His famous cry, “Eureka—I found it!” has come to be known as the “eureka/aha moment.”
      • Although it is unlikely that organizations will set up public baths to promote Eureka moments, some are setting up innovation labs to encourage creativity. Companies like Google, Wells Fargo, Harvard University, and Nordstrom have set up these labs to encourage new ways of thinking.
    • Influencing those who do not report to us. When we ask for the barriers to influencing, we often hear that the organization's culture is not conducive to influencing. Yet we cannot have innovation with a collaborative, team-based environment without support for distributed leadership and influence. Each component of The Influencing Formula (Larson & Larson, 2012, p. 5) is integral to the concept of innovation.
      • Building Trust. It is difficult to be innovative if we are not collaborative. Collaboration by its nature is built on trust. Innovation occurs best when everyone works well in a team environment, sharing the rewards and working towards a common goal. It takes time to build trust, so it is not uncommon for individuals to focus more on getting tasks done than with the effort it takes to work on the relationships needed to build trust.
      • Preparation. If we want to be influential, we need to do our homework. As business analysis practitioners, we cannot effectively influence if we offer new ideas without having ensured that these ideas solve real business problems. We need to ensure that we as well as those that we are influencing fully understand the impact of this innovative idea to the day-to-day operations of those who will be impacted by this new way of doing things.
      • Courage. As business analysis practitioners, our job is to offer or recommend new ideas. It will take courage for us to do so because not everyone whom we are trying to influence will be enthusiastic about change. Many in organizations have a vested interest in the current way of doing things.
  • Stability versus change. There are a myriad of books and articles on the benefits of the disruption that comes from introducing innovation. However, not much is written on some of the negative impacts. Too much disruption causes so much staff angst that it can actually lead to lower productivity. Even those of us who welcome change, who constantly propose new solutions and processes, who say “give us the right tools and we're happy to change how we do things,” and who bristle at the words “but we've always done it that way,” find it difficult to live with too much change. Even if we, and our organizations, could absorb disruptive change, we need to be sure that our customers come along with us through the changes. We don't want to lose them and if there is too much change too quickly, we run that risk. “Disruption is a theory of change founded on panic, anxiety, and shaky evidence” (Lepore, 2014).
  • Certainty and low-risk versus speed and flexibility. Both speed and flexibility, needed ingredients for successful innovation and good customer service, require that organizations engage in a certain amount of risk-taking. When we rush to produce new products and services, we give up the certainty that taking our time provides. Getting complete requirements, thorough testing, and consensus all give way to getting new products and services to market quickly. Many organizations and industries can choose speed over risk; others cannot. For example, heavily regulated industries, those where public safely has to be the main concern, most likely will not take those risks.
    • Providing effective customer service requires the ability to react to our customers’ needs – quickly. It requires us to be flexible; to have the organization focused on customer needs rather than relying on established processes. However, there are times when having everyone handle all situations the same way is the best choice, although such ways of doing business leave us open to the charge of being “bureaucratic.” Nevertheless, there are times when reducing the organization's risk is the best alternative. For example, should a teller withdraw funds from an account with insufficient funds at a bank when a customer demands such funds? The process of going to a supervisor for such exceptions might be a better choice than simply handing out the money. When possible, we should strive for a balance between being totally flexible and putting the organization at risk. In our banking example above, ideally the supervisor handling the exception could find a solution that will find a way to meet both the customer's and the organization's needs.
  • Needs of workers versus needs of shareholders and executives. Ewen Cameron Watt points out that while venture capitalists love innovation, it is not always good for the end worker. He says that on the one hand innovation suppresses wages and prices, making companies more profitable and appealing to the shareholders and executives whose bonuses are tied to profitability. On the other hand innovation hurts employment. At some point there has to be a balance between these two dichotomies. And, indeed, Watts points out a trend to reshoring to take advantage of lower energy costs. In other words companies are trading higher salaries for reduced costs related to the actual production of the goods. (Watts, 2014, para 6).

Exhibit 1 provides a summary of these reasons why organizations struggle with innovation.

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Exhibit 1 – Summary of why organizations struggle with innovation.

Relationship to between business analysis and innovation

Why Business Analysis Takes So Much Time

Is there really no time to innovate? Is business analysis completely separate from innovation? By definition, business analysis includes, among other things, project work. As easy as the definition of business analysis makes the work seem, it is anything but easy. Eliciting, documenting, and managing requirements all have complexities that make the activities difficult to learn and hard to do. Business analysis is fraught with ambiguities, so those who want a clear path through the activities will find the work frustrating. In addition, competencies such as influencing, negotiating, conflict management, and critical thinking are required, and all take time. Below are a few examples that illustrate some of these complexities. These examples also illustrate the need to acknowledge that these important competencies are an integral part of the project, take time to complete, and need to be included in the project management plan, rather than being viewed as an afterthought. If these activities are not given enough time, there is a high risk that the project will fail.

Exhibit 2 provides examples of common business analysis situations and the skills required to handle them. These types of situations are time-consuming.

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Exhibit 2: Situations illustrating why business analysis takes time.

Why innovators and business analysis practitioners need to connect the dots

The definition of innovation has many similarities to the definition of business analysis. Both involve bringing positive change to the organization. Both involve transforming ideas into new processes, products, and services that create value for the organization. And both sound far easier than they are.

There are many similar skills that are required to innovate and to do business analysis. One of the most important ones, however, is the need to connect the dots. In an article that compiled several famous quotes on innovation, Steve Jobs was quoted as saying:

You can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something—your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life. (Brier, para 1)

Effective business analysis practitioners routinely use their ability to connect the dots. They are able to see patterns that others cannot. They can use their knowledge and experience, what some call intuition or their gut, to predict what will happen in new situations. That is, they can use past situations to help wade through the issues and then recommend solutions that ensure organizations will achieve a positive outcome.

The ability for innovators and business analysts to use their past experience to connect the dots requires the ability to synthesize lots of information and make sense of it all. It also requires explaining the results to the sponsors, business owners, business and technical stakeholders, investors, and others in a way that not only makes sense, but influences them to decide to move forward with the new solution.

How business analysis practitioners can help organizations innovate

As we have shown, there are many similarities between innovation and business analysis, including the nature of the work and the skills needed for both. Given these similarities and given the importance of innovation to organizations today, it's a wonder that more organizations don't take advantage of experienced business analysts with the skills that will help them to innovate. To do so requires an acknowledgement that business analysis is more than getting the requirements for a given solution, that it goes beyond project work, and that it can help organizations on an enterprise-wide level.

Here are three important ways that business analysis can help organizations innovate:

  • Becoming internal entrepreneurs, or intrapreneurs. More and more organizations want to be innovative, and they will need to become more entrepreneurial as they seek truly innovative and creative solutions to their business problems, which are becoming increasingly more complex. Some are turning to external entrepreneurs to take the organization in new directions. Others are turning to internal resources to act as entrepreneurs, or what we call intrapreneurs to help them become innovative. The intrapreneur is the perfect position for an experienced business analyst (BA).
    • Both authors were intrapreneurs early in their careers. When they became business analysts, they found that their skills were completely transferable. The time to get up to speed was negligible. The opposite is true as well. Today organizations will find that the skills of experienced BAs are equally transferrable to being intrapreneurs.
  • Using tried and true business analysis skills. To be more innovative, some organizations are introducing products with limited functionality to get early customer reaction and feedback. BAs can use tried and true elicitation techniques, such as conducting focus group sessions. This technique brings customers and potential customers together to elicit their ideas on a new product, service, or way of doing things.
    • BAs, then, can get early customer feedback and bring it back to the development teams so they can produce the new product incrementally. By encouraging adaptive implementations of new products and services, organizations can innovate almost on a just-in-time basis without risking customer rejection of the new product.
  • Helping organizations through the change. Innovation usually causes disruption for the organization. Business analysis is about helping organizations change, and BAs can, and need, to help organizations through this disruption. They will first need to help the organizations prepare for the change. They will then need to work with affected operational areas to help them understand what the change means for them. That is, they can help operational workers understand the difference between their current world and how it will be different going forward.

Summary

In this paper we have discussed the definitions of innovation and business analysis. We have shown how they relate to each other and the skills needed for both. We have provided examples on the complexity of business analysis and why resolving difficult project issues take so much time. So, can business analysis practitioners be innovators? Most certainly since business analysis is all about recommending viable solutions that help meet business objectives. Ah, but do business analysis practitioners have time to innovate? We are suggesting that some business analysis resources be assigned as intrapreneurs to work on innovation. We foresee more and more organizations taking advantage of the business analysis skillset and recognizing the value of having these resources help them branch out into new, innovative directions.

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Pater, H., & Frey C. (n.d.). How do you define innovation and make it practical and saleable to senior management? Retrieved from http://www.innovationmanagement.se/imtool-articles/how-do-you-define-innovation-and-make-it-practical-and-saleable-to-senior-management/

Project Management Institute. (2015). Business analysis for practitioners: A practice guide. Newton Square, PA, Author.

Schumpeter on the economics of innovation and the development of capitalism. (n.d.). In Wikipedia. Retrieved from https://en.wikipedia.org/wiki/Creative_destructions.

Watt, E. (2014, November 5). Why innovation matters to investors. Financial Times. Retrieved from http://www.ft.com/cms/s/0/e2a7adfa-4fba-11e4-a0a4-00144feab7de.html#axzz3fJhjBfdT

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2015, Elizabeth Larson and Richard Larson
Originally published as a part of the 2015 PMI Global Congress Proceedings – Orlando, FL, USA

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