Simplicity as a Driver for Agile Innovation

Exponential organizations (S. Ismail, M. Malone, Y. van Geest (2014) Exponential Organizations: Why New Organizations are Ten Times Better, Faster, and Cheaper than Yours (and What to Do About It), Diversion Publishing, ISBN 978-1626814233) are the most radical witnesses of simplicity-based agile innovation, colorfully illustrating what we mean by simplicity and agile innovation. Simplicity is not an absolute notion. Rather it strongly depends on the current circumstances, like the global and local state of the art and infrastructure, and the mindset of the addressed audience. Agile innovation is the exploitation of the current circumstances with comparatively little effort. It is characterized more by its sensitivity to new externally provided (infrastructural) potential and (commercial) impact than by the specific technology involved. Ismail et al. (S. Ismail, M. Malone, Y. van Geest(2014) Exponential Organizations: Why New Organizations are Ten Times Better, Faster, and Cheaper than Yours (and What to Do About It), Diversion Publishing, ISBN 978-1626814233) discuss a number of impressive success stories that typically heralded the end of some traditional business era. When in 2007, Nokia acquired the navigation and roadmap company Navteq for $8.1 billion with its marked leading road sensor technology, it aimed at regaining marked share as a dominating online traffic information provider. Essentially at the same time, Waze was founded. Its business idea exploits the ubiquitous GPS sensors in smartphones to crowdsource the collection of traffic information. In contrast to Nokia's own dedicated and highly expensive infrastructure, Waze had no infrastructural investments: It was simply built on globally available and steadily growing volunteer resources. A few years later, Nokia was sold to Microsoft for essentially the same price it paid for Navteq while Waze attracted 50 million users and was sold to Google for $1.1 billion. A posteriori, Nokia as an established company was too fixed in its mind set of resource ownership to recognize and react to the enormous potential of the new global infrastructure (One could say that Nokia missed the opportunity “this time,” as it stunningly succeeded to transform itself from a rubber boot producing company into a market leading mobile phone company only a decade earlier. We see, in particular, how quick is the rise and fall in case of reaping or missing innovation). In fact, established companies seem to be particularly weak in innovating their core business (C. M. Christensen. (1997) The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. Harvard Business Review Press, Boston, MA). In contrast, exponential organizations like Waze (and Facebook, Whatsapp, Snapchat, and many others) ideally exploit untapped potential and achieve staggering market success with only comparatively little technical effort and risk. In fact, (technologic) simplicity of what remains to be done is an important trait of their success: it allows them to easily fill a market niche of gigantic dimension, thanks to available global communication infrastructure. This illustrates the enormous potential impact of simplicity in the IT domain.