Innovation in Agile: 4 different approaches to stay competitive

Innovation is crucial for businesses in order to stay competitive and relevant in today’s fast-paced world. We already saw that in my previous article Why Should Agile Teams Make Time for Innovation.

However, finding time for innovation can be a challenge for Agile teams, who are often too focused on delivering working software quickly.

As a project manager, it’s essential to understand the different approaches for incorporating innovation into Agile teams’ workflows.

In this article, we’ll explore the following approaches:

  1. dedicating a portion of each sprint to innovation,
  2. creating a separate innovation team,
  3. creating ad hoc teams when the innovation need arises,
  4. and internal hackathons.

We’ll discuss the pros and cons of each approach and the factors to consider when deciding which one is right for your team. By the end of this article, I hope you’ll have a better understanding of the different options for making time for innovation. Let’s get started!

1. Timebox for innovation in every sprint

To facilitate activities oriented to innovation, teams often rely on the concept of timeboxing, for instance, a reservation of a specific period of time to plan and complete designated tasks.

This timeboxing is a common concept in Agile. The use of timeboxes enables teams to concentrate on innovation initiatives and provides opportunities to assess progress through feedback. Delivering small experiments within the timebox can be beneficial as well, because feedback can be used to guide future steps in the innovation process.

A balanced sense of urgency can also be another benefit of timeboxing the innovation activities. However, limiting the time available for exploring a solution may produce the opposite effect. It’s important to have an inspect&adapt mechanism to regulate the time dedicated to innovation: if it’s too short, it won’t be useful for learning purposes, and if it’s too long, there won’t be enough pressure on the team to deliver results that can be useful.

Some examples of timeboxing for innovation

Let me mention some examples of timeboxing for innovation:

  • The Innovation & Planning Iteration proposed by SAFe. Although in practice most of the organizations I know are using this timeboxing period only to prepare the delivery (closing remaining issues from the last sprint) or, best case scenario, to prepare the PI Planning. Unfortunately, I’ve never seen a team using this iteration to do any activity related to innovation. But I must admit that this framework could be very useful for agile teams to implement innovation.

Image of an example calendar for an Innovation and Planning iteration taken from SAFe site.

  • The Spikes proposed by XP (eXtreme Programming) are meant to figure out answers to tough technical or design problems. Typically, a pair of developers work on the spike for a week or two, after which it’s discarded if it doesn’t prove to be useful.

Spikes are temporary and not meant to be a permanent solution but instead aim to reduce the risk of technical difficulties and increase the reliability of project estimates. Probably, it’s more of a risk-reduction technique than an actual innovation approach.

  • During my time at a small startup, we implemented Innovation Fridays to combat monotony and foster a culture of exploration and learning. On a Friday morning (4h long) every month, developers worked on small experiments, and the following Friday they would present a demo of their work. Total time spent: 8h every month x 20 people approx.

The results were impressive! We came up with lots of experiments yielding ideas that could be offered to customers, improvements in productivity, and a generalized sense of professional growth throughout the company.

2. Creating a dedicated team for innovation

In some situations, companies may decide to create separate and dedicated teams focused on innovation activities. For example, when they want to create a new product or service, perhaps because their competitors are taking some advantage and they need to move faster than the actual organization is able to.

Having a dedicated team (and budget: don’t forget to give them enough resources!) is not that simple, because usually you can’t remove people from their current jobs. This may lead to hiring new people.

However, hiring is not always an option. That’s why it’s fairly common to have individuals in a so-called innovation team on a part-time basis. The typical expression that you may have often heard: “I’m 30% to this R&D team”. In my experience, this is not very effective as the message received is “this R&D is a second-class activity and may be postponed when needed”. Unfortunately, business as usual is a hungry animal who eats every slack available in the company unless you protect it.

Photo of developers and designers working together at Kaleidos in one of our PIWEEKs.

You should also consider the potential creation of silos as another issue when implementing dedicated teams. The separation between these dedicated teams and the rest of the organization must be carefully balanced to avoid causing more harm than good, particularly with regards to cultural clashes.

But I’ve seen some very good examples of creating a separate team, such as a big financial corporation who created an Innovation Area dedicated to exploring everything about Agile methods. They protected them and allowed them to have different processes and management rules. No dual-jobs were allowed. This gave the whole area (and the teams within) the focus and autonomy needed to create different products and give a competitive advantage.

3. Ad-hoc innovation teams when the need arises

You can set up ad-hoc teams swiftly to address specific innovation needs, and disband them just as quickly when the project is over. This can be seen as a mix of timeboxing and dedicated innovation teaming. The key here is the organization’s ability to be flexible enough to set up or dismantle teams as needed, while maintaining a clear scope for the experiment.

If you have urgency to create an MVP, the minimum viable version of a product, but can’t afford to stop your teams working on business as usual, and you cannot hire additional people either — this may be your approach. You can form a talented squad with all the necessary skills, and isolate them for a few days (or weeks, depending on the complexity of the challenge) until they deliver. Once the work is completed, the squad can return to their previous roles, while the organization gains a tangible product to learn from.

Be very careful with this approach because it may create stress on the innovation team, but also on the teams from which they were extracted, as their capacity and overall skills may have been reduced. Although it may be tempting to offer some form of reward or seen as fair compensation, IMO it’s crucial to ensure that it is not perceived as payment for the extra work.

Personally, I’d rather invite team members to volunteer and then acknowledge their contributions by providing rewards that they value, such as recognition, opportunities for professional development, or other non-monetary incentives.

4. Internal innovation hackathons

My favorite approach to innovation is, by far, internal hackathons. It’s the perfect formula that takes advantage of all the benefits of the previous approaches. But let’s start explaining what a hackathon is.

What is a hackathon?

A hackathon is an event that brings together people with different skills (developers, designers, etc) to collaborate and create digital products that can solve a particular challenge in a very short amount of time.

They are typically a day or a weekend long. It is often structured as a competition between teams of participants. Usually, hackathons focus on hacking social problems with technological solutions, or on exploring new technologies.

Photo of Demo Day with part of Kaleidos’ team during the special AI PIWEEK edition (April 2023).

Internal hackathons consist of applying the same formula within the boundaries of a company. They provide an opportunity for employees to work on new ideas and explore innovative solutions to problems that they might not have been able to do in their day-to-day work.

These events also facilitate cross-functional collaboration and can help to break down silos between departments, leading to increased communication and knowledge sharing. It’s also an excellent way to encourage employees to take risks, experiment new ideas, etc. Hackathons can help to create such an environment that ultimately can be replicated in other areas.

You can also identify and develop new talent, as they can showcase employees’ skills and potential.

And finally, internal hackathons can create solutions that ultimately may lead to cost savings, increased efficiency, and other business benefits.

Potential pitfalls of hackathons

At Kaleidos, they’ve been organizing hackathons for ten years! They’re called PIWEEKs (Personal Innovation Week) and happen twice a year. They’ve been so successful for the team that Taiga exists thanks to PIWEEK 2013! Kaleiders decided to come up with a better tool for managing their agile projects back then and that’s how Taiga’s journey began! And they just had a special PIWEEK edition focused on AI.

While internal hackathons have many potential benefits, there are also some potential pitfalls to consider. However, I’ll explain how Kaleidos, the company that created Taiga, neutralizes those pitfalls that can cause pain to the teams.

For example, they can be time-consuming and may take employees away from their responsibilities, which can impact productivity. At Kaleidos, hackathons happen at the same time twice every year and employees can’t take days off during that week. Planning in advance helps the teams organize their workload and sprints.

There is also an effort on organizing the event and all the logistics involved. Because you must consider reserving the space, having enough capacity in your WiFi, tables and chairs, catering, etc, but also having dedicated people to host the event and make it fun. At Kaleidos, we form a special rotating team of volunteers who are the organizing committee.

Of course, you shouldn’t expect that the work done during the hackathon can be immediately used as a production-ready product nor integrated into your infrastructure. They are only experimental artifacts and must be treated as such. At Kaleidos, PIWEEKs have served as the seed to come up with much larger and ambitious projects in the long run, such as Taiga and Penpot. These innovation weeks were key to Kaleidos as a company!

Regarding security, if you invite people from outside your company, you should be careful with the information that may be flowing around. Ask for advice to your cybersecurity department and make explicit the rules that must be followed by everyone.

And lastly, you should also take into account legal issues regarding the intellectual property of the work done.

Some links that you may find useful to organize your internal hackathon:

Which approach to innovation fits your organization’s needs?

In this article, I explored several approaches to innovation with special focus on Agile. The key is to evaluate which approach works best for your organization’s needs and culture: setting a designated timebox for innovation, creating dedicated innovation teams, establishing ad hoc innovation teams, or holding internal hackathons all have their advantages and disadvantages.

Ultimately, I don’t want to miss the importance of also choosing the individuals for innovation teams, as it involves dealing with uncertainty and demands a specific mindset, including qualities like proactivity, creativity, etc. The PST model presents a practical framework for identifying suitable candidates for innovation activities. Typically, those known as pioneers tend to excel in such circumstances as they feel more comfortable in environments of uncertainty and continuous challenges.

Choosing the right approach and people involved is about assessing the organization’s unique circumstances and choosing a strategy that aligns with its values and goals.