EXPEDIA GROUP TECHNOLOGY — INNOVATION
Innovation and the Engineering Leader
Shifting the needle on innovation scores
Here at Expedia Group™, we are trying to shift the needle on our internal innovation scores. I am an Engineering Manager and here is my thought process on that subject. If you are an Engineering Manager or other engineering leader and are looking for a way to improve that for your team, read on.
Peter Senge is one of my favourite business authors. Peter holds a belief that in a knowledge economy such as ours
Why does he think that and how does it help me improve my team’s innovation capacity?
Why is innovation the responsibility of engineering leadership?
If we ignore some side ventures, Expedia Group by and large makes money from thought. We, like other technology companies, are a knowledge organisation. In our case, our combined thoughts allow us to more efficiently facilitate travel than almost anybody else. Everything between thought and revenue is a complex system with many levers for leaders to tweak. That system of levers can be described by something called the Balanced ScoreCard (BSC) which is an example of a cybernetic controller for management. Apart from being the coolest name ever, a cybernetic controller is basically a way to measure and improve on a feedback cycle. In a knowledge organisation, the BSC is broken down into the following diagram.
The BSC tells an engineering leader that over time, investing in human capital through learning and development will lead to innovation. Innovation will lead to customer satisfaction and customer satisfaction will lead to financial benefits. Thereafter, it all loops back around for us to reinvest in human capital again.
So if we abstract away all the bugs in our code, all the hackers that try to take us down and all the people challenges we deal with, engineering leaders want to optimise this cycle to keep the organisation’s technology sustainable in today’s competitive marketplace. And it all starts with learning. This is why Peter Senge says learning faster is the only competitive advantage we can have. If this process isn’t working, we spend all our energy fruitlessly trying to remain relevant.
How do I improve my team’s innovation capacity?
Coming back down from the lofty heights, Peter’s framework gives me guidance on what to focus on in my long term strategy. I need to make sure I’m:
- Improving my human capital (a.k.a. my team). Team members always need to be learning. But this doesn’t mean doing a two-day course and ticking the box. We need to be systematically creative in how we encourage learning. My favourite framework for learning & development is OSF which you can read about here. For the creative part, Steven Johnson wrote a great book called “Where good ideas come from”. That book is packed with ideas on how to improve your human capital by doing things like “explore the adjacent possible”, “build liquid networks” or “trust slow hunches”.
- Creating an environment for innovation. This is a huge topic and everybody has their own pet “method” (ie: 20% time, hackathons, 2pm push-ups, SCAMPER sessions). My team works closely with AWS and we jointly organised and ran a DeepRacer event which was a fantastic and fun place to try out new technologies. I think the key for engineering leaders is to always fight to make sure there is space for that wonderful team of yours to get to this step.
- Make customers happy. I’ll admit it. This one isn’t my strength. I never understood it well and so I got myself out of it by moving to an internal technology service team. We still aim to keep customers happy but our feedback channels are much more fluid and open which makes things easier for me to understand! Ask someone on an external customer facing team about this one and stand back as they start talking about Lean, A/B Testing, the scientific method and any other currently popular methods.
- Close the feedback loop with financials. Knowing the financial (or business) value of the innovation and always describing the benefits of the full feedback loop is critical to continue to be able to invest back into the team. If learning isn’t linked to financial outcomes then it becomes easy for the benefits to be syphoned off to other initiatives and for your cybernetic controller to break. Remember, your boss is likely to be reporting into a quarterly process and your BSC is likely to be a multiple quarter process. Beware of different speeds! I have seen innovation linked to financials in many different ways. I’ve seen lengthy business cases elaborate enough to make any MBA lecturer proud, well detailed business model canvases that help express the business of an innovation, the more numerically minded of us preparing excel sheets with any combination of accounting measures such as ROI, ROA, IRR and I’ve once seen a very nice security vulnerability scorecard used to express business value in a notoriously difficult to communicate domain. The list goes on but I recommend you familiarise yourself with at least a few of these tools because there is (unfortunately) no one size fits all.
As engineering leaders, we are stewards of a key business asset — the generative power of dozens of smart people who work every day to make our products great. At Expedia Group, I keep the BSC in mind to help me remember to invest in that asset, my team, and link our innovations back to financial results. I am always expanding my toolkit in this area and I hope some of the tools I discussed in this article gets some ideas flowing for you too. Please let me know what you think and what techniques work for you in the responses section below!
