How Telefónica leverages agile to accelerate innovation?
Agile is a response to a more traditional waterfall model where all phases of product development take place in sequence, one after another, like a waterfall. On the other hand, agile provides a cyclic model where the sequential approach is replaced by an incremental, iterative one. This provides the ability to rapidly respond to change in order to succeed in an uncertain and turbulent environment. While agile was originally developed and used for software development, in the last years, this iterative methodology, spread across numerous different industries, like telecommunications, automotive, fast moving consumer goods, etc.
Therefore, it is not surprising that in 2006, when Telefónica I+D introduced the Agile Methodology, it did it so in the software development. It wasn’t until 2011, that Telefónica I+D expanded agile across their product development in order to support its shift from traditional to digital telecommunication company. Agile was the perfect fit to introduce new ways of creating value, shorten development cycles and increase competitive advantage.
In Telefónica I+D, agile does not stand on its own; it is a part of a bigger approach that is derived from “The Startup Owner’s Manual”, written by Steve Blank. Therefore, the approached to product development consists of three key elements: Business Model Canvas, Customer Development and Agile Development.
We have written about the business model practice in Telefónica in one of our previous blogs (How Telefónica uses Business Model Canvas?) so today we peek into the agile development practice.
As mentioned earlier, agile uses short iterations to quickly develop, build and assess a workable version of the solutions. This process is called Scrum and is in many aspects very similar to the Build-Measure-Learn feedback loop from Lean Startup approach as described by Eric Ries. By developing products iteratively and incrementally, teams can drastically reduce wasted time and resources. This shortens the delivery time between each version of the so-called minimum viable product (MVP) ensuring this latter can be quickly tested in order to obtain customer’s feedback and act upon it. Let’s have a look at an example of this iterative development.
Consider the first loop as the initial development cycle fueled by initial requirements and insights gathered through the Customer Development element (see the previous figure). As these are analyzed, first designs developed, and MVPs built, tests are conducted and results evaluated. This triggers the next development cycle, which starts-off by evaluated customer feedback, before entering the second analysis and design steps.
Using agile development in hand with business model canvas and customer development, Telefónica was able to accelerate the innovation cycles by 2.6 times through. This means Telefónica typically figures out if a project or product makes sense at least 2.6 times sooner than before. Now, this is a result that lifted quite some eyebrows.
Telefonica’s Best Practices are presented and described in more than 35 pages in the Lean Product Development Best Practices book. Telefonica’s chapter is only one out of the 10 chapters presenting the real-world application of lean product development in multinational companies.
The hard copy of the book with the 10 cases is available for only 74.99 EUR.
Telefonica’s Lean Product Development case is available digitally free of charge to our members
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ABOUT THE AUTHOR(S)
Lean Analytics Association
Matic has over 5 years of experience in working with global organizations from various industrial sectors, either leading or supporting the development and introduction of bespoke lean innovation and new product development solutions. Over the past years, Matic led the development of a framework to enable better, faster and more integrated innovation across the entire value chain, empowering companies to maximize their innovation capability and deliver truly customer-centric solutions, while minimizing the risk of market failure.
Matic is a certified Service Design Thinking Facilitator, and the creator of the Set-Based Integrated Innovation Business Game co-developed with a multinational Swiss company. He completed his Master’s degree in Global Product Development and Management at Cranfield University in 2012.
In 2017 Matic co-authored the Lean Product Development Best Practices book, and several journal and conference publications. He regularly appears as a speaker at various lean, product development and innovation conferences.
Lean Analytics Association
Dr Flores has over 20 years of experience collaborating as an internal or external consultant in different manufacturing and services organizations, leading several initiatives related to Lean Thinking, Business Process Improvement, Six Sigma, Supply Chain, Change Management, Open Innovation, Digital Transformation and Human Centered Service Design; providing also training and coaching.
She is co-founder and president of the Lean Analytics Association (LAA) and visiting scholar at the College of Management of the Ecole Polytechnique Fédérale de Lausanne (EPFL) in Switzerland.
She carried out her Post-doc at EPFL collaborating at the Lean Product and Process (LeanPPD) FP7 European project from 2009 to 2013. She completed her PhD in 2006 at the Politecnico di Milano studying Open Innovation Models to enable Industry-University collaboration for innovation. She obtained her Master’s Degree in Manufacturing Systems in 1999 and a Bachelor’s Degree in Mechanical Engineering from Monterrey Tec (ITESM) in 1996.
Susana is currently the Head of Innovation Portfolio at Product Innovation in Telefónica. After fourteen years working on different areas at Telefónica, in the last five years her career has focused on innovation and strategy. She has been also a member of the core team that defined the current innovation model at Telefónica I+D. In her current role, she drives the innovation process, the key tool for managing innovation projects funnel; and runs the innovation calls, where employees submit their ideas (these calls are thus the main source of projects for the innovation funnel). She has co-authored the Lean Elephants report, describing the experience and learnings of applying Lean Startup to innovation projects at Telefónica since 2012.
Susana holds a M. Eng. in Telecommunication Engineering and an Executive MBA from IE Business School. And is also currently Associate Professor of Lean Enterprise at the IE Business School.
MARÍA ELENA ORDÓÑEZ
Coordinator of the CONFyE Center at IAE Business School
Dr. Ordóñez is responsible of the Research Center for Family-Work Balance (CONFyE) leading projects integrated to the strategy of the IAE Business School from the Universidad Austral in Argentina. She joined the Lean Analytics Association (LAA) in 2015 as a Sr. Researcher investigating how companies implement lean thinking in the innovation process. Dr. Ordóñez collaborated with Airbus and Telefonica in Spain and supported the organization of the Lean Innovation Forum which took place in Lausanne, Switzerland.
She has over 15 years of experience working in different organizations and her research interests are: Innovation, Change Management, Corporate Social Responsibility and Work-Life Balance.
Maria Elena obtained her PhD in Business Administration from University of Navarra in 2014 (Spain) an MBA from IAE Business School in 2004 and Bachelor’s Degree as a Public Accountant from the National University of Córdoba (Argentina).