TD Ameritrade’s CIO argues that for every successful “like”-button-type concept that’s developed from a hackathon, a lot of work is put into ideas that never make it past the day of the event
One afternoon, as I was listening to an earnest presentation from a well-intentioned employee trying to solve one of our clients’ biggest pain points, I felt a familiar sinking feeling. This person has put a ton of work and heart into this, and as one of umpteen pitches today out of an internal hackathon, I knew it wasn’t going to go anywhere. Right then, I decided there must be a better way.
A CIO’s job is to make sure their company is using the latest technologies and innovative practices to bolster its competitive advantage and deliver the kinds of valuable experiences that its customers deserve. One of the richest resources available to do that job well is their team and the ideas they bring to work with them every day. But ideas without the proper support and distribution channels are essentially useless.
Born out of Silicon Valley startups, large-scale internal hackathons rose in popularity among corporations over the past decade as a way to tap into this store of ideas and crowdsource innovation. There have been countless examples showing the value of hackathons and their ability to generate substantial rewards. Tech behemoths such as Microsoft and Facebook have rolled out products and features that were generated from hackathons. Even at TD Ameritrade, we’ve had products come out of hackathons, such as Trade Finder, a tool that surfaces potential option trades based on client market expectations.
Hackathons have become de rigueur for any organization that wants to be perceived as innovative. But experience has taught me that it’s time for a new approach, one that incorporates three factors from the beginning that hackathons so often lack.
To really solve a problem, you have to know it intimately. Leaders typically rise to the top as a result of substantial experience in their field. While the fresh perspectives of a wider range of employees can be immensely helpful, I can’t tell you how many hackathon pitches I and my peers have heard for solutions that we’ve either thought of before or know would be impossible to implement due to factors the employee hasn’t considered.
For example, one idea that won our hackathon two years in a row — a really good idea — would have cost millions of dollars of investment, and not just in the most profitable areas of the business. This isn’t the team’s fault. They don’t have the experience we have, and we haven’t provided the education or context they need to put their time, effort, and thought into ideas that will work in a real-world scenario.
Hackathons are great at inspiring a big burst of energy and creative thinking, but you need a process for getting those ideas into your product road map for the exercise to be valuable. We had a team come up with a great idea for a way to speed up a three-day process to 30 minutes, but it wouldn’t have worked with any of our existing client systems and would have required a massive overhaul. So, we couldn’t do it. It’s certainly not impossible, but from what I’ve seen, it’s extremely difficult to transition from hackathon back to reality in a way that makes the most of the effort you and your team put in.
Hackathons in and of themselves do generally have structure. But what I’m referring to here is a structure that integrates innovation into your day-to-day, versus one day a year. If you’re going to infuse a culture of innovation throughout your organization, you’ll need to keep at it. Otherwise, it’s like going all out at the gym once a year in pursuit of physical fitness. You won’t see nearly the same results you would if you make it a consistent, regular habit.
Empowering or Discouraging?
For the past few years, TD Ameritrade held enterprise-wide hackathons (termed “thinkoffs” internally) as part of our effort to foster an internal culture of innovation. These hackathons weren’t my first rodeo, and like many tech leaders, I had a bit of a love-hate relationship with them. It’s invigorating to be able to give employees the freedom to think creatively and zoom out of their everyday work to consider the bigger picture of the problem(s) your company is trying to solve.
But the inevitable hit to money and time aside, the odds of success in a hackathon are stacked against the employee from the beginning. People get excited and put a lot of time and effort into an idea, but due to the structure of the event (so many ideas with such little time and attention paid to each one), few ideas rise to the top. Even fewer make it into implementation.
Think of it this way: For every runaway success that came out of a hackathon, such as Facebook’s “like” button, there are many more ideas that ended up shoved in a drawer, archived in a folder, or, worse, tossed in the trash bin. For the majority of participants, these events that are intended to empower can end up being pretty discouraging.
Exposing “Innovation Theater”
“Innovation theater,” a term originally coined by serial entrepreneur, professor, and innovation thought leader Steve Blank, describes the phenomenon of a company making a big show of driving innovation without putting much in the way of resources or substance behind it.
In many ways, hackathons are a perfect example of this. They’re highly visible, simple to understand, and seem like an easy way for a company to check the “innovative” box. But what a hackathon doesn’t do is deliver much tangible return for the business or for the employee. It’s a misstep if you realize that after it’s over, all you’ve done is divert resources away from the day-to-day of your business to focus on projects that will never reach your clients.
So what’s the alternative? At TD Ameritrade, we’re shifting toward a new model of driving innovation across our firm. We’re still keeping channels open at an enterprise-wide level through initiatives such as an online idea submission forum, which allows an employee or team to submit any new ideas for review by our technology innovation lab. This is offered year-round, whenever inspiration strikes.
We also hold a biannual event called “improve-a-ganza” that recognizes examples of creative problem-solving, holding up the work of teams thinking outside the box to make an impact at our firm with ideas that have made it into implementation. But perhaps most exciting, we’re adopting a new enterprise innovation framework to encourage collaborative innovation efforts among and between teams.
Establishing a New Model
Our new innovation framework takes a customer-centric view to identify areas of opportunity where there are market gaps and uses a test-and-learn, iteratively funded approach to uncover new ways to fill them. To keep our efforts aligned with our overall business strategy, we’ve established a group of leaders across our organization to serve as an investment board to create an “innovation thesis.” This is a broad statement about where we are as a business, where we think the world is going, and how we are going to innovate in response.
This board then acts as an investor much like a venture capitalist, using the innovation thesis to direct resources and funding to facilitate the discoveries and experimentation of dedicated teams across the organization. With the business sponsoring the exploratory work from the beginning, we’re ensuring that ideas don’t wind up homeless, looking for sponsorship after work has already been done. We’re still thinking big and involving teams from across the firm, but we’re strategically pursuing areas of opportunity where we are uniquely qualified to develop innovative solutions.
As we venture into a post-hackathon world and I reflect on my experiences, I feel it’s important for every company to move toward a model of meaningful innovation where employees are heard and encouraged every day of the year to contribute to the future of the business. Doing the heavy lifting behind the scenes may not be as sexy from the outside, but it’s ultimately a much better way to ensure your company’s approach to innovation isn’t just for show.
Source: via Medium website by Author Vijay Sankaran is the CIO of TD Ameritrade