How Enterprise Software Companies Can Innovate: Feedback, Moonshots, and Hackathons

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If you’re the leader of an enterprise software company and “innovation” isn’t on the top of your list of priorities for 2019, I encourage you to reconsider.

While it might be tempting to dismiss innovation as little more than a buzzword, research clearly shows that companies who invest in innovation are more successful. Look no further than the paper in MIT Sloan Management Review, Are Innovative Companies Profitable, which highlights a strong correlation between how successful a company is at generating innovative ideas, and the speed at which the company grew.

For enterprise software companies, I’d argue that it’s particularly important to invest in innovation efforts now because the enterprise software market is growing so quickly. According to Research And Markets paper, Global Enterprise Software Market Outlook to 2022, the global enterprise software market is will have a 5.47% compound annual growth rate (CAGR) over the next few years. Gartner also estimates that the amount of money that IT will spend on enterprise software will grow in 2019 by at least 8 percent.



As the enterprise software market grows, so will competition between enterprise software vendors. The only way your company will be able to succeed is if you’re providing a superior product. And the only way you’ll be able to do that is if you use customer feedback, ideation, and other techniques to dramatically improve your existing solutions and build new ones.

There is a vast number of academic papers and opinion pieces available on how to kickstart innovation. From my decades of work with enterprise software companies, here are three areas I suggest focusing on first.

Optimize your process for sourcing, sorting, and prioritizing customer feedback

Aberdeen Group’s paper, The Business Value of Building a Best-in-Class VoC Program, offers a fascinating overview of the many benefits of listening to your customers, from increasing customer retention rates to generating significant increases in annual company revenue. This paper supports a point that I touched on in my previous post—your customers can give you incredibly valuable ideas on how to improve your products.

Over the years, I’ve found that the better you are at optimizing your process for collecting and analyzing this feedback, the more value you’ll realize from customer input. Whether you’re just putting in place a formal process for evaluating customer feedback at your enterprise software company, or optimizing your existing processes, here are three areas I’d suggest paying close attention to:

  • Sourcing feedback—Make the process of giving feedback as easy as possible for your customers. People shouldn’t have to search through endless menus to find the right place to give feedback. In addition to customer satisfaction surveys, one method of gathering customer insights that I’ve found works particularly well is putting a “send feedback” button on every screen of your application. If you can’t get this button onto the page without affecting the user experience, make sure the “send feedback” button is easily findable in your help menu.
  • Sorting feedback—One method I’ve found to be effective for sorting feedback is a three-tiered support feed, which puts feedback into three different buckets. First, you have the “general usability” bucket, which is typically feedback about small bugs that your QA team may have missed. Next, you have the feature and product request bucket for people who ask you if you’re considering adding features to a product or building an entirely new product that might help them do their jobs. Finally, you have what I like to call the “strong sentiment” bucket, with people telling you that they either love or hate your product but don’t give specific suggestions for product improvements.
  • Prioritizing feedback—For two of the three buckets, prioritization is simple. Feedback related to general usability can be addressed in the order that it is received. For people saying how much they love or hate your product, there is little to be done (although you may want to consider sharing particularly flattering feedback with your team).

For feature and product request feedback, you can put in place a scoring mechanism that takes into account factors like how many of your customers are asking for the same product update, and the rough estimate of the amount of engineering resources you would need to complete the request. But to make sure great ideas don’t slip through the cracks, it’s important to take the time during weekly or monthly product meetings to talk through the ideas that customers have given, and the potential merits and pitfalls of acting on their feedback. Through these discussions, you may find that there are opportunities to build new features that will address much of what a number of customers are requesting.



Give your engineers time to pursue moonshots and longer-term projects

Ideation techniques and approaches are well-documented (for those interested in reading more on this topic, Innovation Management’s piece, The 7 All-time Greatest Ideation Techniques, is a good place to start). But one issue that I find isn’t talked about enough is that companies simply don’t give the engineers the time they need to innovate.

Research published by the National Bureau of Economic Research offers a fascinating insight into the correlation between giving people free time and having innovation occur. If you’re the leader of an enterprise software company, you must understand that if your entire engineering team is spending 100% of their time on fixing short-term product issues, you simply won’t see your engineering team come up with truly breakthrough ideas.

Giving engineers the necessary time to ideate is much easier said than done. Engineering leaders are often under pressure to fix existing product bugs or respond to customer complaints. While some product emergencies can warrant a temporary reallocation of engineering resources, you still have to make a conscious effort to ensure that these cases are the exception rather than the norm.

If you’re not careful, you can find yourself in a position where you consistently have all of your engineers focused on short-term product patches or customer complaints. I’ve found that it’s when you’re experiencing these emergencies frequently that you actually want to do even more to make sure that your engineers aren’t solely focused on putting out short-term fires, and have the time they need to think of long-term solutions.

Implement structured hackathons

When thinking about ways to get your engineers together to brainstorm ideas, hackathons are a good place to start.

McKinsey’s 2015 paper, Demystifying the Hackathon, provides a thorough overview of the importance of hackathons, as well as steps for setting up an effective day-long hackathon. From my experience, the following points have been particularly helpful in running effective hackathons:



  • Provide structure: When you don’t provide structure, you end up with projects that might be cool, but not directly applicable to what your company does. If you create a one-pager for participants that gives them a broad focus, such as, “we want to improve product capabilities in one specific area,” you’ll find that the outputs are much more valuable.
  • Use the customer for inspiration: When deciding on the specific focus of your hackathon around, consider acting on one of your customer’s ideas. For instance, if you’d like to explore a solution to a product feature that many customers have requested, a hackathon can be a good jumping off point.
  • Give individuals time to work alone first: Research from Harvard Business Review shows that brainstorming is more effective when individuals have time to prepare before discussing their ideas. Consider giving people time to think through the focus of the hackathon before working together in a group.
  • Bring all your teams together: The best projects come out of people collaborating with colleagues who they haven’t had a chance to work with much, or at all. Ideally, your hackathon will involve people from product management, ops, engineering, and QA all working together.

When you listen to your customer, give your engineers time to ideate, and provide structured ways to innovate like hackathons, you’ll see great things happen at your enterprise software company.

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