06 March 2013

Innovation Risks

Instead of responding to "innovation" as a buzzword, I want to make sure that I always just think about innovation in terms of social changes, large or small.

As software people, we probably tend to be much more change-tolerant on average than many people in the non-software population -- I believe that's one reason why we gravitate toward the soft-ware part of things.

But there are particular kinds of innovation risk, I think:
1) effort investment risk
2) future opportunity risk
3) legacy replacement risk
4) replacement rate risk

Business people often talk about the expected ROI of a particular proposal.  That is what I'd categorize under the category of #1.  If I expect a return, it'd better be worth the effort I put into it.  This is standard stuff for software developers.  We do estimates to establish expected ROI, we do the work and see the results.

What it comes down to the categories of risk #2 and #3, I thing there is a wide variation in risk tolerance in software developers.  Often this is because of variation in our perception of value, or varied backgrounds, and even in similar backgrounds, variation in our recall of the hard lessons of experience.  Some of the most experienced among us look farther ahead, and therefore avoid certain risks because they look similar to times when we got bitten in the past.

In addition, it seems that #4 is different than #3, because even though some people may be willing to absorb the cost of a significant change once or twice, they may not be willing to continue to absorb changes of the same magnitude on the same frequency.

I think that common responses to these different kinds of risk are as follows:
1) proper planning (mitigates effort investment risk)
2) proper deliberation (mitigates future opportunity risk by measuring which opportunity to chase)
3) caution, loss aversion (enhances legacy replacement risk by clouding judgement)
4) apathy, rejection (enhances replacement rate risk by inhibiting trust and hurting relationships)

The difference is that most humans have a disproportionate amount of loss aversion for things they perceive that they own.  That's what distinguishes #2 from #3.

Where we fall into a trap is if we over-deliberate or let loss aversion dictate our learning environment, and if the world changed in a way that causes us to mis-predict failure based on our prior experience.  Sometimes it's more valuable to walk away from something of value even when we don't know what we're looking for in its replacement, because we have a distinct feeling that non-linear improvement is needed, or because we trust someone else's concept of where we can eventually end up.  Sometimes, something we failed at earlier is now possible, but only possible in a way are ignorant of, and therefore only possible in a way we cannot predict.

Ignorant and highly-motivated young blood (or adventurous veterans) in our field is what keeps us continue taking inordinate risks and learning from the experiences that come from them.

Does experience and capability make us better innovators?  Does our level of context make us more capable of effecting positive change?  Not necessarily, I think.

Maybe, to a point.  Once we've achieved a certain level of experience, I believe our efforts have higher overall effectiveness only if we are capable of avoiding the expert trap, and are able to forget & re-learn appropriate parts of our experience in the current context.

Some material that is relevant to this topic:
- http://matt.might.net/articles/programmers-resolutions/
- http://blog.8thlight.com/uncle-bob/2013/03/05/TheStartUpTrap.html (warn: unfortunate language)
- http://www.lessonsoffailure.com/developers/habits-kill-career/ (warn: contains a crude analogy)

Just remember the following pragmatic rallying cry:
"If it's not broke, let's not invite the UN to fix it." (heard on Linux Radar podcast)


  1. This is interesting. It reinforces the notion I've held that young developers are poised to innovate. Personally, I felt I was too inexperienced and don't know what to tackle when I was younger; now that I'm "more experienced", the cost of failure is too high. That's the first difference I see between young and old: what does a single 20-something have to lose?

    It's somewhat disheartening to consider that my expertise (such as it is) may be an additional risk. What's the antidote?

  2. I really like the resolution list from Matt Might (link above).

    I also think that the people you choose to work with have a big impact on your learning environment. Optimizing which jobs you take to maximize uncomfortable learning seems to have been fruitful for me.