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INNOVATE OR DIE

10 September 2020 / Otra

Innovate or Die - Digitain

There is no more delicate matter to take in hand, nor more dangerous to conduct, nor more doubtful in its success, than to be a leader in the introduction of changes. For he who innovates will have for enemies all those who are well off under the old order of things, and only lukewarm supporters in those who might be better off under the new.”

Niccolo Machiavelli “The Prince”, circa 1513.

So, what relevance can the thoughts of a 16th century diplomat and political philosopher have on the product development strategies of betting and gaming businesses in 2020?

In truth, probably not a lot – his was a rather negative perspective – but he does raise a good point though. Innovation is hard and there are many reasons – including cultural, financial, utilitarian and internal conflict – why it remains an apparent problem in our industry.

I often read that there’s a severe lack of innovation in the sports betting industry – there’s certainly a lot of Me-Too development, where companies are quick to copy apparent successful innovations – often not realising the full picture why a particular new feature has been successful.

However, to say there is no innovation is wrong I believe. I think one problem is that there is often confusion in iGaming between the terms invention and innovation.

For me invention describes a significant step change in a product or a process, something that has the potential to change how we conduct our business. The microprocessor was an invention – the iPhone was an innovation, taking existing technology and completely changing how the simple mobile phone was used.

An innovation is not a step change, but making an improvement in how product, processes or service are delivered. Innovation does not need to be radical to be successful – but it does need to have utility and should deliver added value.

I would argue, therefore, that innovation is happening across the sports betting and gaming industry – although it could be “under the bonnet” and invisible to outsiders.

Covid-19 and its challenges to delivers to the world economy, it’s reasonable to expect that innovation in iGaming development will shift somewhat from a focus on customer requirements (effectiveness) to a focus on cost optimisation (efficiency).

Another complication when discussion innovation is that often it’s also often confused with continual improvement activities.

It could be argued that a continual, never-ending, process of delivering small improvements delivers more value to a business than focusing on break-through innovations, or even the more difficult to attain, inventions. Continual improvements and innovations should belong to everyone in the business to identify and act on, although there needs to be supporting culture, systems and processes in place to recognise and reward the effort. A business needs to avoid the trap pointed out by old Niccolo above; fear of change and allowing inertia to rule.

Continual improvement and innovation are two sides of the same coin, their meanings overlapping and probably only different in terms of the scale of the change.

A good example of a continual improvement strategy was the British Cycling Team from the mid 2000s.  Before the appointment of a new performance coach, Dave Brailsford, the British Cycling team had endured 100 years of mediocrity.

From 2007 to 2017, British cyclists won 178 world championships, 66 Olympics and Paralympics gold medals and 5 Tour de France victories.

How was this most successful run in cycling history achieved?

Through the aggregation of “marginal gains” – in other words, continual improvement.  This meant searching out a tiny margin of improvement in everything they did – from the alignment of bike seats, rubbing alcohol on tyres to testing different fabrics for aerodynamics and beyond.

Brailsford and his team were relentless in searching for “1% improvements” – even though the impact may not be noticed – the aggregation of these improvements made the difference – as well as having an improvement on the psychology of the team.

Perhaps more businesses in iGaming would be better served to look internally for marginal gains instead of “Going for the W” with an industry-leading (soon to be copied) innovation?

Both are probably true actually – but, as stated above it can be hard to deliver change to the status quo. There can be a lot of internal barriers to overcome. One possible approach to delivering iGaming innovation is to understand that not all the brains are in the business. More and more companies in iGaming (such as Microgaming and Yggdrasil) have reached out with and set up relationships to other smaller businesses or start-ups (with less barriers / more appetite for risk) to deliver innovative products or ideas.

At Digitain we see this to be a valid strategy and via our Digitown initiative we will invest in the youth of Armenia in order to support innovation. Digitown is a technology campus being developed in Yerevan and will be the new home for the Digitain teams as well as offering a degree of free accommodation and mentoring support to new technology start-ups.

We believe this initiative will benefit Digitain in terms of potential innovations generated by the relationship – as well as developing the identity of Yerevan as a technology centre of excellence.

As Machiavelli pointed out 500 odd years ago – change can be difficult and not always welcomed – and can need determination and drive to deliver.

A number of years ago there was a study carried out by management scientists who wanted to look at how the make-up of working groups could impact productivity / performance.

They put together a large group of experienced managers and split them into 10 teams of five people.

They then gave each group a series of identical tasks – which could have measurable but variable results. What the managers in the groups didn’t know that in half the groups one of the participants was a plant.  Their job was to challenge every decision – in a polite way – but to be relentless throughout the process.

When the tasks had been completed and scored the results were interesting. In every example the teams with the plant outperformed the other teams by a significant distance.

The creative tension caused by the actions of the plant questioning every decision had resulted in a better overall performance for the team.

The other teams had formed, stormed, normed and performed – but to a lesser extent than the other groups – who had formed and stormed (didn’t norm) and out-performed.

However – when the groups were later asked anonymously if they wanted to change the make-up of their groups – guess what happened?

In the groups who had under-performed – in each one they wanted to keep the same individuals together – as they were comfortable together.

In the better performing groups, the decision was unanimous – despite their clear success they all wanted to get rid of the really annoying member who kept questioning everything they did!

So, the lesson for us all…

Drive innovation and change by,

Avoid groupthink, don’t get blinkered by the status quo and don’t be too in love with your own products.

Make data led decisions and listen to others, especially your customers.

 

And finally…

Remember that progress depends on the unreasonable person. Creative tension (not conflict) is a good thing – you’ll get better results. Also encourage ideas and innovation from across the business.

Let’s add “and other online casino games providers” keyword

Doesn’t make sense – saying such as – is quite specific