From national banks to hospitality mammoths, it’s no surprise that hackathons have quickly made their way from Silicon Valley into corporate boardrooms. With startups popping out market-changing initiatives on the daily, many of these corporations turn to hackathons as part of their innovation strategy.
If you’ve ever participated in a hackathon, you’ll know that it often looks like a caffeine-fueled frenetic weekend, where participants are running against the clock. You’ve only got a few hours to solve a deep-rooted problem in a winner-takes-all type scenario, with teams pitted against each other for a coveted ‘grand-prize.’
The results: the winning idea in and of itself makes sense, that’s why it won! But despite how revolutionary the idea is— many winning ideas never see the light of day. In fact, our experience* tells us that only about 5-10% of these events generate a winning idea that ends up in the hands of the customer. And we’re not alone.
Others share the belief that innovation cannot be hacked as well.
In the end, employees feel frustrated that their creativity and desire to improve company offerings have gone ignored. Throughout the years, we’ve witnessed countless hackathons gone awry and the same failing results.
Our top 5 reasons why hackathons don’t work:
1. They don’t provide access to customers.
Teams must identify problems based on actual pain points. They do this by having deep understanding and empathy for their end-user. That means they need to be able to talk to them, collect feedback, and iterate with them. Unless you are solving for your peers, hackathons do not provide this.
2. They don’t embrace failure.
And how could they? These are fast and furious pseudo-competitions that are rarely longer than 72 hours? Teams must acknowledge that failure is a necessary part of innovation.
We’ve been asked many times by corporate teams, “How can you tell a good idea from a bad one? How do we know what to invest in?”
To this we say, “There are no bad ideas, only ones that haven’t addressed a real problem or have not been on iterated enough times.”
The failure of early ideas is a given, and should be treated as a learning opportunity to continuously improve upon products.
Too often, corporations prevent these learnings through a culture of fear, political backlash, and evaluations based on success. Executives must ensure a safe space for ongoing experimentation and failure, and give employees incentives for taking calculated risk in the pursuit of innovation.
3. They “get stuck” because of organizational silos.
Rallying the support of multiple stakeholders is essential to successfully launching a new idea. In organizations where teams operate in silos, this can be a major challenge. Approval delays, unwilling supporters, and unforeseen constraints can drain momentum and grind projects to a halt.
To overcome this, teams must be able to move their idea across silos — stakeholders should be involved early to ensure success metrics are aligned and constraints are identified. They must understand that what gets produced is a direct reflection of how well they do this.
4. They can’t navigate politics
Large organizations require a complex system of processes to manage hundreds of internal divisions and the security of information — this also prevents the timely development of innovations. Special channels should be created to fund, build, and validate new ideas without requiring projects to drudge through traditional processes.
Executives should do their best to reduce unnecessary friction during the innovation cycle by creating such channels. This may come in the form of an internal VC funding model, where small investments are made in multiple early innovation projects.
5. They don’t work within budget constraints
Hackathons don’t expect teams to consider budget. Without budget, teams are capable of creative brainstorming and rapid prototyping, but they will never develop the idea’s ability to be executed upon.
In order for these ideas to see the light of day, teams must speak the language of capital — and have conviction in doing so. They do this by anticipating market change, citing examples from the past and forecasting growth.
An Alternative to Hackathons
The greatest challenge with corporate innovation is not in finding the right ideas, but creating a favorable environment for them to evolve. To successfully produce new innovations, executives must think beyond self-contained hackathons, and find ways to integrate their philosophies into the heart of the organization.
Consider making innovation a part of your everyday culture. After all, the best way to learn is by doing. Create “fail-forward” environments that allow for experimentation to happen. Instead of hackathon-specific challenges, get teams to tackle challenges that are already in the fiscal pipeline.
Remember, innovation does not happen when new ideas are generated. Innovation happens when they are executed upon.