Iterative Coordination and Innovation – Harvard Business School Working Knowledge
Author Abstract
Agile management practices from the software industry continue to transform the way organizations innovate across industries, yet they remain understudied in the organizations literature. We investigate the widespread Agile practice of iterative coordination: frequent meetings to coordinate individuals on innovation-oriented organizational goals. While the assumed purpose of iterative coordination is to generate innovation, there is limited empirical evidence as to whether this practice actually makes organizations more innovative. With the leading technology firm Google, we embed a field experiment within a hackathon software development competition to identify the effect of iterative coordination on innovation. We find that iterative coordination’s influence on innovation is mixed: while iteratively coordinating firms develop more valuable products, these products are simultaneously less novel. This counterintuitive result highlights a paradox at the heart of iterative coordination—whereas it intends to promote innovation, applying it yields less novelty, a necessary component of innovation. Furthermore, by tracking software code, we find that iteratively coordinating firms favor integration at the cost of specialization to create new knowledge. A follow-on laboratory study documents that increasing the frequency and goal orientation of iterative coordination meetings reinforces value and integration, while reducing novelty and specialization. This article makes three key contributions: refining theoretical understanding of the relationship between goal coordination and innovation; introducing empirical methodology for generating data with hackathons and software code version-tracking; and responding to calls from the literature to study new methods of organizing and whether they offer new insights on organizational innovation.