Hackathons aren't just for hipsters

Done right, they can be a training tool that engages and produces rapid results

By Mark Pesce

Posted in Business, 16th June 2016 07:05 GMT

Glancing up from our smartphones, we catch sight of a world that has suddenly become almost entirely different. Surface appearances haven’t changed very much - buildings and cars and all that infrastructure - but behind the scenes nearly everything has been transformed.

Everything … except for business practices. Those haven’t changed much in a hundred years, since the ideas of Taylorism and ‘scientific management’ became dominant. Yes, today we have ‘agile’ ‘scrums’ ‘working lean’ to deliver a ‘customer-centred experience’, but that’s all not much more than lipstick on the proverbial pig. The face of it might be a touch prettier, but the guts remain the same.

That presents a number of problems, one of which is the ‘burden of omniscience’: the C-suite folks have to be across everything in the entire organisation, passing what they learn down through the ranks. Fifty years ago that might have worked, but today it’s impossible - and part of the reason we see bigger organisations falling behind the further and further behind the curve.

We need organisations where everyone in every part of that organisation are learning and using what they’ve learned to improve organisational performance.

There have been attempts to reconfigure the organisation around learning, such as Zappos’ CEO Tony Hsieh’s fascination with ‘holocracy’, a radical-decentering of the management structure. But holocracy is far too radical for any but the most experimental of businesses. Businesses may see the need for change, but not that much.

What’s needed is a middle way, a path between sclerosis and Holocratic ‘continuous revolution’, something that a big organisation can get behind because it returns results without burning the house down.

And it may be that we’ve found the answer in the humble hackathon.

Hackathons are one of startup culture’s weirder gifts to the world: stuff a group of people together for a weekend, let them self-sort into teams organised around clearly-defined projects and feed them pizza for two days as they code their way to a solution. The finished products may not be Minimum Viable Products, but they’re always interesting - even the failures. Especially the failures.

A recent survey compared a hackathon to a university degree and found, despite their brief duration, hackathons delivered practical skills more effectively than a university degree (though the university graduate has greater depth of understanding).

So what happens when you take the rapid upskilling of a hackathon and apply it to a huge organisation? Amazing things.

I recently had the opportunity to guide one of Australia’s biggest corporations (a bank) through a hackathon intended to improve employees' knowledge of the blockchain, the distributed ledger that underlies and secures Bitcoin.

The hundred-odd employees who participated came mostly from the middle levels of the organisation. These were folks who have come up through the ranks, so are utterly familiar with organisational processes, do real work and know what’s hard, slow, or broken within the organisation. They're interested in solving real-world problems.

When you educate people like this, they put that knowledge to work to improve the organisation.

Hackathons vary widely on the levels of support they offer, and this one offered a wealth of mentoring around defining the product, identifying the customer, and finding a path to a technical solution. All of that helped each of the hackathon teams achieve outstanding results. Along the way it also improved the skills of every participant. Each understands heaps more about product/market fit, user and customer experience , and the underlying technologies of blockchain than they did before the hackathon. They can now carry those skills back into the organisation.

During the pitch and demos that concluded the hackathon, the judging panel had their minds repeatedly blown by teams that identified a very specific, hard problem - sometimes within the bank, sometimes within the broader financial system - and produced a solution. Some of these solutions broke existing governance structures. Not because they were illegal, but because they took the capacities of our financial system in directions that neither regulators nor financial institutions have ever imagined.

In those moments, everyone got a real taste of the future: If this was what the bank’s own employees could come up with, could they expect less from tomorrow’s crop of entrepreneurs? These employees are not competitors - but they illuminated the shape of both future competitive threats and regulatory bottlenecks.

The judges voted, awarded prizes, and everyone went away happy. On the Monday following the hackathon, those hundred employees went back to their cubicles with improved skills in and knowledge of the new technology of finance. They're already passing on that knowledge, in conversations, in meetings, in strategic documents, and more. That hackathon was gift that will keep giving for years to come.

Within a few years, hackathons will be the go-to solution for quickly upskilling big companies, as more organisations see the real benefits smarter employees can deliver. They’re easy, they’re cheap, and they’re effective. Startup-land has given corporates a tool they can use, and it won’t be long before they’re on it like they own it. ®

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