The Full Story: Managing Change at 100MPH [FutureStack16]

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Henry Shapiro, Senior Product Manager, Insights

@nah_seriousThe Full StoryManaging change at 100 mph

Hi, Im Henry, and Im a product manager at New Relic. This is actually my third FutureStack, and my first one where I get to speak in front of a live audience -- super exciting, really jazzed, thanks for attending and for taking time.1

This document and the information herein (including any information that may be incorporated by reference) is provided for informational purposes only and should not be construed as an offer, commitment, promise or obligation on behalf of New Relic, Inc. (New Relic) to sell securities or deliver any product, material, code, functionality, or other feature. Any information provided hereby is proprietary to New Relic and may not be replicated or disclosed without New Relics express written permission.

Such information may contain forward-looking statements within the meaning of federal securities laws. Any statement that is not a historical fact or refers to expectations, projections, future plans, objectives, estimates, goals, or other characterizations of future events is a forward-looking statement. These forward-looking statements can often be identified as such because the context of the statement will include words such as believes, anticipates,, expects or words of similar import.

Actual results may differ materially from those expressed in these forward-looking statements, which speak only as of the date hereof, and are subject to change at any time without notice. Existing and prospective investors, customers and other third parties transacting business with New Relic are cautioned not to place undue reliance on this forward-looking information. The achievement or success of the matters covered by such forward-looking statements are based on New Relics current assumptions, expectations, and beliefs and are subject to substantial risks, uncertainties, assumptions, and changes in circumstances that may cause the actual results, performance, or achievements to differ materially from those expressed or implied in any forward-looking statement. Further information on factors that could affect such forward-looking statements is included in the filings New Relic makes with the SEC from time to time. Copies of these documents may be obtained by visiting New Relics Investor Relations website at ir.newrelic.com or the SECs website at www.sec.gov.

New Relic assumes no obligation and does not intend to update these forward-looking statements, except as required by law. New Relic makes no warranties, expressed or implied, in this document or otherwise, with respect to the information provided.

About me

mea dog

@ NR for almost 3 yearsTook Insights and NRDB from beta nowFrom NYC, in PDX for 10 years

So just a bit about me. This is me, this is my friends dog. Ive been at New Relic for about 3 years now, and throughout that whole time Ive been completely focused on Insights and NRDB. I grew up in New York, actually in Harlem, and Ive been in Portland for 10 years since I came out west for college in 2007.

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Impregnable Jive position, yo

me

GVP Product

CEO

Another thing to note about me is that Im the king of fake points. This was actually taken from our internal Jive instance -- I dont know how many folks in here use Jive at their company -- and as you can see, Im currently ranked higher than two-time founder

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What were talking about todayThe Innovators Dilemma and what it means in the new world for digital businessesHow digital businesses need to think about prioritizationWhat it means to be data-driven unifying the storyHow New Relic & Insights help digital businesses to manage changeThe future of New Relic Insights

Today, Im going to talk about how change. Specifically, Im going to talk about a dilemma that plagues all digital businesses -- the challenge of whether to invest in the status quo or to invest in new things, in a world where the pace of change and the pace of development is faster than ever.In addition to that, Im going to talk about the importance of using data to prioritize and invest in the right kinds of change, and how in order to effectively manage change, you need to unify information from across different parts of your business.Well hone in on a few key examples of how we do this at New Relic, as well as some examples of how our customers do it using some of the tools that New Relic builds.

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This is Clayton Christensen, hes a professor at Harvard Business School, hes spent a ton of his career focused on how businesses, especially mature businesses, manage their growth in terms of balancing both sustaining their existing success as well as innovating to enter new markets and appeal to new buyers and users.

In 1997, Clayton Christensen published a book called The Innovators Dilemma that focused on how successful, outstanding companies -- despite doing everything right -- lost their market leadership or even failed as a result of unexpected competitors rising up and taking over the market. He keyed in on a particular tension within businesses and organizations: that businesses were often caught between existing sources of revenue (what he called sustaining innovation) versus disruptive innovations that would drive new sources of revenue and market entrances.

The central thesis of Claytons book was that a disruptor == someone who came in and took over your market with a lower-cost offering. But a lot has changed since 1997, and Im not sure that the innovators dilemma still holds anymore.6

Whats changed since 1997?(a lot, lol)Disruption is no longer a low cost offeringDisruption is about who can:Offer the best experienceScale effectively

In the new world, for digital businesses, the Innovators Dilemma seems to be not as applicable. Its not to say that incumbent businesses arent in trouble -- they are -- but theyre in trouble because going down-market no longer means just being better-priced. It really means offering an experience that will win over customers and draw them away from incumbent offerings. That is, you need to be able to show your customers that theres a 10x benefit in your service over something else -- and the way you express that is by scaling to meet their demands and by offering the best experience in class.

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Ex: The iPhone was not a disruptive productNot the firstNot the cheapestNot the most openHighest quality of experienceSuperior scaling to meet customer demand

To contextualize this a bit, lets consider the iPhone. The iPhone 3G was not the first smartphone. It wasnt the cheapest smartphone. It wasnt the most open standard and it certainly didnt have the most features.

It did, however, offer a quality of experience that drew many consumers who had been averse to buying smartphones into buying one. They scaled -- meaning they offered services around the phone that made it hugely appealing for a consumer to buy one. So the iPhone didnt disrupt in Claytons terms by offering a cheaper phone or by racing to the bottom or forcing their peers to make their stuff cheaper -- they disrupted by having a superior customer experience.8

Both nature and pace of disruption have changesSoftware has never been easier to build or releaseConsumers have never had more optionsTherefore:Pace of digital innovation is expected to be higherQuality of digital experiences is expected to be higher

So the nature of disruption -- what it means to be a disruptive product -- has changed. But its also been coupled with a pace of innovation and technology development that is unparalleled.Digital businesses face this dilemma, but they face it at a greater speed and with greater risk than before. Yes, its easier in some ways to create new businesses, but this creates pressure as well as opportunity -- that is, if you can easily build a business that disrupts someone else, you yourself may just as likely be disrupted.Additionally, the tolerance for poor digital experiences has lowered for consumers. That is, while consumers have an easier time discovering your service or software, they also have more options for leaving you and going elsewhere.

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What does this mean for a digital business?Digital businesses must be able to traverse and balance multiple kinds of change at once... and digital businesses must be able to do this at scale, at 100MPHSustaining changes: scaling, improving customer experienceNet-new changes: new features, new markets

What this means for digital businesses, in essence, is that there has never been more importance in balancing both improvements and innovations to the customer experience (new features, rebuilding existing features, new product offerings that open up new markets, etc.) as well as ensuring scale and top-notch end-user performance / customer experience. In other words, businesses need to be able to effectively manage two kinds of change within their organizations:10

Businesses need to focus on this kind of change: tidying, sweeping, cleaning, keeping things kept up and maintaining our existing services. In the digital world, customers have high expectations for performance, they have lots of options for other vendors to go to, and their tolerance for a poor digital experience is extremely low.11

At the same time, there is an expectation to innovate, to build new things that amaze our customers and keep them interested in us -- were effectively expected both to be constantly disrupting while maintaining everything weve already built. 12

Digital businesses cant afford to waste resources on change that isnt valuable.

So what does this mean? It means that the pace at which digital businesses are expected to change