2014-05-14

Co.Labs

Why Do Big Companies Do Hackathons?

It's not about getting to market faster--it's about steering the whole company around obstacles that might otherwise be unavoidable.



When you’re in a big, Fortune 500 company, collaborating with different departments--especially with IT--can be hard if not impossible.

But as corporations start to embrace the idea of software-first future, they’re taking a page out of the tech book by adopting hackathons for everything from R&D to talent retention.

“Industries that you would never think are trying see how they can harvest the benefits of hackathons,” says Angelhack founder Sabeen Ali. “It’s decentralizing their IT in favor of a greater collaboration between developers, marketers, and CEOs to create products or simply get ideas flowing outside the typically constrained box.”

Long-Term Change

Unlike typical weekend hackathons whose programs span 24 hours, Fortune 500 companies are using hackathons to reap meatier ROI that includes talent retention, product roadmap, and prototyping. “For Fortune 500s, it’s more than just a sleepover, it's a change initiative,” Ali says.

Ali, who has worked with Verizon, Qualcomm, and Ford, says hackathons needs to be managed like an internal workflow shift--not an event. “We put a change strategy toward it, meet with stakeholders, and we help them sustain the result of the hackathon.”

To sustain results, Ali says an ecosystem is put in place where all participants and developers are stakeholders and regular incentives are rewarded to bring hacks to the finish line.

One of America’s oldest toy companies, Hasbro, recently held a hackathon where 150 developers came and developed 45 products--equivalent to billions of dollars in traditional R&D, Ali says.

“They were dissecting Elmo and incorporating it with the Operation game which was really neat,” she says. “It's much more of change management and breaking that gap between some of these older industries hoarding their IT,” she says. “Ultimately, that's really what's going to be the game changer.”

No More Hoarding Data

When Hasbro held its hackathon at their headquarters in Pawtucket, Rhode Island, it symbolized it was opening its doors and data to a more public audience.

That break away from tradition is what Mashery’s head of developer platform, Delyn Simmons, says is needed to accommodate the changing talent currency.

“Its a cultural challenge to put their trust in developers and open-source with their data, IP, or assets,” she says. “More and more companies are realizing that software is the future in almost every industry,” she says. “And developers want data.”

Simmons says corporations have the dollars to incubate such ideas but constantly struggle to meet developers' needs. “A lot of enterprises could be a lot more successful if they pay attention to the developer rather than what the enterprise themselves,” she says.

“In this day and age, you can’t retain enough technical talent. Likely the companies not headquartered in Silicon Valley and they don't live near that talent pool so companies will have hackathons and say, ‘we might hire you or purchase the IP from you or even incubation.’ It can also be used as a focus group,” Simmons says.

Sabeen Ali says, for Angelhack organizers, there’s a fine line they must walk when it comes to working with Fortune 500s to open their data.

“We try to create some constraint and some control that still lets the enterprise and corporate client keep their IT and make sure not too much of the data is getting out into other hands, but at the same time, there's an exchange where the attendees get enough information that they can create relevant solution for these corporate client,” Ali says.

Simmons and Ali say more car and telecom companies are embracing the open-data model to attract developers where they wouldn’t traditionally excite.

“Companies like Chevy and Sears wouldn't necessarily come out on top of a marketing or brand focus group--they've had their challenges,” Simmons says. “But the brand matters very little to the developers if you give them access to hands-on data to build something really cool.”

Traditional automobile industries are using hackathons as a means of creating in-car apps and safety features, according to the hackathon organizers. Last year, Chevrolet offered eyes-free 4G LTE integration data with AT&T to allow hackers to create apps for the vehicle’s safety while Ford has experimented with hackathons for social driving apps.

Edmunds.com has been teaming with Fortune 500 companies for invite-only hackathons called Hackamotive, where a variety of people get to hack the car-shopping experience using its vast auto data, Mashery’s Delyn Simmons says.

“You didn’t have to be able to code, you could be a marketer or someone else in a different industry,” she says. “Prototypes were embedded with product marketing so they [all participants] had a say in the hacks. And that was a big success because it was an inclusive event with a lot of collaboration and a really interesting turn on the traditional hackathons.”

Internal Collaboration

More and more Fortune 500 companies are steering toward a trend of in-house hackathons to keep a closer eye on their data, according to Simmons.

Unlike typical hackathons, enterprises that hold private hackathons require participants to sign an NDA contract, which can sometimes create more friction than just showing up to a weekend hackathon, Simmons says. But, it could also pay off more.

“If you're inside a company and convinced you have the best thing and if only you could get visibility in front of your CTO--then an internal hackathon is a great way of enticing the internal developers to skip to the top of the list, get an exclusive peak of data or even incubation.”

In the last two years, financial service corporation Capital One has run internal hackathons for a variety of internal innovation according to VP of innovation at Capital One Labs Skip Potter.

“This includes developing proposals, forming teams, building prototypes, and pitching ideas to senior business and technology leaders to secure funding,” Potter says. “We’ve organized several internal hackathons focused on creating new products, introducing new capabilities, and adopting solutions like APIs.”

“Internal hackathons are also a great way to help enable a 'maker' culture that is required in a modern technology company,” says senior director of innovation at Capital One Labs Joshua Greenough. “These can be a place for a developer to scratch an itch or experiment with new tools or platforms in a low-risk way.”

Angelhack’s Sabeen Ali says internal hackathons are opportunities for corporate employees to step outside of their regular role in an otherwise constrained work environment.

“They get to lower their typical boundaries, typical restriction, and build something that they think isn't part of their immediate role or immediate responsibility,” she says. “There’s a freedom to it.”

Prepping Corporate Hackers

But she says getting employees to think outside of those parameters is easier said than done.

“Organizations like Hasbro say, ‘We tried internal hacking, nothing really too groundbreaking came out of it,’ but we found that you have to also prime these people-- these typical R&D workers to get ready for thinking outside of the box,’” Ali says. “This is a big initiative that reinforces it's okay, we are putting a ton of resources behind drawing this event that ultimately breaks every rule and restriction that we've put on you Monday through Friday,” Ali says.

Ali says for companies like Accenture, hackathon team-building exercises need to be more literal.

“We start off our event and then by bringing in people to teach our coders how to do things like break dance, juggle, or make sushi, “ she says. “We bring in acupuncturists, go-karts, archery lessons, and laser tag. We literally get their blood pumping because ultimately, that's going to help them be much more energized, think clearly, and have more productive thoughts.”

By giving employees a chance at thinking outside of the box and outside traditional corporate structure, Ali and Simmons say companies are creating some friendly competition among themselves.

"It's not always just about technology. It's about how you can implement it, how you can work as a team, how you can solve problems, how you can work with shifting environments,” Ali says. “If anything, I think they're using it to give their internal team that burning platform and that inspiration that they need to be a little bit more innovative.”

With shifting environments comes risk, whether or not Fortune 500 companies see it as a viable one is a different question.

“Every single time, our organizers are amazed at what the internal teams come up with,” Ali says. “At the end of the day, it comes down to how big of a risk do they want to take. Ultimately, the bigger risk you take most and likely will be the bigger reward.”

Have you attended or thrown a corporate hackathon? Tell us about your experience in the comments below.

[Image: Flickr user TechCrunch]




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