The Hackathon: Fostering Innovation, Collaboration, and Education

• Jo Hoenzsch
• Mar 5, 2021
• 7 min read

“Hey, do we do Hackathons here at Ally?” One simple question led to an annual tradition responsible for rapid innovation, improved culture, and invaluable training. My coworker posed this question to our manager in the first year that the two of us had joined Ally, and the response we got was, “No, but tell me more.” That set off a chain reaction of excitement that led to us being sat in front of the CIO proposing an event for our entire technology organization.

It’s now been almost four years, and this grassroots initiative has grown into the annual “Ally Tech Hackathon.” In our most recent hackathon, our CFO, CIO, President of the Bank, President of Auto Finance, and other technology leaders saw over thirty functional minimally viable products (MVPs) leveraging everything from machine learning to augmented reality, with many proposed solutions that could have tremendous impact on Ally’s bottom line. However, I’m actually not here to write about the solutions. While they’re tangible proof of how a hackathon can save and make Ally money, the benefit to our culture is where the hackathon really shines.

Running Successful Hackathons

The first question for some of you may be, “What is a hackathon?” There are many definitions, but I’ve settled on this one: “A hackathon is a short, sprint-like event wherein small teams create a working technology solution that solves a business problem.” Now, that’s a bit vague, but it is intentionally so. Not every hackathon needs to look the same. Here’s how we do enterprise hackathons at Ally:

Step 1: Solicit Ideas and Form Teams

First, we solicit business problems and strategic priorities from all levels of the organization. These are the ideas that can spark the solutions the hackathon teams will create. After this, we open up team sign-ups. Team size is usually around four people, but we try not to be too strict about that. At the end of the day, if a two-person team or a six-person team can deliver something great, then there’s no reason for us to micromanage team size. The hackathon itself then takes its course over two business days. We give these employees their entire working day, both days, to work on the hackathon.

Step 2: Make Time

I can already hear some people asking, “Well, how can we give up two full business days for so many employees? We can’t let their work slip behind.” I would like to reframe that concern. The hackathon’s benefits will far outweigh any “lost productivity” from the time given to participants. In the very first year the hackathon occurred, just one of the teams was able to put together a solution in 8 hours that replaced the need for a $100,000+ contract with a consulting firm. Even without the financial benefit of the solutions, you are making a long-term investment in your employees.

Step 3: Build Valuable Solutions

During the hackathon days, the teams will work to create a MVP or at least a proof of concept that is quickly “hacked” together. The intent is not to create production-ready code, but rather to create something that shows value and that their solution is both possible and advantageous to implement. During the hackathon days, you may also have guest speakers, subject matter experts, and others come to give talks or offer office hours.

Given the pandemic, our hackathon this past year was virtual. However, in prior years we made sure to do the hackathon in an off-site venue. We felt that by taking people outside of their normal work environment, removing typical distractions, we would foster even more innovation.

Step 4: Make It Visible

Presentation day is the culmination of the hackathon. We had our most recent hackathon on a Thursday and Friday before the weekend and held the presentations during the afternoon the following Monday. At this point, the most senior leaders in the company will watch the demos from the hackathon teams and see what they created. I want to make clear that though these solutions will not be production-ready, the presentations should be a demonstration of a working MVP, not just a suggestion of something that could be implemented.

Step 5: Celebrate Outcomes

Afterward, we have the judges deliberate, pick winners, and then the winning teams are recognized and given prize money. We typically use criteria of “innovation,” “completeness,” and “business impact” in ascending order of importance for the judging. After the hackathon is over, our leadership looks over all the solutions holistically. Whether or not a solution “won”, all the solutions that seem valuable and viable are assigned a business leader as a champion who will help shepherd the solutions forward. Not all solutions created will end up being implemented, of course, but there is benefit in the hackathon even for teams whose solutions end up not moving forward.

Hackathons are Good for Business

Now that you understand a bit more about what makes up a Hackathon, I’ve chosen to break down the benefits of a Hackathon into three pillars: innovation, collaboration, and education. Theodore Levitt, economist, once said, “Creativity is thinking up new things. Innovation is doing new things.” Since a Hackathon is all about delivering an actual working solution you don’t break out a PowerPoint presentation; instead, you show exactly what you made. It’s all about being hands-on-keyboard and implementing something tangible.

Innovation

I will always say there is no shortage of good ideas in any workforce, but many companies struggle with implementing those ideas. A hackathon creates a perfect breeding ground for trying new things, thinking outside the box, and exploring things outside the purview of one’s typical role. You’ll be shocked by the amazing things that can get built in such a short period of time. However, it doesn’t just end with the solutions. Those team members will bring that energized, innovative spirit back to their teams long after the event is over.

Collaboration

A common problem in our industry is a failure to communicate that can lead to duplicate work and other frustrations. A hackathon is an incredible way to bring people from across the company together. Teamwork and collaboration are key to being successful both for the hackathon as well as for a company’s success.

The numbers speak for themselves; roughly 95% of participants self-reported that they became closer with their coworkers. We were also surprised and excited to see most teams formed across different departments. The cross-company camaraderie a hackathon brings is invaluable to fostering a positive, collaborative culture. A hackathon can also help expose teams to how other teams tackle technology problems — often, these events help teams identify duplicated work and create patterns that can spread across the enterprise instead of remaining in a silo.

Education

Education is one of the greatest benefits of hosting a hackathon. There is, of course, the obvious benefit of employees being able to expand their expertise for their own careers, but it also keeps your employees energized and fresh. When employees are encouraged to look outside the box and try new things, you end up having even more tools at your disposal to tackle the challenges a technology organization faces.

To give an example, one team was able to use machine learning to create a prototype of a solution that pre-sorts and groups loan applications that are scanned or mailed in, saving countless associate hours in the process. This particular solution was developed by a team that prior to this had never delved into machine learning, but by the end of the hackathon, they had an MVP up and running. Now, whether or not we use the particular implementation, that team has additional skills available to them as they move forward.

Another example is as we invest more and more in our public cloud infrastructure, we found that the hackathon was one of the best ways to get technology team members rapidly exposed. Teams who supported on-premise applications that had no prior experience with public cloud were able to find new and often better or more cost-efficient ways to solve their business problems by leveraging public cloud technology. Any time you want to push for new technology initiatives, consider a hackathon as a tool in your arsenal to get everyone hands-on experience as quickly as possible.

Let’s Get Hacking

A hackathon is an excellent method for promoting innovation, collaboration, and education across an enterprise. While I have discussed an enterprise-wide hackathon, they can easily happen on a smaller level within a particular department or group.

A hackathon allows for absolutely anyone to create a solution that can greatly impact the whole enterprise. While amazing leaders are necessary for a company to thrive, allowing freedom for employees to innovate can be an incredibly positive surprise. The main goal is to get everyone trying new things, thinking outside the box, and allowing great ideas to come from people at all levels of the organization.

We can imagine a future where open community hackathons can allow innovators from around the world to use our APIs to explore the art of the possible!