…the Lean Startup way
Build an adaptive organisation
As mentioned in my previous blog How I want to build my business, startups are built on uncertainty.
So what sort of company do we need to build to excel in this uncertainty?
As Eric explains it “…we need an organizational structure, culture, and discipline that can handle these rapid and often unexpected changes”…“one that automatically adjusts its process and performance to current conditions.”
Eric recognises two powerful challenges for entrepreneurs implementing lean thinking:
- Building an organisation where these assumptions can be tested systematically; and
- Performing these rigorous tests without losing sight of your company’s overall vision.
A healthy culture is based on the ethos / environment as well as the processes implemented; and they require the support of the whole team, including the executive team! When looking at both ethos and process, my takeaways from The Lean Startup for building a healthy culture which I would like to employ, include a commitment to:
- Iterating; and
Something caught me off guard in this book — the idea that people find difficulty in measuring value on learning and instead measure value on productiveness. As a result, we build department-based teams where we all put our heads down, our bums up and move work from one department to the next. When we move work on, we see this as productive, whereas real productiveness is in the intangible value of learning.
As a result, we need to re-think how our teams operate, and how we can introduce learning milestones into the business as a value of productiveness by implementing effective experimentation systems.
- First, we need to build smaller multidisciplinary teams. Strangely, functional specialisation has been proven to be less effective; and Eric suggests teams no larger than five.
- Then, we need to reduce the batch sizes of work. “The ideal goal is to achieve small batches all the way down to single-piece flow along the entire supply chain. Each step in the line pulls the parts it needs from the previous step.”
- Every role needs to spend time with the customers. A term I particularly liked was Genchi Genbutsu, illustrating the importance to go and see for yourself.
- And, we all need to be marching to the same drum. Every activity and decision needs to be focussed around the vision and priorities of the business.
It’s important for a startup to build an environment for innovation, including building a community of entrepreneurs.
And as Eric notes, “A solid process lays the foundation for a healthy culture, one where ideas are evaluated by merit and not by job title.”
An ideal scenario is building an onboarding process to enable new employees to be productive on their first day, while also learning the culture of the company, and how all these processes work. Eric did this by creating a systems-level view, and asking new developers to change the production environment when they began. Then, if something was to break, this new employee would lead the fixing of the issue to ensure the next person couldn’t break it. This immediately taught the new employee the company values of fixing things straight away, and of continual improvement.
In essence, by implementing lean thinking effectively, we’re able to achieve validated learning, convert push methods to pull, reduce our batch sizes of work, keep nimble and then accelerate.
I had a real palm to face moment when Eric described the difference between the driver-to-steering wheel experience for a car versus a rocket ship. I’ve often taken the rocket ship approach, by planning every step and expected result far in advance. However Eric is absolutely right — I have certainly experienced times where down the track, minor errors have meant big impacts for me, and these could have been avoided with the car approach, identifying much sooner when I needed to take a sharp turn or whether it was safe to continue along my current path.
Lean thinking is a great way to look at providing the discipline needed to build an adaptive organisation and is discussed in more detail in my blog How I want to build my business, including a description of the build-measure-learn feedback loop, batch design and continuous development.
It’s important, particularly when working in multidisciplinary teams, to ensure everyone is on the same page, and they all have a thorough understanding of what’s going on. This means communicating in a more simplified way so those outside your technical skills can read, interpret and contribute. One example Eric provided was for feature requests to be written as customer stories, and for reporting, it means implementing the 3 A’s:
- Actionable: demonstrating clear cause / effect so everyone can learn from their actions.
- Accessible: using terminology so everyone understands them, plus ensuring everyone has access to them (e.g. a simple one-page summary of the results emailed / available via log-in).
- Auditable: being able to test by hand (by talking to customers), as well as using a simple mechanism for generating the reports (ideally drawn directly from the master data rather than an intermediate system).
Teams are then in a much better position to evaluate how the changes made were related to the results they’re seeing, and to ensure the correct lessons are being drawn from the changes. This puts the team in a better position to evaluate the company’s position, and identify what direction it should take.
Pivot or persevere?
Eric also suggests teams hold regular pivot or persevere meetings. He recommends every 1–2 months; however notes the regularity will be best determined for the individual organisation. This meeting would include:
- Product development team. They would provide a complete report on the product optimisation efforts and a comparison against expectations (over time, not simply since the last meeting).
- Business leadership team: They would provide detailed accounts on conversations with both current and potential customers.
- Outside advisors: They would be asked to provide external thoughts / advice where possible.
Management is human systems engineering
This book has been incredibly valuable in allowing me to question my earlier processes developed, and think about how I wish to build startup organisations in the future.
I’m excited to put this into practice, and share my progress!