Don’t Eat Strategy for Breakfast and Five Other Lean Enterprise Tips
Written by Misti Yang, Contributor for Lean Startup Co.
Lean Enterprise offers solutions for large organizations that want to do more than mere “innovation theater” — superficial practices that go through the motions of innovating without producing lasting products. But even while using Lean Enterprise tactics, innovation leaders often hear the death knell of procedural questions — “Wait, whose budget is paying for this?”
So how do you move from knowing you must innovate to overcoming the organizational hurdles that shut you down? To find the answer, we recently did a webcast with Tendayi Viki, author of The Corporate Startup, and Janet Bumpas, program director for Scaleup Nation — two of our featured speakers at our upcoming Lean Startup Summit London June 13–14 — and we’ve compiled some of their best Lean Enterprise tips into a simple post.
“When culture is hungry, it eats strategy for breakfast”
That’s Tendayi talking, and his point is this: plenty of organizations can develop a strategy for innovation, but that vision is often devoured by the company’s culture. Developing the momentum to overcome the “we’ve always done things this way” mentality requires more than an astute sounding memo. “I’ve literally worked with leaders that say to their teams, ‘Run experiments. Do pivots. Iterate. Do some research before you build something,’ and then when it comes to the end of the year, … they’re asking you about how much profit you made from a corporate portfolio,” Tendayi says.
Janet agrees: “Teams tend to break down [when they] run up against the way the rest of the company is working: How does the money get allocated? Who works on what in the product roadmap? Who gets promoted and rewarded and can move forward with their projects?”
Don’t ask, “Where’s the revenue?”
“The fastest way to kill an initiative that’s in the search phase is to ask [someone], ‘Hey, when are you going to get to revenue?’” Janet says.
Of course, the ultimate goal may be to make money, but as Tendayi recognizes: “You can’t manage a product that’s just emerging using the same tools that you use to manage a product that’s been in the market for five to ten years generating revenue.”
One practice he recommends instead is incremental funding — giving teams small investments so they can use them to work quickly and efficiently to find answers. You will also have to work on convincing the finance people that investing in learning first will generate better returns in the long term. Tendayi recommends budgeting up to $50,000 for testing customer needs and up to $250,000 for testing possible solutions.
Ask the right questions at the right time
If you can’t ask about revenue, what can you ask about? Tendayi recommends questioning the right metrics in the right order:
1st - The customer-need metric
2nd - The solution metric
3rd - The business-model metric
4th - The five-year projection
Knowing what metric to look for and when eliminates some guesswork and stress from new product development. If you are a team tasked with developing a new product, you do not have to speculate what metric executives need to see in order to invest more. If you are an executive, you can keep Lean Enterprise practices on track by sticking to the sequence of metrics.
Janet recommends doing Agile sprints to keep executives engaged. This involves breaking initiatives into two-week timeframes and keeping stakeholders continuously involved. At the end of every two weeks, do a sprint retrospective meeting with a key decision maker present, and ask, “What did we accomplish over the last two weeks? What do we want to accomplish over the next two weeks?”
Find your hacker, your hipster, and your hustler
There are numerous ways to assemble a team dedicated to building the next big thing. You can run an innovation challenge, hand select a team, or set up an internal application. Janet just cautions to be “cognizant of how you’re talking about what it is you want,” because asking explicitly for “risky, bold, innovators” probably won’t create a diverse team. And diversity is what you want.
Janet advises that in addition to a team diverse in seniority and gender, you should look for hackers, hipsters, and hustlers, or in other words: “someone who can build a prototype,” “someone who has some new ‘X’ skills,” and a real go-getter businessperson. Top your team off with a project manager and balance out folks who are thinkers with folks who are doers.
You can run a guerilla movement if you really want to (but don’t)
If you’re a developer burning with a new product idea and you’re reading this thinking, “I’m just going to go for it, dagnabbit!” Stop. “At some point, you’re going to have to surface from the depths of the guerrilla movement and ask somebody in the organization to make a decision about taking the product to scale, giving you some more resources, or using a sales channel,” warns Tendayi. At that point, if you don’t have support from an important decision maker — a champion, so to speak — your idea will likely wither.
Get an early win
How do you find champions? Tendayi says that sometimes you just know “the cats that get it” in your company, but there are also pragmatic approaches for those without a feline radar.
For your first project, Janet recommends avoiding the approach of saying, “We’re going to do an AI chat bot with a narrow interface and machine learning.” Instead, she says, “Pick something easy to go for first that can give you a big win in the company.” Success enables you to ask people to change things, so “think strategically about what your first project is and where are you going to get that win.” She suggests starting with time-bound projects that do not disrupt a core competency of the company.
If along the way, the data suggests you should keep going, but a stakeholder still isn’t buying it, Janet says go for an emotional angle. “[G]o back out and talk to your customers and bring a camera,” she says. “Come back with a video of a customer saying, ‘Wow, this is a huge problem, and I’d be willing to pay someone money if they could give me a solution.’”
While Lean Enterprise is a robust philosophy for managing innovation and growth, Tendayi and Janet do a great job explaining the basic ingredients required for a successful foundation: phasing out your budgets and metrics appropriately, getting commitment from a diverse team, and hustling to show the big stakeholders data that convinces them that a new way of doing things can work.
To learn more, join us at Lean Startup Summit London on June 13 & 14. Janet Bumpas will be leading a session on making large corporations more nimble, and Tendayi Viki will be providing instruction in innovation accounting. You can also listen to the full webcast of the above conversation here.
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