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Editor’s Note: We wrapped up the 2017 Lean Startup Week in San Francisco just a few weeks ago, and we’re excited to share with you some of the best lessons learned in entrepreneurship and corporate innovation. Expect to read a new story each week straight from our keynote and breakout stages.
In an interview with GE’s Culture Transformation Leader Janice Semper during Lean Startup Week, Eric Ries remarked, “Listen, that's our specialty here. We try to talk to real practitioners about actual, real issues.” And the effort was reflected by the 140 speakers and mentors who took the stage and ran workshops over the course of the seven-day conference. We'll share the lessons we learned from these inspired leaders over the next few months, and give you a taste with these seven highlights from Lean Startup Week.
LESSON #1: Equip your business with a portfolio map and a 21st century org chart.
With industries from banking to transportation being transformed and, in some instances, undermined by new business models and technology, executives are smart to wonder, “Are we next?” To confidently answer no, co-founder of Strategyzer Alex Osterwalder told our attendees, “What you really want to do is work more like Amazon. … The reason Amazon [is invincible] is because they've put a system in place that allows them to continuously innovate.”
To do the same, Alex recommends building two things: a business portfolio map that recognizes invention as necessary and an updated organization chart. “You need a pipeline of tested and validated ideas,” Alex said. The pipeline starts by dividing your business into two distinct functions: innovation and execution. The innovation motto is “Fail fast.” The execution motto: “Failure is not an option.” The innovation function is dedicated to iterative search through experimentation. The execution function is dedicated to the day-to-day business.
To successfully support experimentation, Alex explained you must also create an org chart that mirrors the roles overseeing execution. For example, if a chief executive officer manages the daily operation, a chief entrepreneur heads up innovation efforts. “And the chief entrepreneur has a staff of chief portfolio manager, chief venture capitalist, and chief risk officer, right? Because these Lean Startup people, they do crazy stuff,” Alex joked. “So that gives us two different management structures for these two different portfolios.” Two particularly important roles include the chief venture capitalist, because the investment philosophy for invention is different than traditional finance, and the chief internal ambassador “who connects the two [functions] and builds bridges.”
LESSON #2: Forget innovation. Remember your customers, culture, and connections.
ING Group is an exemplar of supporting continual improvement, so it may be surprising that their Chief Innovation Officer Ignacio Julia Vilar told the Lean Startup crowd that “innovation” is “a little bit [of] a buzzword.” So, ING has redefined the I word. “And to be honest,” Ignacio shared, “the first thing that we said is what it's not about. And innovation is really not about gadgets.” Instead, ING has adopted a company-wide focus on three Cs: customers, culture, and connection. It’s “creating something really useful for the customer that is solving the need of the customer.” And to do this, ING has had to create the right culture and sometimes connect with outside fintech companies.
To support the three Cs, ING has also developed their own iterative practice named PACE. Describing the development of this methodology, Ignacio explained, “We just sat down together and said, ‘Well, let's look at what we're doing. … Let's see what works well, what doesn't work well for us, for our organization, for our culture.’ We tried to define the best for us, and then we started practicing.” The result is a combination of design thinking, Lean Startup, and Agile Scrum, and Ignacio’s innovation team includes 25 coaches who train employees in PACE best practices. To “embed this in the organization,” the company has created PACE Everyday, “a simplified version…to force our organization to always start with what is a problem that we are trying to solve and to test it and to test it in a real way.”
LESSON #3: Avoid these three hiring mistakes.
When it comes time to grow your team, Jeff Jordan and Eric pointed out three hiring mistakes to avoid.
First, do not hire someone just because they have the domain expertise. You want to be sure that they can work with the resources you can provide in terms of staff size and budgets. In other words, be sure they are ready to work at a startup. Jeff elaborated, “You want to tee [your hires] to the state of the company.” For example, don’t court public-ready CFOs when your financials aren’t even on QuickBooks yet.
Second, don’t simply hire your buddies. “You’re kind of looking for founders,” not friends, remarked Jeff. “If you know the true story of any [startup], the early employees are every bit as entrepreneurial, every bit as dedicated … as the true founder,” Eric seconded.
Lastly, question any hiring decision based on “culture fit” alone. While Jeff and Eric agreed that company culture can be powerful and effective, it can also result in a homogeneous company with unexplored opportunities and weaknesses. Eric recounted, “I was just in an interview where someone was saying, ‘I don’t want to hire this person. They’re qualified. I liked all their answers, but my Spidey-sense is tingling. I didn’t feel like they’re a fit around here.’ The human brain is really good at producing intuitive leaps, but we know from the research that those leaps can be biased by irrelevant characteristics. Whenever you hear, ‘They’re not a fit,’ you have to look really carefully.”
LESSON #4: Get creative with your MVPs.
In an interview with Eric reflecting on their work together at GE, Viv Goldstein and Janice Semper, co-founders of GE’s FastWorks, demonstrated that even a hundred billion dollar company can learn from creative, low-cost MVPs. When the CEO of GE’s Sustainable Healthcare Solutions business in India called Viv one day and said, “We've got a problem selling our neonatal incubator,” Viv explained: “We started by asking what is the customer problem we're trying to solve for? What is the impact that our customers need? And what are some of the challenges they're facing with the product right now? Not, ‘what's the technology?’ In GE, technology used to be our lead, and instead we reframed that and started with the customer.” The team discovered that medical professionals in rural clinics in India needed a more suitable and convenient way to place the babies in the incubator, and needed incubators that could hold multiple babies while still providing the right amount of heat and light to each baby and withstand the one type of disinfectant clinics could afford. The first MVP was “a shoebox and a doll.” When confronted with a “safety valve hydraulic thing,” Eric remembered that “all the conversation in the room was about the technology of hydraulics.” But, “the ultimate MVP they had involved sending a team member to go sit on the rig … to find out what the actual safety problems were.” What did the rig-sitter find? The problem “had nothing to do with hydraulics and everything to do with 29 kinds of human error.” And, in response to employees’ desire for more continuous feedback from their manager and peers, a GE team had built a simple MVP for enabling real time 360 feedback; but when they tested the tool, they found that absolutely nobody used it. “What we discovered is that it had absolutely nothing to do with the tool,” Janice shared. Instead, employees “were like, ‘Well, I don't know how to give my peer feedback. I've never done that before. I can't really give my manager feedback. How is he or she going to take that?’” The team learned that they didn’t need to build a better product. It “was much more [about] training around the behavior.”
LESSON #5: Build-measure-learn with an innovation thesis.
According to Tendayi Viki, 54 percent of companies struggle to bridge the gap between innovation strategy and business strategy. He suggested starting by adopting a build-measure-learn loop for your innovation strategy. Here is the step-by step process that he outlined in his presentation:
First, sit down with your team and develop a point of view on where the world is going. Ask “what are the trends that are impacting our business? And what are the things that are coming up in the future that we think we need to respond to? What products in our portfolio are declining that we need to fix?”
Then, decide how you will use innovation to respond to these challenges; this is your innovation thesis. Tendayi explained, “It's actually based on the venture capital notion of investment thesis. If you're a venture capitalist, the whole time you're getting pitched a lot of ideas by a thousand people. You can't invest in everything, so you have to make a decision about the kind of things you invest in and the kind of things you don't invest in.”
Once you have a thesis, every project you support becomes an experiment testing it, and you should review it on a quarterly or biannual basis and change it as needed. This approach also structures your budget decisions. “Not a single dollar moves from the company's bank account into some project except when it’s a specific expression of [your] strategic intentions. There's no let's-see-what-happens dollar. Every dollar moves as an expression of [your] strategic intentions.”
LESSON #6: Fall in love with your problems, not your solutions.
“I always thought, ‘How are we going to affect this organization whose heritage is world-class innovation?’ reflected David Kidder during his interview of Procter & Gamble CTO Kathy Fish. Reflecting on how Lean Startup methodologies have changed P&G, Kathy shared that “when you fall in love with the problem and not the solution it opens your mind up in a really different way. So we would typically fall in love with the solution, which would always be a product … As you fall in love with the problem, you start seeing business model opportunities; you start seeing marketing and education opportunities in addition to product opportunities, and it's just much, much richer.”
Focusing on the problem first has also proven cost-effective. Before working with Lean experimentation, the company was “spending a lot of money sometimes before we really should have,” Kathy said. “We've now shifted to a more metered funding approach . . . And we're finding on some of our biggest programs that we're learning faster; we're getting to the consumer a lot faster; and we're spending 25 to 50 percent less money along the journey. It's amazing.”
LESSON #7: Create peak moments.
While Kathy encouraged companies to embrace their problems, co-author of The Power of Moments Chip Heath asked the Lean Startup crowd to create peak moments, or moments that evoke an emotional response. To illustrate his point he told the story of the second highest rated hotel in Los Angeles on TripAdvisor, the Magic Castle. Number three is the Four Seasons. The Magic Castle’s secret is not their shoddy bathrooms, but their butler popsicle service, free candy at the front desk, and free laundry—peak moments.
In Chip’s “toolkit for creating a happy face” are four elements. The first one is elevation. “Elevated experiences are experiences that bring us up in sensory experience to something that rises above the day-to-day.” Chip’s examples included fireworks, sunsets, and cupcakes. The second element is insight. Chip shared the story of the executive who displayed the 424 kinds of gloves his company was buying to help his senior leadership team realize they had a procurement problem.
The third peak element is pride, and finally, there is connection. John Deere redesigned their employee orientation day to achieve both. The welcoming process starts with a personal text before your first day and includes a welcome email from the CEO letting you know that “on your desk is a model of the very first patented plow that John Deere manufactured" 175 years ago. “There is not better leverage than an employee orientation day at John Deere,” Chip said. He advised creating peak moments when you are bringing people onto a team, when you need alignment on direction, when you need people to get along, and when you need to show people how to act.
From startup hiring to enterprise alignment, Lean Startup Week offered learnings for a wide range of entrepreneurial thinkers, but as Eric noted in his opening remarks, one theme was clear: “We have to be thinking about how do we sustain our innovation into the next, and the next, and the next generation. In order to do that … we need to adopt the idea of the startup as an atomic unit of work.” We need to keep learning from the startup way.
This was originally published on Lean Startup Co.'s blog.
Since The Startup Way came out on October 17th, I’ve had a great time traveling with the book, speaking to audiences, and meeting amazing people creating change in all types of organizations. From New York, Philadelphia, and Boston to Los Angeles and San Francisco, entrepreneurs came out to share their enthusiasm -- you really are everywhere. Some great new reviews and interviews from smart, generous readers since my last post:
- Don’t let your hot startup grow into a sluggish, old-fashioned company (LinkedIn Weekend Essay)
- Digital Magic: How Eric Ries Brought The Startup Way to GE (GE Reports)
- The Startup Guru Who Wants Everyone to Think Like a Founder (Wired)
- How Creating An Entrepreneurship Function Can Help Sustain Corporate Innovation (Forbes)
- How to Turn Your Lumbering Dinosaur of a Business Into a Nimble Butterfly (Inc.)
- The missing function of entrepreneurship in most companies, creating a new accountability paradigm, and how to structure promotions and compensation in the new structure (Twenty Minute VC Podcast)
In addition to all the great press, I was honored to see the book make the Wall Street Journal bestseller list in its first week on shelves.
Next stop on the book tour: London. My UK publisher has put together a packed schedule and I can’t wait to talk about The Startup Way across the pond. You can learn more about each event and access tickets at the links below:
Nov 13 | Tech City Nations | 6:00pm | Cass Business School In conversation with Ingrid LundenNov 14 | TechHub | 5:00pm | TechHub London Live coaching hosted by Elizabeth Varley, Founder & CEO TechHubNov 14 | Campus | 7:30pm | Google Campus London In conversation with Sarah Drinkwater, Head of CampusNov 15 | Bookomi / How To Academy | 9:00am | Emmanuel Centre Digital read-along and book discussionNov 15 | Business of Software | 6:00pm | Emmanuel CentreNov 16 | London School of Economics | 6:30pm | Old Theatre In conversation with Dr. Lourdes Sosa
Back in the US, the first printing of the hardcover edition is selling fast, but if you buy one now you can still get all the bonus content we’ve created, accessible only with a unique code printed inside the first edition US print run.
Bonus content includes:
- A five-part video series introducing the key concepts and methods of The Startup Way
- A case study on hiring and onboarding at hypergrowth startup Gusto, not included in the book
- Bonus MVP examples courtesy of Intuit
- A downloadable visualization of The Startup Way
- A workbook to generate and analyze MVPs in your own organization
- A primer on innovation accounting and its key metrics and questions
- Access to The Leader’s Guide online community, a network of new and experienced lean practitioners
We’ll be adding more content over time as well, so be sure to pick up your hardcover copy while supplies last. Don’t forget to tweet a photo of your book to see it on thestartupway.com
Thank you, as always, for your support. I can’t wait to hear more about how you use the #StartupWay in your work.
A few thing as we move into Week 2 of my book tour:
I'm now in Los Angeles and San Francisco to promote The Startup Way. If this week is anything like the last, attendees are in for great events.
If you're in those cities, I hope you'll join me:
10/24 | Los Angeles, CA | 8:00pm | Ann and Jerry Moss Theater In conversation with Mark Suster, Managing Partner at Upfront Ventures
10/25 | Los Angeles, CA | 7:45am | Cross Campus Downtown LA In conversation with Krisztina Holly, Founder of MAKE IT IN LA10/25 | San Francisco, CA | 4:30pm | Bunker Labs Muster @ Slack HQ
In conversation with Todd Connor, Founder and CEO, Bunker Labs10/25 | San Francisco, CA | 6:30pm | Commonwealth Club of San Francisco
In conversation with Todd Park, former US CTO
Speaking of events! An important reminder: Lean Startup Week is in San Francisco October 30 - November 5
The Lean Startup Week team has been working around the clock to put together a program that will suit the needs of any entrepreneur in any organization, all themed around The Startup Way. Whether you're a student or the head of a division at a large company, we have a package to help you get the most out of the conference. You can see the full program agenda here and register for the package that suits your needs here. See you there!
Here’s a round up of early media for The Startup Way
Teaching GE to Think Like a Startup (Fortune)
Eric Ries: Why Companies Need To Create An Entrepreneurial Culture (Forbes)
In Eric Ries’ new book, he tells companies to turn every unit into a cash-strapped ‘startup’ (TechCrunch)
How companies can keep their 'start-up DNA': Eric Ries (CNBC Squawk Box)
Why big companies need to innovate like entrepreneurs (Wired UK)
EDITOR'S CHOICE: The Startup Way (800CEOread) (a terrific in depth review)
Silicon Valley Vs. Wall Street: Can the New Long-Term Stock Exchange Disrupt Capitalism? (WSJ) (nice piece about our efforts with The Long Term Stock Exchange)
One final reminder!
Each copy of the first printing of the hardcover edition of The Startup Way in the US and Canada contains a unique code that grants you access to bonus features at thestartupway.com/bonus. Register with the code in your copy to get access to a five-part video series, a visualization of The Startup Way, bonus MVP examples courtesy of Intuit, and more.
If you're outside the US or purchased via Kindle or Audible, sign up on the site without a bonus code and you'll receive some bonus materials as well.
As always, thank you for your support, and I look forward to hearing what you think as you delve into the book.
Today, my new book, The Startup Way, finally hits bookshelves! It's a huge day for any author, but I also hope it can be a huge day for the future and growth of the startup movement and for the future of our country.
I want people to use my book as a way to start conversations about the critical roles of innovation and sustainable growth everywhere from startups to large corporations to public policy. Together, these institutions can help transform the United States into a thriving entrepreneurial nation that supports and values all of its citizens. The success of the startup movement is about so much more than making cool new products; it's about adapting our country for an uncertain future that holds as many opportunities as it does challenges.
In order to start those discussions, though, people need to read the book. I've always found that the best book recommendations come from the very same source that has powered the startup movement so far: smart, creative, busy people. People like you. We have so many ways of getting information today, and I would really appreciate you using any channel you feel comfortable with to tell your friends and colleagues about The Startup Way. Here are a few suggestions for spreading the word:
1. Share the book socially. Conversations at cocktail parties or over the dinner table are welcome, as, of course, is social media. If you do post online, it would be great if you tag your enthusiasm with #StartupWay. I've included some ideas below and encourage you to create your own based on your experience with the book.
• Insights on how continuous innovation leads to continuous transformation in @ericries new book The #StartupWay. http://bit.ly/2y3lIeY
• The #LeanStartup has grown up to become The #StartupWay, w/innovation framework for orgs of every size. Out now! http://bit.ly/2y3lIeY
• Entrepreneurial mgmt is difference btwn modern & old fashioned co’s. @ericries new book #StartupWay shows why. http://bit.ly/2y3lIeY
2. Write a review on Amazon. The book got some amazing blurbs in advance of publication, but reader reviews also have a huge effect on the buying decision. If you enjoy the book it would mean a lot if you could take a few minutes to write a positive review. Thank you!
3. Pick up a copy. Or five! Every sale makes a difference, even more so if it's from a local retailer, and the first week's sales can make or break a book's trajectory. I encourage you to grab copies for you and your colleagues. We’ve created resources on the Startup Way website for people who buy the US hardcover edition -- there’s a code in each book -- that I hope will help facilitate group discussions.
I am deeply grateful for your support throughout this process. It was an honor to see the impact that The Lean Startup had on so many and to have the support of such terrific friends and readers. I’m hoping The Startup Way will continue that conversation and am so glad to have you along for the ride.
For eight years, our flagship conference has focused on sharing stories and lessons of putting Lean Startup’s entrepreneurial methodology into practice. We’ve hosted talks, workshops, and interactive sessions on the challenges and successes of modern management techniques from a wide variety of business leaders around the world. Lean Startup Week (Oct. 30 - Nov. 5 in San Francisco) allows you to experience seven days of interactive innovation training from our experts and true Lean Startup practitioners—in a city that’s known for being the hotbed of high-growth startups and iconic tech companies (not to mention a great place to eat, drink, sightsee, and shop while you’re talking shop).
This year, we’re really honing in on the feedback from our past conferences, as well as our smaller, more focused conferences in New York and London this year. What we heard was that you want more opportunities to have your specific challenges answered—so to that end, we’ve added new sessions where you can ask our experts your questions directly, including Roundtable Discussions and Live Office Hours with Eric for all attendees, along with our regularly popular sessions such as Speed Mentoring, Networking Dinners, and our Women’s Breakfast. We’re also working very closely with all of our speakers to ensure that the expert knowledge they impart is not only in line with Eric’s new book, The Startup Way, but focuses on actionable takeaways.
We want you to leave Lean Startup Week feeling like you understand your next steps when you’re back at your office trying to put all the pieces together. Because while it’s great to feel inspired after a conference, we can have a bigger impact when we leave you feeling empowered to make entrepreneurship a core function of your organization. And that kind of empowerment only comes when you have 90+ speakers and mentors offering you practical, actionable knowledge, learned from their time in the trenches.
Here are some of the specific things we want to help you tackle:
- Connecting with like-minded entrepreneurs and experts who share your challenges and concerns
- Turning an old school-minded organization on to modern entrepreneurial management techniques
- Starting and scaling an innovation practice in your organization
- Connecting Lean methodology to hiring, team-creation, organizing boards, leading engineering teams, and more
- Ensuring your organization remains committed to innovation practices as you grow
We’ll help you with these solutions by approaching them from a variety of formats:
- Learn by Doing (click here to see how)
- Learn by Example (click here to see how)
- Learn from Experts (click here to see how)
- Learn from Your Peers (click here to see how)
- A rare workshop with Eric Ries (co-led by Lean Startup Labs senior faculty member Marilyn Gorman) on enterprise transformation using the Lean Startup way on Oct. 31 (limited to the first 200 Gold Passholders.) Side Note: Eric and Marilyn will be doing a webcast as a preview to their workshop on Oct 11. Sign up for free here.
- Justin Rosenstein, co-founder of Asana, presents a new approach to thinking about your startup's culture from the ground up, mapping the idea of intentional culture design to the familiar tenets of product research, design, and management
- Tim O’Reilly, founder & CEO of O’Reilly Media, discusses how to avoid getting sucked into the vortex of me-too thinking by ensuring all the parts of your business work together, a theme from his new book, WTF? What’s the Future and Why It’s Up to Us
- Anil Dash, CEO of Fog Creek Software, on mindfully building modern companies in a more humane and ethical way
- Chip Heath, best-selling author & Stanford Graduate School of Business professor, on The Power of Moments in creating organizational change
- Zach Nies, VP of Education at Techstars & Marcus Gosling, VP of Product at Long-Term Stock Exchange, co-host Startup Office Hours, an interactive Q&A where you can ask the experts your questions on sustainably implementing Lean Startup and other like-minded methodologies into your growing business
- Vanessa Colella, Head Of Citi Ventures & Chief Innovation Officer, Citi, on how Citibank uses growth boards to provide seed funding to internal startups
- Alex Osterwalder, co-founder of Strategyzer, on protecting your organization from disruption
- Eric Ries & GE FastWorks Co-Founders Viv Goldstein & Janice Semper on GE’s Startup Way strategy
- Bionic CEO David Kidder and Procter & Gamble CTO Kathy Fish on P&G’s innovation pathway
- Making diversity & inclusion an actionable, trackable metric at your company with industry thought leaders, including eBay’s Helen Kim, CodePath’s Michael Ellison, Pivotal’s Michele Perras, and Intuit’s Cassie Divine
- Innovation, Impact & Design Thinking for social good with IDEO.org
Sounds great! So how to attend?
If you haven’t been to one of our Lean Startup Conferences, this is the year you won’t want to miss. So get ready to take selfies with the Bay Bridge, snag a burrito in the Mission district, and step foot into some of the hottest tech companies up and down Market St. We have passes for all budgets:
Gold Pass - For those who are serious about diving deep into the Lean Startup methodology and getting hands-on experience, join us for the full seven days of innovation training at Lean Startup Week (Oct. 30 - Nov. 5). This is perfect for teams looking for their best off-site yet! Register here.
Silver Pass - For those who are tight on time but want to get highlights of what we offer, get access to the two-day main conference on Nov. 2 & 3 and a seat at our Ignite Opening Night on Nov. 1.
Bootstrapper Pass - Offers the same benefits as the Silver Pass, but brings the cost of the conference down to $350 for people who otherwise wouldn’t be able to attend (think: fledgling solopreneurs, employees at very young startups, and small non-profits). Apply for a Bootstrapper Pass here.
Livestream - Because we’re all about community building, we invite you to host or join one of our free livestream meetups. Get details here. You get all the mainstage talks and the most popular breakouts, along with access to live Q&A and moderated chat.
Volunteer - If you’re a student, you can apply to volunteer here. Pitch in for a shift, and we’ll give you a Silver Pass.
We hope you’ll join us in San Francisco at the end of this month!
In just a few weeks, my new book, The Startup Way, will be available in print, digital, and audio formats.
One of the most gratifying parts of writing a book is heading off on tour with it and finding out how it’s engaging actual readers. Some of the most inspiring conversations I’ve had about my work have happened at book events, and I’m looking forward to more of them. I can't wait to get out on the road with The Startup Way and talk to you about the methods and principles of modern management.
Here’s the current list of my planned stops. If your city is on the list, come by and say hello! More information and tickets available at the links below:
10/16 | Philadelphia, PA | 6:45pm | Prince Theater
In conversation with Adam Grant, author of Give and Take, Originals, and Option B
10/17 | New York, NY | 12:00pm | Grand Central Tech
10/18 | New York, NY | 7:00pm | The Strand
In conversation with Beth Comstock, Vice Chair of GE
10/19 | Cambridge, MA | 7:00pm | First Parish Church
In conversation with Tom Eisenmann, Harvard Business School professor
10/24 | Los Angeles, CA | 8:00pm | Ann and Jerry Moss Theater
10/25 | Los Angeles, CA | 7:45am | Cross Campus Downtown LA
10/25 | San Francisco, CA | 6:30pm | Commonwealth Club of San Francisco
In conversation with Todd Park, former US CTO
Meanwhile, I’m offering early access to a special 5-part video series on The Startup Way for those of you who pre-order. Enter your order confirmation information at bit.ly/thestartupway to see the videos. I had a great time exploring another medium for sharing my ideas and hope you find the series beneficial in advance of the release of the book. I can’t wait to hear what you think. Join me on Twitter using #StartupWay to share your reactions.
“If The Startup Way can transform the federal government—and it has—it can transform your company. For everyone who's thought 'there has to be a better way,' here's your proof and a playbook to make it happen.”
-- Jennifer Pahlka, Founder and Executive Director, Code for America
Finally, the 2017 Lean Startup Week is themed around The Startup Way. October 30 through November 5, we're gathering thousands of thought leaders in downtown San Francisco for a week of keynote talks, interactive workshops, speed mentoring, roundtable discussions, industry dinners, innovation bootcamps, and startup tours. You'll take in the book's concepts and learn from technology thought leaders like Tim O'Reilly and Anil Dash, seasoned enterprise leaders including Viv Goldstein and Janice Semper of GE, founders of high-growth startups like Justin Rosenstein of Asana, government innovators from the NSA and 18F, and non-profit practitioners deep in the trenches. Plus, every attendee will receive a copy of the book. I hope you'll join me there.
“Think big. Start small. Scale fast.” This is the mantra of Lean teams described by Eric Ries in his upcoming book, The Startup Way. Whether you’re struggling in an actual startup or trying to build an internal one at an established organization, a Lean team approach can maximize efficiency and results in uncertain times. But assembling a group that can execute on this vision comes with the routine challenges of team-building as well as questions unique to the methodology. Drawing on the advice of experts and recent research, here are seven insights on how to best build a Lean team.
Eric often refers to Amazon’s “two-pizza team,” which means starting small when it comes to new innovation groups, aiming for a number that you could easily feed with just two pizzas. A tighter team provides several advantages. First, small groups typically bond faster, leading to better communication within the team. Second, with fewer decision-makers, experiments can happen faster. There is also greater accountability because it’s easy to know who’s doing what.
Make your team cross-functional.
Just because the team size is diminutive doesn’t mean its skillset should be. A hallmark of Lean teams is cross-functionality. Members should bring a diversity of skills and/or represent different departments within the company. In enterprise organizations, teams are often comprised of employees from the same department, and once their work is “completed,” the results are passed along to another department. This siloed approach is inefficient, and the lack of varied perspectives often results in subpar solutions.
To build a cross-functional team, Eric suggests starting by asking what departments are needed to make meaningful progress that won’t get roadblocked along the way. In The Startup Way, Eric provides the example of an industrial project that might require a product designer, someone with manufacturing expertise, and a salesperson who understands customers’ wants and needs. An IT project, on the other hand, might include an engineer, a designer, and a marketer. As Eric says in the book, “There are endless permutations, depending on what needs to get done.”
Every team leader should also know whether you’re planning to do something that could require approval from legal. If so, be sure to include a representative from that department to prevent delays. Another tip from Eric: If you lack the budget or influence to get someone from a necessary department assigned to your team, ask for volunteers.
Don’t over-rely on your natural team players.
Relying on the same employees to contribute to teams can create collaboration overload, which in turn negatively impacts work satisfaction and productivity. A study published in Harvard Business Review found that typically 3 to 5 percent of employees contribute 20 to 35 percent of effective collaborations, but “those seen as the best sources of information and in highest demand as collaborators in their companies—have the lowest engagement and career satisfaction scores.” According to the researchers, simple solutions for avoiding collaboration overload is to cancel unnecessary meetings and to let individuals who are most often tapped for teams know it’s okay to say no and to suggest another capable person to take their place.
Train people to be team smart.
To ensure that every employee can excel in workgroups, invest in team training. “[Companies] focus a lot on professional development at the individual level. They have robust programs for people, but they won't necessarily be focused on teams,” says Janet Brunckhorst, principal product manager at Carbon Five. Employees and managers are rarely educated in how to be an effective contributor or how to make a better team. In short, many companies are team dumb, which is a problem because there’s evidence supporting the idea that a team’s collective intelligence is independent of the intelligence of its individual members.
Even if a company has the smartest employees, its teams can fail. In research published in the journal Science in 2010, psychologists from Carnegie Mellon, M.I.T. and Union College found that what they label the “c factor” (another term for collective intelligence) is correlated with “the average social sensitivity of group members, the equality in distribution of conversational turn-taking, and the proportion of females in the group.” The same research suggested that a team that failed at one thing was likely to fail at every task it attempted. A simple way to increase your team’s c factor is to bring in someone versed in guiding groups through the best practices of teamwork and Lean methodologies, whether that’s an internal leader or an external coach.
Create a pro-risk environment.
Finding innovative solutions and creating breakthrough products requires bold ideas and often big missteps, so individuals on Lean teams must learn to welcome risk and failure. Creating this mindset can be challenging in a traditional failure-is-not-an-option environment, and the dynamics of a team can exacerbate the desire to play it safe. (Nobody wants to look foolish in front of their colleagues.) However, with some psychological insights and pragmatic tools, teams can be coached to feel good about taking risks and failing.
“There are lots of things that carry through all teams. Mostly, that we are all human, and the psychological and behavioral patterns are the same,” says Carbon Five’s Janet Brunckhorst. While it may seem obvious, the insight is often overlooked. Companies often focus on expertise or personalities when selecting team members, but research suggests that any group of people can succeed if the right atmosphere is created.
Google’s Aristotle Project, an effort launched by the company in 2012 that surveyed 180 of their teams to better understand what made them work, found that the key to a highly-functioning team was psychological safety. In a 2016 New York Times article discussing the Aristotle Project, Abeer Dubey, a manager in Google’s People Analytics division, said, “The ‘who’ part of the equation didn’t seem to matter.’’ In other words, it wasn’t about the balance of skills or diversity of personalities. Instead, high performing teams shared two characteristics: 1. Members contributed to conversations equally, and 2. They were adept at interpreting how others were feeling based on nonverbal cues and addressing those feelings. Creating this type of environment does not come with a one-size-fits-all approach, but Google found that simply sharing the research findings inspired teams to work differently.
People also need to know that their decisions will not result in the loss of millions of dollars or litigation. This is an idea that Courtney Hemphill, partner at Carbon Five, calls reversible risk. It means that teams understand what can be undone. “Teams need to have a reverse button,” she says. “Productive teams are able to say, ‘Well, that didn’t work. Let’s fix it, learn from it, and not do it again.’ But then continue to make decisions and move quickly.” If a team can define its reversible risks, people are less likely to get bogged down in a blame game.
Understanding what your team needs means understanding their assumptions.
Everyone comes to a team with certain assumptions about how work gets done, how to communicate, and a million other things. To function as a cohesive unit, people need to understand what assumptions they are working with. “In a team, there may be someone interrupting and talking all the time, and your assumption might be that they’re a jerk,” says Christina Wodtke, principal of her firm, Wodtke Consulting, and professor at California College of the Arts and Stanford Continuing Education. “Everybody is walking around with an idea of how you are supposed to behave in business, and it is not the same idea, believe you me.”
For this reason Christina recommends that every team create a charter of norms: “Norms are just, ‘How do we agree we are going to work together? What are we going to do when we disagree? Are we going to make proposals? Are we going to just fight it out? How do we make a decision?’” To help develop a team charter, she suggests starting with the eight scales outlined in Erin Meyer’s book The Culture Map. The scales address expectations surrounding communicating, evaluating, persuading, leading, deciding, trusting, disagreeing, and scheduling.
Measure to learn and improve your team. Whether you’re starting a new team or trying to improve an existing team, “you can’t really take your first step without looking at the team and measuring,” Janet says. This could mean tabulating assumptions, as with The Culture Map scales, or assessing the current sentiment—in other words, how do people feel about the team spirit. “It could be something as simple as every time you have a team meeting, doing a team temperature gage—a one-to-five scale or thumbs up/thumbs down,” Janet says. From there, the important thing is acting on that information. For example, understanding why a team may be feeling closer to a one, and then working to remedy the problem. Fundamentally, it is applying the Lean Startup methodology of build-measure-learn to your team dynamics.
Although teams vary across companies, an effective Lean team should start small and be cross-functional. Creating clear ground rules, working to ensure everyone contributes, and checking in regularly to assess how individuals are feeling helps create a productive working environment, and from there, you can continually fine-tune based on feedback. Accept that you will have to iterate your team because effective teams are committed to continuous improvement. “It means never accepting your team as done,” says Christina.
To learn more about building Lean teams, join us at Lean Startup Week October 30th - November 5th in San Francisco. Christina Wodtke, Courtney Hemphill, and Janet Brunckhorst will be leading breakout sessions on crafting effective teams.
This post was originally published on Lean Startup Co.'s blog.
In the opening paragraphs of Eric Ries’s upcoming book The Startup Way, Eric sets the scene: He arrived at GE in the summer of 2012 amidst a multi-hundred-million-dollar, five-year plan to develop a new diesel and natural gas engine. He knew next to nothing about the engine but a good bit about entrepreneurial management, and GE Chairman and CEO Jeffrey Immelt and Vice Chair Beth Comstock thought the insights he’d developed in The Lean Startup could ensure that the plan would succeed.
And the plan did succeed. GE released the test engine, known as Series X, sooner than originally anticipated and immediately received an order for five engines.
It was the start of a partnership that lasted several years and transformed GE’s business practices while also inspiring the company’s FastWorks program. It demonstrated to Eric that Lean Startup methodologies could help organizations of all sizes, and it inspired GE to train every CEO and top manager in what Eric now calls the Startup Way, which he explains in the book “combines the rigor of general management with the highly iterative nature of startups” and incorporates several Lean Startup processes.
The Startup Way includes several learnings from Eric’s work with GE (among other enterprise and high-growth organizations) and Marilyn Gorman was part of the original team at GE that worked with him to build training for senior leaders. Today, she is senior faculty at Lean Startup Co. and travels the world providing businesses with innovation tools and training. As a special treat for our community, Marilyn and Eric will be co-facilitating a limited-capacity workshop focused on The Startup Way during Lean Startup Week (Oct. 30 - Nov. 5) this fall.
As a teaser for that workshop, below are a few lessons Marilyn has learned about teaching an established corporation to practice the Startup Way, along with additional insights from the book.
You need a leader. The subtitle of The Startup Way is: How Modern Companies Use Entrepreneurial Management to Transform Culture and Drive Long-Term Growth. Understanding fundamental distinctions between “modern companies” and “old-fashioned companies” is an important first step in refashioning management in a large enterprise. One of the many distinctions Eric points out is that an old-fashioned company “is composed of managers and their subordinates.” But a modern company “is composed of leaders and the entrepreneurs they empower.”
Marilyn knows this truth firsthand. “A lot of people are saying, ‘We’re trying to drive a change to a more entrepreneurial mindset from the bottom up,’ and while it is important to start with small teams, you do need leader support. It is critical,” she says.
Without a commitment to a new approach from higher-ups, teams tasked to work with Lean Startup methodologies are more likely to be blocked by existing procedures and expectations. For example, being told, “There is no budget,” shuts down a project pretty quickly. As Eric recounts in The Startup Way, when working with GE, he asked teams to be honest about what they really needed, and “many of them simply needed senior leadership’s assurance that if they worked in this new way they wouldn’t be eaten alive by middle managers.”
Be ready to change more than your scorecards.“I had companies call me when I was at GE and say, ‘Tell me about how you changed your performance management approach,’” Marilyn says, “and I couldn’t do it without talking about the Lean Startup mindset of building, measuring and learning. People would sometimes reply, ‘We just want to change how we score people at the end of the year,’ but there is no shortcut for implementing a Lean Startup approach.”
Marilyn recalls that as GE started to implement Lean Startup practices, management began to recognize that there were systems and processes that stood in the way of being successful. “Corporations have lots of policies in place to reduce risk and to put out as perfect a product as possible, but Lean Startup is all about taking risk and putting test products in front of customers,” she explains. “The natural evolution was realizing that we needed to change other things inside of the company.”
GE’s realization reflects two of the five key principles of the Startup Way: continuous innovation and the missing function of entrepreneurship. Leaders often want one key innovation that will unlock unrealized potential, but companies should be focused on developing a method for finding breakthroughs as a sustainable part of their long-term pathway.
However, without embracing entrepreneurship, long-term growth driven by new products is unlikely. In the book, Eric recommends starting by making entrepreneurship a core discipline, which means ensuring that someone is responsible for it on the org chart just as departments are responsible for marketing and finance.
Start with, “What can we do.”Of course, a fully functional Startup Way practice will take more than a box on an org chart. Ultimately, every department will be asked to work a little differently, and that requires some tough conversations across an organization. “Often the conversation will start with, ‘Here is what we can’t do,’ and in fact, the focus needs to be on what you can do,” Marilyn advises.
In the book, Eric shares the story of a leader who realized that the legal department was preventing rapid innovation, and he wanted a solution. He facilitated a meeting with everyone in the legal department. The legal team actually lamented having to always tell people no, but felt constrained by rules and regulations. The solution: a one-page document that laid out a series of parameters within which teams would be pre-cleared to experiment with new ideas. By working with the legal team to brainstorm what could be done, the company was able to speed up product development.
When things get hard, eat chocolate. “Making this kind of profound change to an organization’s structure is like founding the company all over again, whether it’s five or a hundred years old,” Eric reflects in The Startup Way. It is what he calls “the second founding,” and founding a company is not easy work.
“It’s hard, and it’s going to take time. But, chocolate helps,” Marilyn jokes. Plus, it is worth the effort. “At GE, we started to work faster and simpler. We were learning more quickly about opportunities for success and what opportunities would fail, so we could stop wasting time on them. It definitely had a positive impact.”
Join us at Lean Startup Week October 30th-November 5th, where Eric Ries and Marilyn Gorman will co-lead a 4-hour workshop focused on "The Startup Way". It will give participants an opportunity to consider some of the challenges of bringing Lean Startup practices into an enterprise and address what it takes to scale and deploy new approaches in their own companies. Participants will also receive a workbook featuring tools that they can use to implement the Startup Way. You can pre-order "The Startup Way" here.
Lean Startup Week has it all: keynote talks, hands-on workshops, networking opportunities and lively flashes of inspiration from our extended community in the form of Ignite Talks.
Yup, our Ignite Talks are back because you all love filling your heads with new ideas over cocktails—and apparently dozens of savvy founders, intrapreneurs, city planners, retailers, and consultants are just dying to become performers with five minutes in the spotlight. Our brave Ignite presenters use their stage time to deliver lightning talks (and, occasionally, witty musicals) on the theme of innovation.
So we’ll spend happy hour on November 1st watching them breeze through 20 slides (that automatically advance every 15 seconds) while extolling their wisdom in an entertaining fashion about topics ranging from:
- Barry O’Reilly from ExecCamp throwing down the challenge to reinvent your business to beat the average company lifespan
- Nicole Shephard from Travelport Labs describing the fail shots that led to wins at a $2 billion travel tech company
- Kelly McAdoo from the City of Hayward outlining the importance of using Lean Startup methodology to empower government employees and improve resident satisfaction
- Beth Sordi of BabyCenter comparing raising children with creating space for new ideas
- Peter Szanto of SpringTab detailing how to connect with your most loyal customers through personalization
- Consultant Ranjit Das mapping out how companies can develop a collaborative ethos by overcoming existing cultural baggage
- Bhavin Parikh of Magoosh offering his company as a case study in successfully bringing Lean Startup principles to life
- Consultant Tami Reiss revealing the secrets behind Gmail plug-in Just Not Sorry getting $100k in 30 days using the core tenets of Lean Startup
We don’t want to give away the whole program just yet, but as a hint, our Ignite Talks presenters also include Monty Campbell (Lean Mobile Apps), Lynn Johnson (Spotlight:Girls), Janet Bumpas (InnoLeaps), Cindy Peterson & Janel Wellborn (Macy’s), and consultant Charu Nair.
Ignite Talks are the perfect way for attendees to experience the breadth of Lean Startup in one session. It’s your chance to hear from founders in all industries talking about how they applied Lean Startup in short dynamic presentations. It’s also one of many group activities at Lean Startup Week—from the Ignite Talks to a 5k run, yoga classes, and our networking dinners, we’re offering plenty of opportunities to break from the typical conference status quo and have some fun while you learn.
Join us Oct. 31-Nov. 6, 2016 in San Francisco for Lean Startup Week. Register before August 31 and save up to $700.
Some exciting news about this year’s Lean Startup Week (Oct. 30-Nov. 5) for all you potential speakers out there: we’re shaking things up in 2017. The flagship conference is directly tied to Eric Ries’s upcoming book, The Startup Way, and we’re hosting the event at two locations in downtown San Francisco (The Warfield and The Village). We’re bringing to life new case studies, advanced strategies, and inspiring areas where Lean Startup is making an impact around the globe, with an emphasis on how to put the practice into place for the long haul at large organizations—from the tiny startup that ballooned to the government or corporate team that’s only known extra large operations. If you’ve ever considered applying to speak at our conferences, now’s the time to go for it. This year will be a biggie for the Lean Startup community.
What We’re Looking For
This part hasn’t changed. We’re passionate about bringing in fresh stories about how Lean Startup methods are being practiced in startups and established companies, nonprofits and civic organizations, and other areas we’ve yet to explore from the stage.
Our goal is to bring the most interesting, relevant, and impactful stories to the conference. We’re looking for practitioners who are doing the real work, particularly women and people of color, and specifically Lean Startup practitioners working at the intermediate and advanced levels. That’s where you come in—especially if you haven’t spoken at our conferences before. As a speaker, you’ll have the opportunity to share your advice, insight, failures, and successes in order to help and benefit from the Lean Startup community.
What is Your Lean Startup Story?
If you have Lean Startup experience to share, we encourage you to propose a talk via our Call For Proposals form regardless of whether you have public speaking experience. Submit your idea as a short video, ideally under three minutes. iPhone videos are totally acceptable, just make sure the sound quality is high enough that we can hear you. Here’s an example of a speaker application that we loved.
There are a limited number of spots available to speak. Below, you’ll find a few helpful tips on how to submit a proposal:
- You don’t have to be a Lean Startup all-star to apply. You just need a good story, useful tips for intermediate/advanced practitioners, compelling advice, or practical applications to share.
- The core of your proposal should be simple. Focus on answering one of the questions posed in the Call For Proposals form (you’ll find them on page 2).
- Deliver the pitch in your application as though you’re speaking from a stage. Although there’s still time to practice, stage presence matters.
Would You Rather Attend?
Lean Startup Week is the best way to connect with 2000+ other experts in the Lean Startup community. You’ll receive practical ways to immediately implement the Lean Startup methodology into your daily business. We’ve got a package for every budget (and options to bring your entire team at an affordable rate). Join us.
I’m excited to reveal the final cover for Eric’s next book, THE STARTUP WAY, coming October 17. I’ve been working with Eric since the IMVU days and designed the cover for The Lean Startup… I was excited to help with the new cover and, after months of testing different iterations, we’ve decided on a design that checks all the boxes that Eric, the Crown Business publishing team at Penguin Random House, and I wanted to hit going into this process:
- It’s eye catching, whether on a bookshelf or online storefront
- It demonstrates a clear evolution from The Lean Startup
- It captures the book’s message of entrepreneurial management
- And, of course, it tests well with buyers
The first drafts I showed to Eric and the team played with two graphics: an infinity symbol and a chevron. The infinity symbol represents the continuous innovation that’s possible within any organization, regardless of size. The chevron represented a clear path into the future through entrepreneurial management. While both are essential concepts to the book, the chevron was a clearer departure from The Lean Startup circle. We looked at a number of color treatments for both graphics and knew we wanted to test several options.
We also looked at the cover options in a field among other business books. It was important to know that our jacket would stand out to readers looking for the next great business book.
Once we decided to focus on the chevron shape, I started playing with the color scheme -- some variations on The Lean Startup scheme and some total departures. While anyone who caught a glimpse of the options had an opinion, I knew we wanted to test buyer decisions rather than simply survey friends and family.
We ran ads targeted toward business readers on Facebook with the four different cover variations shown above. Clickthrough was strongest on the red cover with silver in second. We tested the actual purchase decision on our testing site, thestartupway.co. The blue covers led the way, followed by red, then silver a distant fourth.
We realized we ran the Facebook ad with the cover on a dark backdrop while the testing site had a white background. Given most buyers are shopping online, we had to see how the covers would look in an online retailer’s storefront. As you can see on the CEOreads page above, the silver was quickly lost on the white background. I tweaked the color schemes to find a blue chevron we all liked and we moved forward with testing one red and one blue design.
Down to these two color schemes, I extended the chevron to the edges of the page, adding to the boldness and drama of the design. With that change in place, Eric had a new test in mind, one we had run while designing The Lean Startup cover.
Using a website called fivesecondtest.com, we showed participants one of the two bookshops above for five seconds. When the image disappeared, we asked which books they recalled seeing. 2/3 of all respondents named The Startup Way as one of the first three books they remembered, with participants shown the red cover slightly more apt to name the title.
Anecdotally, but interestingly, a few participants mentioned the “red book” or the “orange business book” while there were no comparable mentions for the blue cover.
We continued testing clickthrough on Facebook, where there wasn’t a discernible difference between the red and blue covers.
At the same time, we tested purchase decisions on the book landing site, where the red cover held a slight edge over the blue. Given the buying preference for the red cover (and my and Eric’s personal inclination for it, assuming testing didn’t show it to be a terrible option), we decided to move forward with the red design.
Once we were settled on color, I spent a Sunday afternoon, paintbrush in hand, modifying the brushstroke of the chevron.
The outcome of the paint party was an evolution in chevron design, from smooth to more energetic. Eric liked the options with more streakiness to the chevron; we both felt the streakiness indicated a work in progress. The busier the streaks became, though, the more the title became lost in the design.
While the silver title, much like the silver cover, would look great on a bookshelf we decided to see what it looked like in an online storefront vs. a white title. It was immediately evident that the white title popped off the page regardless of how streaky I made the chevron. While Eric and I continued to tweak, we stuck to a white title from then on.
We played with chevron angle, thickness, size, streakiness, and splatter. The above shows how far we’ve come from the first draft. We tweaked accent colors, font style, font size, and font spacing. Three and a half months after our first conversation about chevrons and infinity symbols, we’re excited to reveal the final cover for THE STARTUP WAY:
Thank you to the Crown Business team who managed the Facebook and five second testing, to anyone who preordered through the landing site (whether you knew you were part of the testing or not!), and of course to Eric for helping balance art and science in the design process. We can’t wait to hear what you think of the physical product when it hits shelves October 17!
I'm the CEO of a new company with a mission to fix the root cause of one of the worst problems plaguing our whole business ecosystem: the malign philosophy of short-termism that emanates from our public markets. We call this new company The Long-Term Stock Exchange (LTSE). Our goal is to create a new venue for great public companies to list on, one that uses its regulatory power to incentivize long-term thinking on the part of both managers and investors.
Although I've been working on this project for several years (I even wrote about in The Lean Startup). But I haven't wanted to become part of Silicon Valley's hype machine, and so our testing and experimentation have for the most part been quiet and behind the scenes. It's only now that so many people are involved that I felt it was time to be a little more public about it.
If you'd like to learn more, I've shared some details in a post on Medium. There's also an in-depth profile in the new issue of Bloomberg BusinessWeek (if anyone sees it in print, please send me a pic) as well as coverage on Quartz.
And, for a little blast from the past, here's the original passage in The Lean Startup that got this whole thing started:
As always, I want to thank all of you for your support. As the Lean Startup movement grows and spreads, I hope we continue to tackle bigger and more difficult problems. Let's solve them from first principles, at the root cause. I'll see you there.
The Lean Startup movement brings together the brightest minds in Silicon Valley to share the best advice for entrepreneurs, from entrepreneurs. AOL co-founder Steve Case, who just released his new book, The Third Wave: An Entrepreneur’s Vision of the Future, is one of the big thinkers we’re excited to team up with. Steve has a lot of insight into the ways innovative leaders can transform “real world” sectors (such as health, education, transportation, energy, and food), and their ability to change the way we all live and work.
You can catch Steve in an interview with our own Eric Ries this Wednesday, April 27th at the Commonwealth Club in Santa Clara. See event details here.
And if you haven’t devoured his new book yet, here’s a sneak peek of The Third Wave: An Entrepreneur’s Vision of the Future by Steve Case:
My brother Dan was just thirteen months older than me, and a year ahead in school. We shared a room growing up and, like most brothers, were fairly competitive. We hated to lose. That was especially hard for me, since Dan seemed to be good at just about everything he tried. He was the more natural athlete, and always at the top of his class. When I realized I couldn’t compete with him head-to-head, I tried to find interests apart from his. If he was going to play tennis, I decided, I was going to play basketball. But there was one interest we both shared that never felt like a competition. I wanted to be an entrepreneur, I was sure of it, before I even really knew what that meant. And Dan genuinely wanted to help. I got immense satisfaction from coming up with an idea, and he would revel in trying to help me turn it into something real.
We started our first business when I was ten years old. Dan was eleven, and brought to bear all of the wisdom of that extra year in our operation. We called ourselves Case Enterprises, and hoped that no one would notice that neither of us was old enough to drive. We billed ourselves as an international mail-order company. At one point we became the exclusive distributor in Hawaii for a Swiss watchmaker, though I can’t recall actually selling any watches. Most of our efforts involved knocking on doors trying to sell greeting cards to our neighbors. Most of our customers were buying what we were selling just to be nice. But Dan didn’t care. He called it our comparative advantage. Said it was part of our brand. We actually talked like this; our parents, a lawyer and a teacher, had no idea where we got it from. They used to joke that when I went to my room, I was going to my office.
Our early ventures may not have provided much in the way of cash, but they did provide a wealth of experience. And the process of coming up with new business ideas, or new ways to sell, left a deep impression on me. When I left Hawaii to attend Williams College in Massachusetts in 1976, I kept looking for new business opportunities. I started six little businesses while at school, including delivering fruit baskets to students during exam week (paid for by parents, of course). I had a growing interest in the music business, and spent a lot of time in New York clubs like CBGB, trying to find new talent to bring to college campuses.
I was diligent about going to class and doing my homework, but these side businesses were my real passion. That didn’t go over so well at Williams. At one point my advisor pulled me aside and suggested I was spending too much time on my entrepreneurial efforts, and would regret it. “Look at all the educational opportunities in front of you,” I remember him saying. “You should immerse yourself in them. Your business pursuits are distracting, and, frankly, they are ill-suited for campus life.” He wasn’t alone in thinking that. I remember one of my fellow students attacking me in a school newspaper editorial. “I swore I would never go to a Steve Case party or buy a Steve Case record album,” the article began. “It’s nothing personal, it’s just that I despise rampant laissez-faire capitalism on the college campus.”
In my final year at Williams, I took an introductory computer class. I hated it—and almost flunked it. This was still the era of punch cards, where you had to write a program and then take your cards to someone to run them. Several hours later, you’d get the results—which usually (at least for me) meant finding a mistake and starting the process all over again. The tedium, and the resulting low grade, almost prevented me from graduating. And yet the experience stuck with me. The punch cards were a nuisance, but if used the right way, they could be powerful. We were building very basic computational programs, rudimentary by contemporary standards. And yet even then, the potential was obvious. Computers were solving problems in seconds that would otherwise take days, even weeks. Frustrating as it was, in retrospect, I think it was formative. It was the first time I really began to grasp the potential of computers. Still, if I hadn’t stumbled upon Toffler’s book that year, I’m not sure I ever would have pursued the path I did.
With graduation approaching in the spring of 1980, all I could think about was breaking into the fledgling digital industry. I applied for a lot of jobs, always including, with my résumé, a cover letter breathlessly predicting the dawn of a digital age.
There were few takers. Most of my letters went unanswered. On a few occasions I did get interviews, but I rarely got past the first one. People seemed put off by my musings, worried that they were getting a nutty young kid who’d never be satisfied in a normal job. As the rejections piled up, I realized that my future would require my keeping my mouth shut—at least for a time. There was not much of a startup culture then, and of course no Internet, either. If I was going to get a job and learn any useful skills, I concluded, I’d have to join a big company. I eventually accepted a job at Procter & Gamble in the brand management department. It was a great place to land, all things considered. I could learn useful skills during the day while continuing to dream about the digital world at night.
If Procter & Gamble knew one thing, it was how to make a product understandable to everyday people. When radio serials were first introduced to the public, P&G saw an opportunity to advertise its home cleaning products to its key audience. So they began sponsoring programs, starting with Oxydol’s Own Ma Perkins back in 1933. They were known as soap operas. When the public jumped from radio to television in the 1950s, so did P&G.
The people I worked with were experts in understanding consumer preferences, doggedly pursuing R&D, and seeking breakthroughs that could give their products an edge against the competition. And they were world-class marketers, often ahead of their time. P&G was also responsible for pioneering the concept of giving away free samples to encourage trial use. (I later borrowed that idea when we launched AOL’s trial program and blanketed the nation with free trial discs.)
After a couple years of working at P&G in Cincinnati, I moved to Kansas to join Pizza Hut as Director of New Pizza Development. To this day, I’ve never had a better title.
My motivation was twofold: First, I was offered a healthy increase in salary and responsibility, and second, I thought it would be helpful to understand how a more entrepreneurial company worked. Pizza Hut was founded in 1958 by two brothers, Dan and Frank Carney, while they were still students at Wichita State University. It had grown from a single location at the corner of Kellogg and Bluff to become the nation’s largest pizza chain, which it accomplished largely by enabling franchisees to innovate. This bottom-up approach to innovation differed from P&G’s top-down style, and I wanted to understand it.
Originally, the job involved my working in the test kitchens in Wichita. But I advocated that we hit the road to find out what was happening throughout the country. My view was that, though innovation was possible within our walls, most of the innovation was happening beyond them. I created and led an advance team, and we started roaming the U.S., looking for a great idea to incorporate into the new menu. The company would send me to places like Washington, DC, put me up in the Four Seasons in Georgetown, and then task me with eating the city’s best pizza. There are worse ways to live. I did learn rather quickly how difficult it was to take something out of a test kitchen and then execute it across five thousand restaurants where the chefs were teenagers with limited skills. A lot of our ideas that made sense in theory flopped in practice.
At the time, one of the concepts we were testing was home delivery. This was 1982, and though pizza was popular, delivery wasn’t yet universal. We were also working on ways to make pizza more convenient and more portable. We spent a lot of time trying to figure out if calzones or pocket pizzas could work as a carry-out option for people on the run. It’s funny to think, looking back on that year, that the things we were focused on—convenience and portability—would become such crucial parts of the company I would later help build. So would our desire to keep things simple and focus on the basics.
I only lasted at Pizza Hut for a year. My obsession with Toffler hadn’t subsided; it had intensified. I wanted to be part of his vision. I needed to find a way in.
Liked what you just read? You can still grab a ticket to see Steve Case with Eric Ries: An Entrepreneur's Vision of the Future this Wednesday, April 27th. See you there!
Guest post by Kirsten Cluthe, editorial director of Lean Startup Co.
Speaking at Lean Startup Week offers renowned and emerging industry leaders the opportunity to share their stories with our global community. And by renowned and emerging, we mean you, person who deserves recognition from our community of 2,000 attendees for the awesome work you’re doing! If you’re interested in presenting at our flagship conference during Lean Startup Week Oct. 31 - Nov. 6 in San Francisco — alongside folks from Google, General Assembly, Hint Water, Sama Group, GE, Salesforce, and IBM, among others — we’d love to hear from you.
Don’t worry about having some kind of conference track record. Our speakers hail from scrappy startups, global enterprise companies, government agencies, faith-based organizations, and the education and social sectors. We highly value diversity in our lineups, and we encourage people of all genders, races, ages, and ethnicities to apply.
If you have Lean Startup experience to share, we encourage you to propose a talk via our Call For Proposals form, regardless of whether you have public speaking experience. Submit your idea as a short video, ideally under three minutes. iPhone videos are totally acceptable, just make sure the sound quality is high enough that we can hear you. Here’s an example of a speaker application that we loved.
There are a limited number of spots available to speak. Below, you’ll find a few helpful tips on how to submit a proposal:
- You don’t have to be a Lean Startup all-star to apply. You just need a good story, useful tips, compelling advice, or practical applications to share.
- The core of your proposal should be simple. Focus on answering one of the questions posed in the Call For Proposals form. (you’ll find them on page 2)
- Deliver the pitch in your application as though you’re speaking from a stage. Although there’s still time to practice, stage presence matters.
- Presentations in 2016 will be shorter but no less dynamic. Design your pitch as if you were giving an Ignite talk. Here’s more information on how to create an Ignite style talk.
A few reasons why our speakers decided to participate in the 2015 conference:
“I really got a lot out of Lean Startup [Conference] 2014. ... It has been a great tool for me and my team to make real transformation.” - Freyja Balmer, Director of Product Management, Food.com at Scripps Networks Interactive Inc.
“[I realized] that my experience was valuable for others to hear...[It was] nice to be needed. I [felt] compelled to ‘give back’ as others have done for me.” - David Telleen-Lawton, Career Development Manager, UC Santa Barbara
“I wanted to get more connected to a strong startup community, share my perspective and experiences, and also continue to establish myself and my company among other thought leaders, influencers and doers.” - James Warren, founder, Share More Stories
Ready to apply? We want to hear from you! Applications are due by Friday, May 20, 2016.
Over the last eight years, we’ve learned that our Lean Startup community members are constantly searching for better ways to build and scale products. Whether you need advice on how to design a good experiment, how to get buy-in from your boss, or what key metrics to track to hold your team accountable, we’re here to help.
We’ve got two learning opportunities for you this spring:
Join us at Lean Startup Conference New York (May 10-11) in Brooklyn for an intensive two days of specialized corporate innovator education and networking. You won’t just hear inspirational and motivational talks (though we’ll have plenty of that!). More importantly, you’ll get effective how-to’s on the next steps for applying Lean Startup within your organizations. Our workshops and keynotes cover:
- Connecting Lean Startup strategy to execution to avoid siloed efforts that fail to shift the organizational culture, with Lean Startup Co. senior faculty member Jonathan Bertfield
- The importance of creating islands of freedom, with Lean Startup Co. senior faculty member Marilyn Gorman
- Planning, tracking, and running experiments & framing teams’ work around innovation, with Sense & Respond authors Jeff Gothelf and Josh Seiden
- Exploring the key components of and strategies behind robust customer discovery, with The Startup Owner’s Manual co-author Bob Dorf
- How Microsoft is making the change from traditional to Lean, with Cindy Alvarez
- Unlocking your company's innovation capital, with Launchpad Co-founder and Executive Chairman Jim Hornthal
- How Lean design systems allow teams to move fast and scale design, with GE Digital Design Director Ken Skistimas and Carbon Five’s Courtney Hemphill
- Lean concepts that helped the design transformation at Nordstrom, with Jyoti Shukla
If you live closer to Big Ben than the Big Apple, we’ve got something else in store for you...
We’re holding the Lean Startup Summit London (June 13 & 14) during London Tech Week to bring our innovation training across the Atlantic, featuring seasoned Lean experts from Silicon Valley and around Europe. This summit will focus on the practical ways UK organizations in areas like fintech, cleantech, Lean Impact, and Lean enterprise continuously adapt and innovate for the long term through techniques validated in environments of extreme uncertainty.
Get the initial London program details here, including:
- How to implement Lean Startup (a foundational workshop for newbies and a refresher for the pros), led by Lean Startup Co.’s Phil Dillard
- Practical tools to set up, run, and measure innovation experiments, with the founder of the Business Model Canvas, Alex Osterwalder
- Build a transformation roadmap for large organizations, with former Pearson SVP Sonja Kresojevic
- Fireside chat on GE’s FastWorks journey—including how the company has developed, measured, and scaled the program to 250,000+ employees—with FastWorks Skills Director Sinéad Clarkin
- Fireside chat with Pernod Ricard’s Head of Employee Development on how the beverage company embarked on a 1,000-day, Lean Startup-driven business transformation journey called “Project Ingenuity”
- A practical guide to innovation accounting with The Corporate Startup co-author Tendayi Viki
As an attendee of either event, you’ll get an extra bonus: a virtual keynote by Eric Ries, along with a pre-publication copy of his latest book, The Startup Way, which focuses on the implementation of Lean Startup techniques inside large companies. Bring your burning questions for this interactive talk, and Eric will do his best to get them answered.
The Startup Way won’t be available to the public until October, but as an attendee, you’ll receive a special early conference edition of the uncorrected paperback proof, being printed especially for you this summer. Attendees will also receive the hardcover book in the fall.
We’ll have even more to announce in the next few weeks leading up to the event. We hope you’ll join us in New York and/or London to get the latest skills sets and techniques necessary for building a modern company.
We’re excited to announce that we’re doing something radically different with our flagship event this year. Gone is the Lean Startup Conference as you know it. Welcome instead Lean Startup Week, October 31 - November 6, 2016.
And what is this Lean Startup Week? It is seven days of thought-provoking programming around the things you love — Lean Startup training, specific case studies, hands-on workshops, industry networking dinners, inspiring speakers, and speed mentoring sessions — plus brand new partner events. That’s right. We’re inviting the big names in entrepreneurship to help curate workshops and activities. For example, Techstars is leading a two-day MVP bootcamp, a.k.a Startup Weekend, designed to amp your rapidfire build-measure-learn process as part of Lean Startup Week. (If you’re interested in producing a session or small event related to entrepreneurship during Lean Startup Week, pitch us your ideas at firstname.lastname@example.org.)
We’re bringing in a new mix of speakers and mentors from the Fortune 500, startup, and mission-based org worlds. These are industry leaders you haven’t heard at our conferences before and who you won’t hear anywhere else. We have lots of exciting announcements about Lean Startup Week speakers that we’re bursting to tell you about — like General Stanley McChrystal, the retired four-star general who has a remarkable record of achievements. He’ll share what he’s learned from his time in the military about how to improve organizational performance, cultivate an adaptable team, and scale management to meet the biggest challenges facing an organization.
You’ll also hear from IBM’s head of design Phil Gilbert, who was recently profiled in the New York Times Magazine for introducing the world’s largest information technology company to the concept of design thinking. Design thinking is a philosophy so complementary to Lean Startup we’re excited to include more programming dedicated to it as part of Lean Startup Week.
And we’re thrilled to welcome Matt Brimer, who co-founded General Assembly as a community for entrepreneurs and has grown it into a global education company. He also happens to be the founder of the super hot pre-work dance party, Daybreaker.
Plus we’ll hear from Michael Perry, CEO of virtual marketing assistant Kit, who gave an amazing impromptu presentation at 2015’s Startup Tours, and Tatyana Mamut, Head of Design & UX at Salesforce (and ex-IDEO), who will lead an interactive conversation on driving product innovation.
We’re also offering strategic learning tracks so you can focus on programming built to match your skill set, objectives, type of business (startup versus enterprise), and level of experience more closely than ever before. Those of you who’ve been with us for years say you want more concrete sessions dedicated to long term strategies and advanced practice discussions, while you newbies are anxious for hands-on classes and fresh case studies to get you started. For those looking to mix-and-match between levels and develop new skills, we’ll also have a DIY track that allows you to schedule your sessions accordingly.
Lean Startup Week will be centrally located at San Francisco’s new, state of the art Pier 27. Workshop classrooms are big enough to fit everyone who’s eager to learn from our esteemed mentors. And we’ll have dedicated areas for catching up on work and networking — because we know how important those IRL alliances with other members of the global Lean Startup community have become to you. This is your chance for a solid week of Lean Startup training that matches your needs and skill level. It’s your opportunity to stay current with all the leading business tools that foster innovation. And it’s your chance to come together with a tight knit community dedicated to cracking the toughest challenges around rapid risk-taking. You’ll leave ready to apply the principles you’ve learned with us in your workplace, introduce the concepts to your team, and build successful products for the long term.
And hey, don’t just take our word for it. Below are a few testimonials from previous Lean Startup Conference attendees about their experience learning with us:
“Prior to attending the conference we were trying to balance doing customer discovery and working on new problems while also serving our existing customers. Innovation accounting helped us understand the need to dedicate folks to these types of initiatives. As a result we’ve been able to iterate much more quickly, and overcome some of the executive fear of releasing something into the wild in an MVP state.” — Andrea Hill, product strategist and UX consultant at ReadyTalk
“During the conference I asked tons of questions during the after-hours 1-on-1 sessions with experts, and received direct feedback from Eric Ries on the ﬁnal day. Since then we've designed three new products that came directly from customer feedback and are proving popular in initial testing.” — Emmanuel Eleyae, co-founder at Satin Lined Caps (SLAPS) Stockton, CA
“The Lean Startup Conference has been instrumental to helping my team, one unit within a large organization, stay innovative. I’ve had my team attend the past three years.” — Darin Foster, director of product at Disney
So what do you think? Wanna join us this Oct. 31-Nov. 6? Check out more information about Lean Startup Week here. We’ll have lots more big announcements in the weeks to come.
Across the board, all of them are engaged in one thing: entrepreneurship.
It may sound crazy to you to call the Federal Government entrepreneurial. Or that a company like GE, which was founded in 1892, is comparable to one like Airbnb, which was founded in 2008. But both of these things are not only true--they're the key to The Startup Way.
Regardless of size, mission, or sector, no organization can survive without the ability to adapt continuously. I believe that ability has to be a structural part of every organization--that companies need a standardized way to test ideas, run experiments, and follow through on the ones that will bring sustainable growth and long-term impact. If you've read The Lean Startup, those ideas will sound familiar. In that sense, The Startup Way is a book about how to use Lean Startup tools at scale. But it's also a book about leadership. No tool can bring change if it doesn't have the support of the people in charge, who, after all, inspire and direct others to new heights.
The book is a combination of real-life examples of how these leaders have done just that, and deep explanations of the methods and practices that together make up The Startup Way of working. It's been truly inspirational for me to see so many smart, passionate people make real change in these last years. My hope for the book is that it will give many, many more the tools they need to keep that change growing and spreading. I can't wait to see what happens.
You can pre-order the hardcover edition here. Your order will grant you access to The Leader's Guide community, an exclusive network of new and experienced Lean Startup practitioners, where I'll be sharing excerpts from the book and the results of the design and content testing I'm doing to shape the final product.
I wanted to share a video with you, which contains my opening remarks from the conference. It's mostly my reflections on a new set of ideas about entrepreneurship as a management discipline, and in a normal year that's what I would be highlighting in this blog post. But ever since I gave the speech, most people have wanted to talk to me about my brief editorial views on politics (which come at around the 9:00 mark, if you want to skip the management mumbo-jumbo).
This is not an ordinary year and it requires us to take extraordinary steps to safeguard our community and our nation. I've pasted a transcript of my that part of the speech below the video. And at the bottom of this post I have some links for for further reading and suggestions for how to take action.
If you're thinking about voting but aren't sure if you can or how to do it, please email me. I will personally try and help you however I can. Need a ride to the polls? Need to know if you're registered? Aren't sure where to go? I'll do my best to hook you up.
Please vote. Thank you,
I think some of you have noticed that in the United States we have an election coming up. Normally the thing to do in a polite space like this for me to say, "listen it's very important to all of you to vote. so please vote." and that's it. Everyone would say that's great. But this is not a normal year and I don't really feel that is adequate to the challenge that we face as a nation. So I know this will make some people unhappy but I feel the need to editorialize for a moment so just bear with me. This is not a normal election and these are not normal times, when you can vote if you feel like it or you can cast a protest vote if you want to. I think all of us need to view this as a moral obligation to stand up for the values that make this country great. The practice of democracy and the ability for people to come together and build a civic Republic is under threat. We have to stand up for that. This is very personal to me. My grandparents were children of the depression and the Holocaust. I have ancestors who fought for the USA in the Pacific and who were victims of the death camps in Europe. They lived through a darkness that I can scarcely imagine. They lived through it but they never talked about it in the past tense. They never boasted or bragged or said we defeated the darkness and it's over. They always said to me and my sisters: beware the signs, know your history, be ready. I mean I grew up in San Diego California as a middle-class white American. This country's been so good to me - I mean, look at me now - so as a child I found this story hard to take seriously. I thought they were paranoid. When I was a teenager, I would roll my eyes. I was not that interested in that message and I frankly thought they were being silly with such dark talk. Let me tell you, I don't think that anymore. In 2016, I take this very seriously. I think we are seeing that darkness come again and we have an obligation to stand up to it. If you are a US citizen, I ask that you exercise your moral obligation - your sacred obligation - and vote.At the conference this year, for the first time, we are going to be phone banking and doing get out the vote activities. If you would like to join us, please do, it is strictly optional. This is important too: for those who that don't agree with what I just said you're still welcome here. It's not the official position of the conference and I hope that everybody will feel comfortable talking about this and bring the same experimental rigor and open-mindedness to this as to any other topic as we go through the conference. I think it's critically important. Entrepreneurship requires a supportive public policy effort. There are real policy implications for what we do as entrepreneurs also on the ballot this year so I urge you to take it seriously. What does a pro-entrepreneurship public policy look like? The evidence is clear. It requires an openness to new people and new ideas. It requires us to imagine what someone was doing in the minutes before they became ane entrepreneur: they were a student, an immigrant, an ordinary worker. We have to have policies that encourage orindary people to take new risks and try new things. These policies are not easily categorized as "right" or "left" so they get lost in the din of campaign coverage: abolishing non-compete agreements, portable health insurance, open regulations that allow new business models, open data and government APIs, appropriate bankrupcy laws, patent reform. The list goes on. If you study the candidates' campaign websites, whitepapers, and promises, as I have, you'll realize there is only one choice. And just in case I wasn't completely clear earlier, I want you to vote. I personally will be enthusiastically and unapologetically voting for Hillary Clinton and I hope you will do that too. Thank you. I know not everybody is applauding right now. That's ok. We don't normally talk politics at events like these, and some of you probably think I've opened up a can of worms. I accept that. Please, I want you to treat each other with respect. This is an important election but we have to still listen and talk to each other and take each other seriously. Thank you.
The following links and suggestions come from my friend Reid Hoffman. There's also a movement afoot in Silicon Valley for startups to give their employees the day off Monday and Tuesday so everyone can both vote and help in their communities to get out the vote. If you are thinking about doing this and need help or suggestions, please email me and I can share resources with you.
Take Some Action:
- Make calls for Hillary: hillaryclinton.com
- Help get out the vote + early voting. Made easy! voteplz.org
- Election Update: Why Clinton’s Position is Worse Than Obama’s fivethirtyeight.com
- Deeply Disturbing talkingpointsmemo.com
- Clinton email explainer vox.com
- America and the Abyss nymag.com
- Donald Trump’s Moments and Missteps: A Look Back nytimes.com
- The Late Show with Seth Meyers: What’s the difference between Trump and Clinton anyway? youtube.com
- Need help with California ballot measures? peterates.com
- No one should forget that @realDonaldTrump began his campaign by attacking #immigrants as “criminals” and “rapists” on his very first day #GoVote
- Anyone who sees and treats #women as Trump does is unfit to be president #WhatHeBelieves #GoVote: https://youtu.be/Oy8HRdlLGCQ
- Literally the easiest way to check & register if you’re not already + find early voting locations: https://www.voteplz.org/ #GoVote #VotePlz
- The Death Penalty Can’t be Fixed. It Needs to be Ended. https://medium.com/@reidhoffman/the-death-penalty-cant-be-fixed-it-needs-to-be-ended-644e4ac1be09 - .8nv4l2c55 #YesOn62 #NoOn66
- Rarely has a single vote had so much consequence: https://medium.com/@reidhoffman/this-election-day-whats-the-worst-that-could-happen-8b501fef5a2#.x56kh0heh #GoVote #VotePlz
Guest post by by Jennifer Maerz, contributing editor of Lean Startup Co.
The solution to long-term innovation in companies obviously isn’t having one person come up with all the bright ideas and then translating those ideas to teams that execute them. We’re looking at huge shifts in workplace structures that involve reimagining things like who holds the power to make decisions and how we judge performance, all the way down to how we run meetings to encourage constructive disagreement and a diversity of ideas.
A big part of adopting Lean Startup in an established company involves fundamentally shifting the way organizations manage people and ideas. Mark Raheja, founding partner at August, a consultancy focused on organizational development, will be speaking as part of the enterprise learning track at Lean Startup Week about agility at scale. Mark has created transformational programs for GE, PepsiCo, and American Express while working as a partner at Undercurrent, and he currently works with enterprise and fast-growing companies to crack the riddle of how to organize and operate quickly without breaking.
This interview is part of our “Future of….” series that includes interviews with experts out in the field on the Future of Workspaces, Government, Skill-Sharing, and more in the weeks leading up to Lean Startup Week.
In thinking about the future of corporate agility and management, what modern practices are most vital to today’s leaders?
There are a few big shifts taking place. We tend to describe the industrial era model as being closed, efficient, and controlled. Those aren’t necessarily bad principles of operation; they were very well-suited to the time. Generally, though, we’re talking about shifts from being closed to being open. That can apply to the technologies you use and how you collaborate—whether you’re using cloud-based tools that everyone can be inside of and see all the time, or whether you’re using tools like Slack that have the biases of openness. It also has to do with the way you’re doing work. So do you work out loud with each other? Do you share work in progress or wait until it’s completed? There are a set of practices around each of these principals.
There’s another general stream of our work that has to do with decentralization of authority on some level. It used to be that because everything moved slowly you’d have all the decision-making authority nested at the top of an organization. A very big area of emphasis for us is working with leaders and introducing practices or tools that help make it safe for authority to move from the center to the edge of the hierarchy. There isn’t one thing that does that. There are a whole bunch of different things that do that.
One of those things is getting explicit about decision rights. Actually writing down who has the ability to make what decision. In most organizations that’s not even clear. In the absence of that clarity it just kind of floats to the top. So there’s a lot of work around trying to set teams up with the authority to do whatever work they need to do to accomplish a mission without having to ask for permission.
We actually spend a good amount of time focused on meetings—which can sound boring, but they’re the gateway drug to new ways of working. They’re one of the primary vessels of work that fills up everyone’s time, so how meetings work is a high leverage point to change work habits. We work to make meetings more structured, bring the role of facilitation into them, clarify the purpose of the meeting—are they about decision making? Prioritizing? Setting strategies? We bring structure in a way that tends to be liberating.
When you think about leaders transitioning into different roles, one of the scary things for some of these people has to be the fact that they’re used to having a lot of control, as well as the boost they get from having so much authority.
Definitely. In all the literature around change, often the middle layer gets called out as being this big barrier. While technically it’s true that this is where we can run into challenges, though, I tend to sympathize with people in those roles. They’re in the hardest spot. They’re the ones who some senior leader is making all sorts of promises for about what is going to get done. You also have these people who spend 10-25 years moving up the corporate ladder and they have a lot on the line. They haven’t had the huge payoff that comes at the end of that climb in a large organization, and the systems and processes inside these large organizations are still incentivizing the wrong behaviors or pushing the wrong principles. So you have these leaders who have a lot to lose just by letting go and letting their teams go without their control. Basically we’re asking them to accomplish huge amounts of work and take on a certain amount of risk in transitioning to this new way of working while the reward is unclear. The other thing is they’ve gotten good at traditional management. They’ve been trained to lead in a way that’s starting to go away. So it’s really destabilizing from a psychological perspective; there’s no guarantee that they’re great at the kind of leadership companies need from them today.
So how do you weigh the decision of how much this leader or employee can learn and adjust to the new way of doing things and how much is this a situation where this person is now never going to be a fit?
There will always be people who fall into that latter category, where the motivation just is not there. Or they’re motivated in a separate direction. But our experience is that it’s a relatively small group blocking change.
There’s a tremendous amount of unlocked potential and capacity inside existing teams and leaders. If you can make it safe and you can create the conditions for them to practice and try these new ways of working, they tend to flourish. They embrace it for the most part and everybody wins. You get a more productive organization that is able to work and shift faster and you get more engaged people who love their work.
You said a lot about creating a safe environment. How do you rethink performance reviews in the context of encouraging new practices?
Performance management is one of dozens of systemic barriers to new ways of organizing and working inside big legacy organizations. The biases are kind of insidious. But it’s not just that. It’s how they budget. It’s how they do strategic planning. It's how they recruit people. If you’re really going to do this transition, all of those things need to be revisited with a fresh pair of eyes.
If you’re diving into performance management specifically, though, you see a lot of situations where it’s optimized for the few or the individual rather than the organization. You actually see people behaving in ways that aren’t for the benefit of the organization because they’re optimizing for themselves. You’ll have two teams that need to collaborate but they’re actually incentivized to do conflicting things. So you have to revisit structure. One thing we tend to emphasize is a general shift towards rewarding teams over rewarding individuals. That way you're trying to avoid this rogue hero behavior and trying to optimize teams to achieve together.
I’m curious how you see diversity fitting into the future of management. What does it mean for modern teams to reflect diversity when it comes to hiring people of color, people along the gender spectrum, etc. in shaping the company’s POV?
We are very strong advocates for diverse and inclusive work. There’s plenty of data out there about why this is a good idea. Especially because it is right and it feels better but also because it builds more successful organizations. You need a diversity of perspectives and opinions; it’s like a generative force to have more of those present.
The more diverse your organization gets, the harder it will be to come to a consensus as a group. You’ve built in a systematic tendency to disagree, because you come from different perspectives. And that’s partly why we spend so much time with organizations trying to get them to stop trying to agree with each other. It might feel good to agree, but you don’t need that. What you need to agree on is how can we make this a place where new ideas are safe to try and keep moving.
One other thing we tend to emphasize with clients is something we call “rounds,” where you’re going one by one and you’re surfacing questions and reactions from an individual level instead of just letting everybody talk at each other, which biases us. Often in meetings there are a couple of voices that tend to dominate. So some of our work is about creating environments where all perspectives are represented and heard. That’s why structure in a meeting is a good thing. Typically the junior people and the introverts don’t say anything, and these days they tend to have some of the most valuable perspectives.
August is also a lab in and of itself. As you’re trying to promote better management practices for other companies, what have you come up with within August that you’ve found interesting?
We tend to be out on the proverbial edge of the work we’re doing and so we are motivated to push the envelope on these principles. It’s been just over a year [since August was founded] and we’re a radically transparent organization—our Google drive is public. A pocket of it has confidential client information but otherwise every other document we create we host publicly.
We don’t know many organizations operating with this level of transparency. It translates to our documents but also to our salaries and our equity models. We’re constantly learning the nuances of this transparency. So, for example, what’s it like to have our salaries public? Generally we believe there’s a huge systemic plus in us being open about them, but not all team members will be comfortable with that on an individual level. And so it’s interesting, reconciling our ambitions for having an impact on a system level with what is comfortable internally.
Both inside clients and internally we’re finding that there are bigger errors to these changes and you have to creatively find the solutions. We’re trying to stick to the principles and let the future emerge. So far the wheels haven’t fallen off.
Hear more from Mark and other leaders pondering the effects of long-term innovation on the way we do business at Lean Startup Week Oct. 31-Nov. 6 in San Francisco. Take advantage of our special fall pricing and save up to $350 before October 15th.
It’s been exciting to watch the Lean Startup movement grow from a practice utilized in the tech world to one implemented in a wide variety of sectors ranging from enterprise to education, religious organizations, nonprofits, and government groups. When we talk about government, we mean both the macro outfits whose work affects the entire country (perhaps you’ve heard of the IRS) and regionally-focused groups alike.
Kelly McAdoo is the City Manager & CEO of the City of Hayward in Alameda County, California. She’ll be speaking during Lean Startup Week at our Ignite Opening Reception on Tuesday, Nov. 1 about how she uses Lean Startup principles to empower government employees and to improve resident satisfaction. As part of Lean Startup Week’s “Future of…” series, we asked Kelly to tell us more about the future of how city governments work with and relate to their communities, what a civic MVP looks like, and why she so badly wants to disrupt how we think about local government.
This interview is part of a “Future of….” series that also includes the Future of Work, the Future of Corporate Agility, Skill-Sharing, and more in the weeks leading up to Lean Startup Week.
Kelly, your Twitter handle asks, "Can we please disrupt the conversation about local government?" Pretty funny, but I'm also curious what you mean by that statement.
I’ve been working in local government for almost 20 years now, and I think it’s probably the same situation that exists in most industries. You tend to get stuck in a rut—people get very insular and think that the best ideas may only come from others in your field who appear to be doing unique and creative things. You also can’t just take private sector ideas and overlay them on local government. How do we enable conversations that move us beyond where our organizations have been for the last 50 years?
I’m also tired of the rhetoric about bureaucrats working for government who stand in the way of progress. There are some amazing and committed public servants who work in local government, but many are stymied by an organizational infrastructure that rewards safety and security. My challenge to other local government CEOs is to have conversations about how to create organizational environments that facilitate disruptive change and are more responsive to the changing nature of our communities.
How did you first get interested in bringing Lean Startup into city government?
At our core, local governments are public service agencies, which means that we should be focused on maximizing value for our “customers” (AKA residents). I’ve always been intrigued by the concepts of design thinking and customer empathy and how those concepts might intersect with local government. However, I’ve never quite seen how we could operationalize this in our organization. To me, Lean Startup provides a framework and a methodology for taking customer empathy work and translating that into real and measurable outcomes for our community. It also adds the customer empathy piece that was missing for me from agile or Lean methods.
What kind of reception did you get when you tried to get other government employees on board with practicing Lean Startup? What were the biggest stumbling blocks?
It’s ironic, but as I’ve talked with others who have been engaged in these types of initiatives in private enterprise, there are many of the same challenges. At the core, we are attempting to change the organizational culture of a large enterprise with all of the associated obstacles and heartburn. For example, we’ve had to deal with getting executive buy-in, creating time and space for people to try working in a different way, and generating a critical mass of people in the organization with the skill sets necessary to move the change forward.
The unique lens applicable to local government is the political and public scrutiny that comes with any new or risky project. This is the beauty of this methodology for me and why it has the potential to be so impactful in local government. Instead of spending hundreds of thousands of taxpayer dollars on major initiatives and failing very publicly, we can spend $5,000-$10,000 on experiments to determine whether we are even on the right track in the first place.
How are you incorporating the methodology now? What does an MVP look like when you're talking about the City of Hayward?
Right now, we are really working on building capacity and skill sets around using the methodology. We are also having a lot of conversations about when it makes sense to use the methodology in our organization. For example, we aren’t going to run an experiment on how a firefighter starts an I.V. on a patient during a 911 medical call. We are looking to use the Lean Startup methodology on the more systemic problems that need a different perspective and viewpoint to help us get to the root cause.
We are also talking about how we can use the methodology to help us prioritize really scarce resources. Two great examples come to mind that demonstrate how this process has been helpful to our team. The first was one of our teams that was evaluating the need for an online business license application program. Every business that opens in the City of Hayward must register for a business license and pay the associated taxes. Our team had been heading down the path to spend $90k or more acquiring a software solution and spending probably a year implementing the program. The team used Lean Startup principles to evaluate the issue. When they actually talked to customers, they discovered that being able to complete their application online was not the biggest issue as many customers still had to come to City Hall for other reasons. The bigger issue was not understanding what the license requirements were before they got to City Hall or not being able to download an application, complete it, and bring it with them. Within a couple weeks, the team redesigned the website and allowed customers to print out the application forms which can now either be brought to City Hall or emailed directly to staff for processing. While an online application system might be more technically savvy, our team was able to solve a customer problem with a relatively quick and cheap fix.
The second example comes from a team that was attempting to address the issue of people who hoard items in their homes and create public safety concerns. The team had looked at implementing a program from a neighboring community that was touted as a very successful solution to this issue. However, as they started doing their customer empathy work, they quickly discovered that the program was not as successful as they had anticipated, primarily due to a key training and staffing deficiency within the County Adult Protective Services Department. The team estimated that they saved over $200,000 in staff resources by determining within a month that implementing the program would not have had the outcomes that they were originally anticipating and deciding against pursuing an ineffective solution. Instead, they refocused the discussion on how to work with the county to push for the necessary training.
In addition, they made changes to the city’s online reporting systems so that first responders could check a box to identify a property that had hoarding issues. In the future, once the county training resources are available, this change will allow the city to quickly run a report and identify households where hoarding is an issue.
For me, this is a prime example of using Lean Startup to prioritize scarce resources and to focus on the right problems at the right time. Do we want to solve the hoarding issue in our community? Absolutely. Do we want to spend lots of resources developing a program that won’t be successful because a key element is missing? Absolutely not. The Lean Startup methodology helped our team very quickly identify flaws in their assumptions and adjust accordingly.
How does showing that you're approaching your work with an entrepreneurial mind change your relationship with your community in Hayward?
The number one value add I’ve seen from this process is simply the connection that happens during the customer empathy work. A lot of employees in local government are fearful about the reactions they might get when they go out and talk to the community. So instead our typical solution development process goes something like this: 1) staff convenes an internal work group or task force; 2) task force/work group spends 6-9 months brainstorming solutions, researching best practices, and then developing one idea into the final solution; 3) work group holds token community meeting to present nearly final solution and get “feedback”; 4) solution presented to city council for adoption/funding; and 5) solution implemented with limited success.
What our team has found is that 99% of our community is truly appreciative when you ask them for their input in the process, early and in a meaningful way. And community engagement doesn’t have to take a lot of extra work. That is a big fear in local government—you host a huge neighborhood meeting with lots of targeted outreach and staff work to set up and either no one shows up or you get a large contingent on one side of the issue that may or may not be representative of broader sentiments in the community. When we were looking at changes to our neighborhood preservation/code enforcement ordinance, our 8 Code Enforcement Officers took a part of a day when they were out doing their normal inspections and knocked on people’s doors to ask them a series of questions about the issues in their neighborhoods. They talked to over 300 residents from all over the community and got more direct and impactful insights than if we had held a community meeting at City Hall to share the proposed ordinance changes. It also changed the direction we headed with those ordinance changes.
We need to be thinking about how we can call ourselves a “public service” agency if the employees are scared or nervous to talk to the public. How do we give our employees tools to have productive conversations with the community? Lean Startup methodology helps frame the issues in different ways so that employees can ask more targeted and direct questions about the way in which customers are experiencing a problem in our communities.
In thinking about other city governments across the country, what advice would you give them about getting started, and why they should use these kinds of modern business practices?
In our organization, we started from the bottom up and trained a core group of employees in these methodologies. These were employees who had previously demonstrated a willingness to try new things, came from all levels in the organization, and who volunteered for the initial training workshop. I think it is also crucial to have an executive sponsor who can support the initial teams in their efforts to work differently. It will be frustrating and challenging as you push against the bureaucratic systems and old ways of doing things. Having someone at the top levels in the organization who is committed to the effort is key. I served this role in my prior position as Assistant City Manager. I attended the training with the initial team and hosted monthly lunches to support them in their efforts to work differently.
I have seen a pattern in the way city governments approach problem solving. Someone in an organization will come up with a creative idea and have the wherewithal and stamina to see it through to implementation and will then see some successful outcomes. Other local governments will then hear about this organization’s idea and then we will tend to try and replicate it in our organizations. However, we haven’t really taken the time to understand whether the root causes of the problem we are facing in our community are the same root causes of the problem the original successful community faced. It is critical to create organizations with the skill sets and mindsets to look at and evaluate each issue as it comes up and to design a solution that, while it may be influenced by what other cities have done, is tailored to the needs of our constituents.
What is the biggest stumbling block generally to city governments modernizing their approaches?
One of the interesting dynamics I have seen in local government is that innovation is often driven out of or by IT departments or by the implementation of new technologies. While the IT team is a crucial partner in the innovation process, if you don’t create an organizational culture that understands how and is receptive to partnering with IT on change efforts, you won’t see the impact you are hoping for. It’s similar with private sector or non-profit partners. There are so many startups and companies out there who are talking about making life better in cities but they may be attempting to partner with cities that don’t have an organizational culture to support and maximize the impact of the effort.
I also think politics can derail these efforts by city governments. Many city councils may see any dollars spent on these types of training efforts as frivolous. This is where it is crucial for the project teams to be tracking metrics. What has been helpful with our city council is identifying how many residents or business owners we have talked to during our empathy work. We have also tried to demonstrate a data driven approach to implementing solutions. We spend a small amount of money on an experiment, collect data, and then determine whether to scale efforts accordingly. Talking with our residents also helps us determine whether or not we should pursue certain initiatives, saving the city money in the short and long term. It is also harder for the council to refute feedback from several hundred residents. It gives them evidence so that they can go back to the one or three really loud voices in the community and explain why the city won’t be pursuing a certain effort at that time.
What do you see as the future of how city governments work with and relate to their communities?
We in local government have to adapt to the changing nature of our communities— people are working longer hours, are more digitally connected, and have less time to engage with their government. We have to be careful that the squeaky wheels in our communities don’t drive the conversations and the community priorities. This requires those of us who work in local government to think and act differently. Our methods of “engagement” really haven’t changed much over the last 50 years. It would be interesting to see how we could apply Lean Startup principles to the problem of community engagement.
I also think that for many years, local governments have really driven the agenda in communities. I equate it to Maslow’s hierarchy of needs—when a community is still looking to have its basic needs met, the role of local government (or any government) is relatively simple. Provide food, shelter, and security. As community members have more of their basic needs met and they are on a path to self-actualization, what is the role of local government then? We become a quality of life provider. However, understanding what that means to your community without effective and robust dialogues is impossible. Our challenge as local government leaders will be to help frame these conversations and also to help shape organizations that can be responsive to this changing nature of our communities.
Are there any cities you model your approach on, either in the US or globally, that are particularly innovative?
There are lots of big cities experimenting with innovation labs and the like. New York City’s partnership with Sidewalk Labs, San Francisco’s Entrepreneurship In Residence Program, and Singapore’s experiments with the sharing economy come to mind. However, the challenge with using these big cities as models is that cities like Hayward don’t have the resources, either staffing or financial, to pull off these larger scale efforts. There are only a handful of cities on the scale of a New York or San Francisco but tens of thousands more like Hayward that have the potential to touch even more lives. It is important for smaller agencies to understand how they can implement this type of culture change without a big city budget. For me, the most important step is for local government to start somewhere, try the principles out, and see how they can be adapted for their community. It doesn’t matter if you are strictly rigid to the methodology. If our government simply increases the level of interaction and empathy our employees have for community members, I would say both our organization and our community is winning.
Hear more from Kelly and join the larger long-term conversation at hand by attending Lean Startup Week Oct. 31-Nov. 6 in San Francisco. Register now and take advantage of fall pricing.