Lean Startup for MBA's, a GE Case Study.

When GE starts adopting Lean Startup methods, business schools should take note.

Speaking at the MBA Directors Forum in Melbourne this week on behalf of AGSM , I was asked to share my views on how business schools need to innovate to design the MBA of the future.

The value of MBA programs has been under immense criticism since the Global Financial Crisis, with headlines such as: “MBAs: Public Enemy No. 1?” , “Are Business Schools to Blame?” and my personal favourite “Academies of the apocalypse” . Vivek Wadhwa shared these observations in the Wall Street Journal : “I have seen a growing mismatch between the skills that business schools teach and what fast-paced startups require". Whilst I agree with his views, I think that this mismatch also extends to the new skills required by large corporates, not just startups.

A key theme of my presentation to the representatives from over 40 business schools was the need to embed Lean Startup and other innovation and entrepreneurial practices into MBA program curriculum. I used the case study of GE, which has long been held up by business schools as the pinnacle of strategic management, operational excellence and leadership development practices.

The biggest implementation of Lean Startup in the world

In recent years GE has worked with Eric Reis, Author of The Lean Startup, to design their FastWorks program. In 2014 the Harvard Business Review published an article titled “How GE Applies Lean Startup Practices” describing FastWorks being applied to the GE Appliance business, which was also the topic of a panel discussion at the Lean Startup Conference in 2013 .

Through FastWorks, executives at GE are now trained to take risks, learn constantly and ask questions says Viv Goldstein, GE's Global Director of Innovation Acceleration. The executive commitment is also evident in Jeff Immelt's CEO Letter in GE’s 2014 annual report :

“We have put everything on the clock, launching a process called “FastWorks,” based on the entrepreneurial spirit of Silicon Valley. We are already seeing shorter product cycles, quicker IT implementation, and faster customer response than any of our competitors. There are hundreds of FastWorks projects underway. For example, FastWorks is accelerating GE’s development of solid oxide fuel cells, cutting our launch cycle by years."

I recently had the opportunity to coach future leaders at GE's state of the art Global Software Centre of Excellence in San Ramon, California . Through this experience, I can say that I am truly impressed with the level of commitment and leadership that GE has demonstrated in adopting Lean Startup practices to continue to transform the way that they do business.

Business schools should take note of the growing Lean Startup movement, and particularly on its adoption in the corporate world.

GE, as well as other innovative companies including CapitalOne, Intuit, Google and Qualcomm, have proven that Lean Startup principles are applicable to even the largest organisations. This is driving demand from MBA applicants to study Lean Startup as reported by Poets & Quants in “Lean Startup Revolution Sweeps Through Business Schools” . Author of The Startup Owners Manual, Steve Blank, seems to agree, having incorporated his Lean Launchpad course into the UC Berkeley's MBA program. Referring to GE's adoption of Lean Startup, Blank said “GE’s going to be the model for other industries” .

When asked “Why should business schools embed Lean Startup methods in MBA programs?”, Lean Startup thought leader and Co-Founder of Moves the Needle Moves the Needle , Brant Cooper, says:

“Because current programs are based on an organisational structure designed in the Industrial Age. Economic transformation requires organisational transformation. Most MBA programs continue to teach the old way."

And that 'old way' of doing things is exactly why Silicon Valley luminaries including Elon Musk, Peter Thiel and Paul Graham have spoken out against hiring MBA's in tech startups. In fact, venture capitalist Marc Andreessen likens MBA graduates' migration to Silicon Valley as a signal that a tech bubble may be forming .

The GE FastWorks case study highlights the fact that Lean Startup methods are becoming an integral part of the 'new' corporate executive toolkit. Teaching Lean Startup methods in MBA programs will equip the next generation of business leaders to effectively lead growth, innovation and strategy within their organisations.

Reigniting The Entrepreneurial Spirit Within The Nonprofit Sector

Source: Reigniting the Entrepreneurial Spirit within the Nonprofit Sector - MOVES THE NEEDLE

By Heather Hiscox on February 2, 2017

Think back to a job that filled you with optimism and excitement. You had a vision for the organization and your place within it. You were there to make a difference .

Now recall the day, week, month, year that you realized that your voice was not going to be heard, that your ideas were going to lose to the one belonging to the highest paid person in the office, and recall when you began to ask, “What am I doing here?” “Are we making a difference to really impact homelessness, hunger, poverty, domestic abuse, __ (fill in the blank with your social good mission)?” “What difference can I make?”

We’ve had those experiences and have felt the despair that comes from wanting to change the world and not knowing how. In our work with a diverse array of nonprofit and social impact organizations, we have seen powerful, transformational results when organizations adopt and internalize two fundamental beliefs:

1. Innovative ideas can come from anywhere and anyone

We’ve seen a small, but mighty innovation team of four individuals transform the way a municipality’s employees work. We have seen a quiet finance director go from saying “no”, to being excited about finding ways to say “yes” and support his colleagues. We have seen one volunteer catalyze a cultural shift in the way the organization develops programs in just two days. Organizations’ stakeholders often want to contribute and share ideas, but need to know that leadership is listening before they will speak up.

Command and control tactics may have worked in the past, but they have no place in the nonprofit organization of the future. The speed of change is increasing, the needs and expectations of the many constituencies we serve (our “customers”) are changing, and the complexity of the social challenges we are tackling continue to evolve. In this uncertain environment where we cannot execute our way to stay relevant and increase our impact, the ultimate competitive advantage is learning and translating learning into action as quickly as possible. This happens by empowering and enabling our employees to understand the situations and challenges of our many customers more deeply than we ever have before, and then develop and test bold solutions to address those challenges. In the nonprofit organization of the future, innovation (the creation of new value for those we serve) is everyone’s responsibility and employees are given the resources and support to identify and act on opportunities to drive impact for the many customers they serve.

The nonprofit of the future is based on an unshakeable foundation of deep empathy and empowerment of those it serves, including staff, one of their oft-forgotten VIP stakeholders. When all people (clients, board members, program coordinators, donors, administrative staff, directors, funders) are valued in an organization, it creates a massive, mission-elevating impact that can transform the culture of an organization and its future success.

2. Innovation comes from reigniting the entrepreneurial spirit inside organizations

The very best way to inspire new ideas is to reactivate the entrepreneurial spirit. This is the desire inside each of us to explore, to be curious and creative, to solve problems, and to create change. Just as we can lose the passion we feel for a new job full of promise, we can lose our entrepreneurial spirit. What happens to the baby crawling on her knees exploring every smell and taste, touching everything, and absorbing the world around her? What happens to the young girl that could play for hours with a roll of tape, a cardboard box and a few markers? What happens to the graduate who leaves school inspired to take on the world and make her mark?

A few lucky souls live their dream and are a beacon of hope, but for many of us, our innovative spark goes dim. Our lust for creativity is numbed with busy work, and our entrepreneurial urges slip away under a heavy fog of conformity, constrained definitions of success, and the need to execute upon “the way we’ve always done it.”

The good news is that innovation fights to see the light. It can come from the smallest interactions, even a single conversation. Innovation can arise from a tiny tweak that eventually creates a major shift in the way you work. Innovation is a muscle that can be built, using tools, language and a process that makes sense. “Being innovative” is not an intangible or unreachable state. It can be accomplished in just hours and days and can change the way an organization works forever.

By giving employees permission to revive their entrepreneurial spirit and providing them with a framework, process, and tools to channel it, employees can reconnect with why they originally decided to do this important work and help your organization accelerate and deepen its impact. They can relearn to walk in the shoes of those you serve, know exactly how to test new, big, bright ideas, and make decisions based on evidence of what actually works to change the world. Are you ready to “be innovative”, get back your passion, your voice, and really make a difference?

How To Run Experiments Without Compliance Wanting To Kill You

Source: How to Have Legal Give Experimentation a Chance

By Aaron Eden on October 13, 2015

This article was co-written with Christopher Anderson, J.D. Chris was a Senior Product Manager at LexisNexis before founding his own firm and helped offer a firsthand account of fostering healthy collaboration between legal, product and innovation teams at LexisNexis when it comes to rapid experimentation.

Large successful organizations can’t turn into startups again. They shouldn’t. They have core business assets that generate billions of dollars. Exposing those assets — brand, sales and distribution engines, proven products, operational excellence — to the chaotic environment of rapid experimentation and “failing fast” is a recipe for disaster. These core assets must be protected. That is the role of legal, compliance, corporate marketing, IT and other functions. They act as antibodies, fighting of “viruses” that threaten the core business.

But that’s not the end of the story. These assets are optimized for executing in the known, well-understood markets that exist today; that existed yesterday. But with increasing volatility in the market, and industry disruption lurking around the corner, enterprises must also be able to innovate; they must be able to incorporate startup-like practices in the face of uncertainty.

To the antibodies, innovation looks like a virus.

Innovation requires that people work differently, and different is bad. It requires people take risk, and fail, two things that typically go against the grain of corporate culture. We’ve seen the same story happen time and time again. An organization begins to adopt lean startup and run rapid experiments. Soon after, teams stop running experiments. Not because they don’t want to, or because they don’t see the value, but because they’re scared of butting heads with internal compliance teams.

In one Lean Enterprise Accelerator Program we ran with a client, during the workshop an attendee said, “if compliance knew we were getting out of the building to talk with customers, they’d flip out.” Good luck innovating when that’s the biggest fear…

In our 5 Ways to Spark Innovation at Your Organization we touch on how to create an environment where innovation is likely to occur, but in this post we want to get compliance to help innovation instead putting it in a chokehold using methods we’ve seen work inside companies like Intuit, Humana, GE, LexisNexis and others.

The Root of the Problem

Inside corporations, avoiding trouble is a tried and true path to promotions. Corporate lawyers look for ways to say no. A situation that could lead to failure or blame is a situation better avoided as nobody gets fired for doing the safe thing. Legal teams want to avoid any and all possible negative repercussions and as a result, innovation efforts and nimble experimentation become the virus and compliance becomes the antibody. Compliance is there to protect the existing business (as they should), but if that’s all they do innovation will not occur.

We’ve seen this lead to teams either running experiments under the radar, not running experiments at all due to fear, or becoming the impetus to co-creating experiment guidelines with compliance so experimentation is a norm that’s rewarded, not an exception.

So, what do you do?

1) Talk to Compliance About Why You Want to Run Experiments

First things first, if you want to create an environment where compliance welcomes nimble experimentation, compliance teams need to understand why you’re attempting this new way of work. What they don’t know can hurt them. It’s a new way to work, and at face value, the practices will lead to many raised eyebrows. ‘Talking to customers? Testing out a solution before it’s built and passed rigorous compliance standards? What are you thinking?!’

We’re not here to pitch you on the value of lean experimentation, but we are here to say that it’s up to you to pitch them. ‘Companies talk a lot about innovation; here’s a practical way to do it. There’s things we want to learn, and the fastest way to learn them so we can build successful new products is by interacting with potential and existing customers early and often so we don’t build something they don’t want.’

Start small and let it snowball. Share one specific project, what you’re trying to learn, why, how you plan on learning it, what sort of interaction with the customer this will entail, and what sort of customer insight you will gain.

Be sure to empathize; understand how they perceive their role and the importance of protecting core assets from legal action. Risk isn’t inherently evil, but it’s important to approach different types of risk in different ways. There are risks that can get the company in massive legal trouble. There are risks that can lead to millions of wasted dollars. And then there are risks on such a small scale within an experiment, that even if it fails, everyone’s better off with the new learnings at hand.

Also, in the same way there are early adopters for new products that you create, there are internal early adopters of corporate innovation. Seeking to transform the whole compliance team right off the bat is foolish. Finding someone on the team with klout who buys into innovation, and communicating the buy in and support from your senior leaders in conversation with them will stack the odds in your favor.

The key here is to start a conversation with the right person, to get guidance around how to run the experiment in a way that makes both parties happy. It’s not about getting permission, or having legal give a green light and being hands off. It’s about collaboratively determining the right way to go about running an experiment so all internal stakeholders are happy: you, them, the leaders who are trying to instill a more innovative culture, etc.

2) Invite Compliance to Participate in An Experiment

At this point, you should now be good to go on running a non-stealth experiment. One that’s been endorsed by compliance. Run it. Come back, let them know that they played a key role in your newfound learnings. This is a cycle that doesn’t end in the same way that experimentation is an ongoing practice.

3) Work With Compliance to Develop Guidelines

Therefore, the key is to not stop here, but keep the conversation going so you can co-create experiment guidelines with compliance. No two experiments will ever be the same, but there will be many similarities across different types of experiments. Guidelines should be created for the different types of experiments, and those guidelines can always evolve and be iterated upon in the same way you go about iterating through experiments.

We could give you guidelines that have been used within some of our clients, but that would go against the very method proposed in this article. A method focused around co-creation. That co-creation is key to taking down silos and creating a web of vested interest in this new definition of success where learning is king.

“But I work in a very regulated environment, I don’t think this will work”

After working with many regulated companies in banking, insurance, etc. we’ve seen that the masked foundation of this statement is fear. The same fear that prevents companies from experimenting regardless of industry. Legal council’s are trained problem solvers. They can handle small cases like interacting with customers or running experiments off brand, as long as they understand why.

If creating a culture of innovation is important to your company, alleviating the fear that often prevents it from occurring is vital. One of the most common causes of this fear comes from the “find a reason not to” mentality rife in corporate legal teams. Using the co-creation method we just discussed, we’re confident you can help create a culture of safety and rid the culture of fear.

Transformation is just as much stripping away the old as instilling the new, and this is how you do both when it comes to getting legal off your back and on your side. Happy innovating!

The Intrapreneur’s Guide To Navigating Bureaucracy And Politics

Source: Intrapreneur’s Guide to Navigating Bureaucracy & Politics

By Bryan Tublin on March 30, 2016

Corporate politics

Few things halt innovation faster than bureaucracy and politics within the enterprise.

Teams get excited about an idea, but can’t get it funded.

Endless approvals and tollgates are needed before a project is supported by senior leaders.

Managers preach the importance of innovation, but don’t protect employee’s time to work on new ideas.

As discouraging as this red tape can be for intrapreneurs within a large organization, there is a silver lining—every company deals with politics to some degree, so ideas are surfacing that make these challenges solvable. All you need is the right approach to pushing through the bureaucracy.

Here are four ways you can navigate bureaucracy and politics to innovate within your enterprise:

1) Align Your Project With Business Priorities

Make things easy on yourself by aligning your innovation project with a strategic initiatives of the overall enterprise. This will help you make the case for resource funding later on, and help stretch your thinking about the problems you’re trying to tackle. Senior leaders are incentivized to see the big picture, meaning the goals they set for the company are likely high-impact objectives. Piggybacking off company priorities will show you are capable of thinking big.

“If possible, align your innovation with a strategic theme or trend your company already recognizes is important,” recommends Eric Kowalchyk, Co-Founder at Kernel Networks, and former Product Manager at LinkedIn and Intuit. “It’s really hard not to focus on easier incremental innovations… push yourself to think big, change perspective, rewrite how the game is played.”

Starting with strategic business priorities will steer you in the right direction, allowing you to think big and build a team that can help you achieve your ultimate vision.

2) Gain Support From an Executive Sponsor

Support from a senior manager in the organization will give you much needed assistance to push your project forward. This is someone who can provide guidance and advice as you validate your ideas, protect time for team members to work on the project, and help present your case when the time comes to ask for business resources.

“Having a high-level senior leader [support an innovation project] is the only thing I’ve seen work personally,” says Hugh Molotsi, former VP of Innovation at Intuit. “That person becomes that project’s sponsor to support and provide air cover.”

An executive sponsor can also help entrepreneurial teams drive change. According to Chris Andrew, Managing Director at Hearsay Social, this is a crucial but often overlooked task for intrapreneurs.

“You need a very savvy exec sponsor and an even more savvy project lead,” says Andrew. “In a large organization the big success is moving a change forward, [since] the innovation is often something you can duplicate or see elsewhere. Understanding that the innovation itself is not the biggest challenge is tough to accept sometimes, but helps the team to focus on the core challenge – change.”

When seeking an executive sponsor to help drive innovative change, approach forward-thinking managers invested in the growth and development of their team members. You can also try writing project-related goals into your personal development plan with your manager at annual review time, which may encourage him/her to support your efforts as the project progresses.

3) Show, Don’t Tell

Successful innovation teams don’t just talk about their ideas—they gather evidence to prove they’re heading in the right direction. This data gives a team confidence in its approach to solving the problem, and makes a potential business investment seem less risky from a senior leader’s perspective.

Consider using your limited resources to run experiments that test your most crucial assumptions. If you’re struggling with where to begin, start small and work your way up to bolder experiments. “Rather than start with pure innovation, run a small experiment on something that exists already, make a hypothesis, and stay accountable” advises Adam Berk, a Consultant at Pearson.

Think about how your new feature or idea will increase one specific metric, and put a timeframe around how long you think it will take to drive that change. This will give you the ammunition you need when pitching your project to senior management.

Which leads us to…

4) Speak The Language of Senior Leadership

Most organizations use a specific set of criteria to make funding decisions. Successful intrapreneurs understand what senior leaders look for in a project, and tailor their story to the relevant business metrics when seeking resource support.

“Teams must be familiar with their company’s current funding calendar, evaluation process, funding decision makers and company priorities,” according to Simeon Sessley, Strategic Advisor at Moves The Needle and former Innovation Leader at GE. “Once those factors are known, then teams must clearly articulate how little funding they need for customer discovery versus the full funding if assumptions are validated.”

Pair up with a financially-savvy person within your organization to understand how budgeting decisions are made, and use the appropriate language to make funding your project a no-brainer. Understanding how to justify the ROI of innovation can help with your pitch. If you need guidance or support, ask your manager or executive sponsor to help frame the story in a way that is tailored to senior management. This will help communicate why your project is important to the overall business. Showcase the evidence you’ve collected so far to de-risk the investment in the eyes of those making resource decisions.

Politics Will Stand In Your Way If You Let It!

Navigating bureaucracy

Dealing with red tape within the enterprise is no easy task for passionate intrapreneurs. Those who succeed are able to employ several, if not all, of the following methods to push through internal politics and bureaucracy:

  • Paint a big picture vision that aligns with the company’s strategic priorities
  • Gain the support of an executive sponsor
  • Show evidence that de-risks the investment from a business point of view
  • Communicate why investing in the idea is worthwhile for the business, using language senior leaders understand

Have you successfully overcome politics and red tape while innovating within a large organization? Do you have advice for how others can do the same? If so, please share your thoughts in the Comments section below.

The State Of Data Driven Decision Making In Product Management

Source: Data Driven Decision Making in Product Management

By Aaron Eden on March 14, 2016

A recent study by Harvard Business Review analyzed the utilization of competitive intelligence and market insights within large corporations. They found that an astonishing 45% of analysts’ input had no impact on decision making within the company. The primary reason, suggests HBR, is that “many executives decide on a course of action and then use competitive intelligence to ratify their choice.”

However, the study found that analysts who worked specifically to provide insight for product launches generally found their input to be impactful. When it comes to product management, corporations by and large recognize the value of research. That’s because, according to HBR, a “lack of insightful anticipation…leads to many more failures than there should be.”

We surveyed more than 150 product managers about their perceptions and practices regarding data-driven decision-making. You can download the full report here, but we’ve outlined three interesting findings and implications below:

1. There’s a language barrier.

There are a lot of buzzwords flying around in product management right now, and that’s a problem particularly when they mean different things to different people. For example, Wikipedia defines ‘data science’ as the “interdisciplinary field about processes and systems to extract knowledge or insights from data in various forms, either structured or unstructured.” And yet, while that sounds a lot like ‘data driven decision making’, product managers beg to differ: Personal_Aptitude_for_data-01.png

Twice as many product managers felt they are excellent (a 9 or 10 out of 10) at data driven decision making than data science, while less than half as many felt they were weak at it. We need to be careful when discussing the desired practices and outcomes so as not to conflate phrases.

2. Product managers are often the resident experts.

As you’ll read in the report, only 21% of product managers have access to a data scientist in the organization, although, as we now know, that might not be the capability they think they need. By and large, product managers felt that their own aptitude for data driven decision making was superior to their team’s effectiveness at actually executing it. It’s critical for product managers to take training and education seriously when it comes to this topic, as they’ll likely be the expert on hand.


Nevertheless, more than 40% of product managers felt their teams were generally effective (7 or above out of 10).

3. Large enterprises are on the cutting-edge.

For the most part, product managers from large organizations were the most likely to adopt best practices for capturing data. This was true for using business intelligence tools, social listening, and running surveys. However, they were behind when it comes to running in-person interviews and online user tests.


There is still considerable room for improvement across the board, but generally speaking product teams are using a variety of channels to collect data and effectively make decisions. Learn more about their practices in our full report.

Data driven report by Moves the Needle: Download Here Data-Driven Product Management Practices

The 3 Traps Of Common Market Research Methods

Source: The 3 Traps of Common Market Research Methods

By Brant Cooper on January 22, 2016]

Market research often falls short when it comes to innovation.

Here’s why:

Market Research Method

*photo: focuspointeglobal.com

Modern market research methods, like Lean Startup, do a great job of focusing on customer-centric discovery. It accepts that we don’t have all of the answers and shifts initial focus to finding them. In our post, How to Innovate: What Innovation Really Is, we discussed how focusing on learning before executing is vital to innovation.

It generates insights through empathy (one of the 3 E’s of Lean Innovation, see 5 Ways to Spark Innovation at Your Organization). In lean startup, before beginning to test solution ideas, one focuses on developing empathy through customer development interviews. In market research, this is often done through qualitative one-on-one interviews, observation, prototyping and other methods.

But, once we dig deeper some common problems emerge:

Market Research and Product Silos vs. Cross-Functional Teams

For starters, product and market research are usually two separate activities. They require two separate teams. Market researchers generate insights from potential customers that are reported to the product team. Sometimes it’s an agency that gives a report to an innovation lead, and then to a product team.

Two bad things happen when this is the case. First, there’s an inevitable knowledge transfer fail. No matter how pretty and insightful the report, it contains explicit knowledge. There are chunks of (implicit) knowledge that only the people doing the research pick up on. This is why we’re such a proponent of cross functional teams, where everyone builds empathy. Not only does this help teams build better products, but it does so by creating a deeper connection with the customer. Engineers and designers are better at engineering solutions to problems, not to specifications or secondhand (or third-hand) observations.

Generate Insights, Scope Out a Product, Then Build vs. Testing, Learning, Iterating

The second shortcoming to additional layers between research and product is the increase in cycle times. Instead of a product team generating insights from interviews today, and testing out a new iteration tomorrow, market research teams work in multi-month research cycles. After they synthesize their findings into a report, only then can a product team can get their hands dirty. Unfortunately, when a product team “gets their hands dirty” it usually means building out a scoped out product (see The Fallacy of “Modern Management when It Comes to Innovation) and shifting from discovery to execution even though there is still likely tons left to learn.

We’re still stuck in “deliverables” mode, which is a linear, non-iterative process that results in tremendous amounts of waste when circumstances change, whether the result of errors or simply economic, social or technology trends.

What People Say vs. What People Do

In older-school market research, it’s common practice to ask questions pertaining to the future — what we refer to as aspirational questions. Questions like ‘would you buy this?’ ‘how much would you pay for this?’ Even in more quantitative market research studies aspirational questions exist. Take propensity scores for example — they ask respondents to assess their likelihood to purchase a product in the future on a scale of 1-5 (not very likely to buy to very likely to buy).

Unfortunately, there is a major flaw when it comes to aspirational questions. People’s perception of themselves in the future is fiction. What’s more insightful? How many times are you going to the gym this month, or how many times did you go last month. As a result you have to judge what people do (or have done), not what they say they will do. If you’re looking to generate empathy, this is done through behavioral questions that uncover what people are already doing, and why they’re doing it. When looking to (in)validate solutions, this is why we do currency testing. Even when it’s not money, customers must be willing to give up something that proves they’re in.

Market research has an important role to play in product development. There’s a time and a place for everything. When it comes to innovation and new product development, learning fast and taking action upon insights is the key competitive advantage. Leaving that up to one silo’d department can be setting yourself up for failure.

5 Leadership Changes Vital To Enterprise Innovation

Source: 5 Enterprise Innovation Leadership Changes

By Brant Cooper on February 3, 2016

Every new year brings optimism. In January, we declare our resolutions, even if they’re the same as last year’s. And, each year, large enterprise CEOs inspire employees with a call to action: “This is the year that we’re doing a big push to innovate.”

It’s a necessary first step to enterprise innovation, but that alone will not be an organization’s saving grace. If you want employees to innovate, they need to work differently, and it’s up to the leadership to create an environment that enables them to do so.

Here are 5 of the biggest leadership changes that drive real results:

Walk Back Wall Street

In the 1970’s, Milton Friedman argued the role of business was to maximize value for shareholders. Unfortunately, when the primary focus of large corporations is hitting quarterly earnings, it’s like leaving Michael Jordan in the game for all 48 minutes, every game, all season. Inevitably, he’ll burn out.

What you do to maximize profits today, is different than what you’ll do to maximize quarterly earnings, yearly earnings, etc… Take Honda for example, they have a 500-year plan. Larry Fink, BlackRock CEO (the world’s biggest investment firm that manages $4.6 trillion) also just shared a letter to all CEO’s The world’s largest investor just sent this letter to CEOs everywhere | Business Insider in an effort to combat short-termism.

Making Wall Street happy through the next earnings report means incentivizes lower operational costs, increased productivity, increased sales, and ultimately quarterly profits. We ask questions like ‘what’s the return on investment?’ and ‘when will we see the return?’ This is valuable for existing products and short-term profitability, but when venturing into unknown and innovative territory, that’s not what we want to incentivize.

In order to innovate, we need to incentivize things like understanding customers’ needs, taking risks, learning and iterating on ideas to get them right. This is why companies like Amazon have publicly stated they’re not about profitability Why Amazon Has No Profits (And Why It Works) – Andreessen Horowitz . Instead they reinvest profits back into the business to grow and explore new markets and products.

So ask yourself, are we going to maximize shares over value, or are we going to maximize creating value for our customers and for our employees, and then also for our shareholders? Have you truly maximized shareholder value if your company is disrupted because you were only focused on the next quarter?

Creating a Culture of Safety

It’s a humorous contradiction when senior leadership goes around telling people to “be more innovative! Be bold! Take action!”, but the culture in place makes doing that seem foolish. (In our guide on 5 ways to spark innovation 5 Ways to Spark Innovation at Your Organization we dive deeper into how you can create the space and environment for teams to innovate)

Without instilling a culture of safety, the existing structures and success metrics in place will lead to fear and inaction, not successful new products. Instead, the push for bold behavior needs to be coupled with a culture of safety.


For example, instead of a top-down mandate, General Electric used a program called Fastworks How GE Applies Lean Startup Practices . They started a grassroots culture that embraced nimble experimentation and failing small instead of failing big. As a result, they’ve had lots of success and a massive internal transformation.

The CEO of another one of our clients had a team come up on stage at their leadership summit to share a story of a new product initiative that was put to sleep after some discoveries that invalidated the product. The CEO showcased their “failure” to encourage similar behavior.

In order to create new wins, your organization needs to embrace learning instead of fearing failure.

Reign In The Lawyers

Universities and large organizations love to tout the number of patents they have earned. In reality, there’s literally no value for society, customers, or even shareholders inherent within patents.

Despite their technical origin, patents today are written by lawyers, for lawyers, not innovators. They slow down new value as R&D stops at issuance instead of applying the new value in the market. Beyond that, patent litigation reduces profitability, used typically only as a means of protection against the very real problem of patent trolls.

Contrast that with a public statement made on June 12, 2014 by Elon Musk on behalf of Tesla All Our Patent Are Belong To You | Tesla . “Yesterday, there was a wall of Tesla patents in the lobby of our Palo Alto headquarters. That is no longer the case. They have been removed, in the spirit of the open source movement, for the advancement of electric vehicle technology.”

Not only does this enable a greater advancement for society, but it enables Tesla as a company to focus on what matters – bringing technologies to market, not to patent.

It’s time to move the innovation goal posts. Let’s not stop at patents, but move the innovation needle to marketization.

Mentor Not Manage

Managing people makes a lot of sense when there are very specific tasks and outcomes. It makes sense on existing products that need repeatable processes.

But, that’s not how innovation happens. Embracing learning Fail Learn Fast - MOVES THE NEEDLE over execution and instilling the right mix of people and process around the 3 E’s of Innovation: empathy, experimentation, and evidence is vital. In order to instill those values and processes — mentoring is the key, not managing.

Mentor not manage: http://www.movestheneedle.com/wp-content/uploads/2016/02/mentor-not-manage-300x143.png

Keep in mind that when we say mentor, we’re not simply talking about how can you help your young employees manage their career path. That’s part of it, but it’s really about how do we mentor inside the unknown part of our businesses. How can we help guide teams to expose their own assumptions, run experiments to generate data through customer interaction, and use that data to make evidence-based decisions. It’s what creates the environment for insight and gets teams to work in this new way.

Enterprise Innovation Is For The Many, Not For The Few

Way too often we see big corporations try to solve for the innovation problem by leaving it all up to an 5-person innovation lab. This is a step in the right direction, but one team won’t be the saving grace of an entire organization.

Innovation needs to be everybody’s responsibility. All employees should be closer to the customer and capable of not only finding, but taking action upon new insights. We saw a finance team within Intuit unlock tens of millions of dollars upon interviewing customers to learn that even though their credit cards expired, they still wanted to continue their subscription. Marketing people who learn entrepreneurial skills can test new customer acquisition and conversion ideas. HR folks can improve internal process.

Innovation can (and should) start small and then snowball into culture of innovation and experimentation. Form one team, then use that to begin shifting the way other teams work. Use small wins and growing evidence to inspire others to work in a different way, and soon that new way can become the norm. Not everyone will be an innovator, but innovation can come from anywhere.

Innovation isn’t guesswork, nor are there any silver bullets. What we do know is that we do have the power to create environments where innovation is more likely to emerge.

To get started, check out our guide on 5 Ways to Spark Innovation in Your Organization 5 Ways to Spark Innovation at Your Organization.

Fail & Learn Fast

Source: Fail Learn Fast - MOVES THE NEEDLE

By Jeremiah Gardner on November 25, 2015



It’s true, there is no lack of failure in starting new ventures. The likelihood of failing with a startup, new innovation initiative, or new product extension is much higher than the likelihood it will succeed. Just because those are the hard facts, doesn’t mean failure is an acceptable outcome.

Yet, in startup culture, the phrase, “Fail Fast” has become something of a mantra to live by. Founders, advisors, mentors, and investors treat these words as a startup catch phrase.

Sumner Redstone’s famous quote, “Success is not built on success. It’s built on failure. It’s built on frustration. Sometimes it’s built on catastrophe,” is more truth than platitude in the minds of many a founder than they might want to admit.

But failure isn’t a goal.

Failure, in and of itself, is bad. Failure means something isn’t working. Failure means you’re headed down the wrong path.

By definition, a fail-fast system is designed to immediately report any condition that is likely to lead to failure. Lean innovation is such a system. It is designed to rapidly test your assumptions and produce evidence an idea is worth pursuing.

Simply failing, but doing it quickly, misses the entire point. Failure without learning is always waste.

Failure isn’t the goal, learning is.

Fail-fast systems aren’t about failure, they’re about learning. In that sense, learning happens in both small failures and small successes. Wins and losses. Achievement and defeat.

We can’t celebrate massive failure without also celebrating minute success. And ultimately, we need to celebrate learning.

The truth is, if you can learn faster than anyone else, chances are you’ll discover a pathway to delivering real value to real customers.

The core metric of any new venture is learning (and subsequently following the learnings you’re gaining). It is the driving force of any innovation effort.

Which is why I constantly find myself advising founders not to “Fail Fast” but to build their ability to “Learn Fast.”


  • What do you need to learn right now?
  • How do you celebrate learning in your organization?
  • How can you increase the speed at which you’re learning?

**Originally published on jeremiahgardner.com (http://jeremiahgardner.com/blog/fail-learn-fast/)

Eric Ries Interview: 4 Seeds For Planting Lean Startup And Continuous Innovation In The Enterprise

Source: Eric Ries Interview: 4 Keys to Enterprise Lean Startup

By Brant Cooper on May 18, 2015

Perhaps the most common question we hear is, “How do you get started doing Lean Startup in the enterprise?” Practitioners want to figure out how to get leaders involved; leaders worry about the level of effort required to implement a top-down rollout. We always get a kick discussing enterprise lean startup challenges with The Lean Startup author Eric Ries, so welcomed the opportunity to do so during his recent Kickstarter campaign. We hosted Eric on our April live Lean Lunch Google Hangout, who revealed some secrets to getting senior management—and then everyone else—onboard when adopting lean innovation.

Here are 4 great principles to get started:

#1. Start small

In the same way many entrepreneurs and enterprise innovators focus on scale too early, so too with enterprise Lean Startup. You can’t get a 100 customers, if you can’t get 1. Similarly, you want to iterate on your early experiments, and then show good results to senior management. Don’t waste time trying to convince senior leaders to upend the way the company has been doing things. Show them that Lean Startup style experiments actually work for the business, that they make a difference, and that it’s valuable to work that way. “A common pattern is somebody in the organization who is quite visionary but junior, has the insight to [experiment],” Ries said. They get some good initial results from their experiments, and then demonstrate it to senior leadership. The junior person then says ‘This isn’t just a theory, this works.’ And in a back and forth process over a year or two, we have senior leadership getting more bought in. And we’re getting more examples of it working. “Once you’ve done that, at a certain point, it reaches a tipping point where the senior leadership says ‘OK, this is no longer a funky grassroots experiment, we want this to be the way that we do work when it comes to innovation across the company and we are going to make that happen,’ Ries explained. “So there is that switching moment where you cross the chasm and say ‘Now we are going to make the mainstream employees of this company aware of this.’ But you don’t start with that—just like you don’t start a product launch with a Super Bowl ad.”

#2. Start Inside

While customer-facing experiments face obstacles from functional support departments like legal, compliance and marketing, internal business process improvements can avoid them. Further, small internal process “wins” are often more easily achieved, yet are highly visible. Ries conducted three days of intensive Lean Startup training for a large enterprise doing an internal process startup. The team came up with a different way to organize teams, internal sales strategy, sales training, and budgeting that could produce dramatically different results for their customers. “But it touched twelve different unmentionable issues in the company,” Ries said. “And they had to present their plan to the big boss, a very scary person who controls key resources in the company, the kind of person you really don’t want to piss off. This team was very afraid. Before they presented, we decided that instead of reallocating all these resources to address this pain, they would do an experiment to make sure it’s a good idea. [Making the change] for one team, one process, one location – like a classic Minimum Viable Product. Then we can measure its impact, and once we know what the impact is, we can know how much cost we should be willing to endure to roll this thing out across [multiple] locations.” The team got excited about doing the small experiment first. But in scheduling the presentation, it turned out that the big boss was going to be on vacation. He had to Skype into the presentation, interrupting his vacation.“And the team is just absolutely bracing for him to take their head off,” Eric said. But that’s not what happened.“The big boss said, ‘You know, this is a good idea, I never thought of it before. I want this rolled out across all our teams at all of our locations by next month,’” Ries said. “To their credit, the team said, ‘Now that we know you think it’s the greatest idea since sliced bread, we still think the right approach is to experiment and make sure it’s actually a good idea before we scale,’” Ries said. “It made such an impression on him. He instantly went from lean skeptic to lean evangelist in the company.” Small scale, internal projects can have a major impact on getting buy in from senior leadership and the rest of the company. And it avoids appearing to be shoving Lean Startup methods down everyone’s gullet. Plus, small experiments are lower risk and you start to remove the fear of change.

#3. Start Visually

One of the core principals of “The Toyota Production System” aka, lean, is “visual control”. Transparency into process, visual indicators of deviations from standards and other applications ensure that problems are not hidden from view. Continuous improvement stems from resolving problems as they’re found as opposed to, for example, creating less efficient workarounds that become buried from view.

While many are quick to push tools to manage process, we’re big fans of using analog tools like the MTN Experiment Map and whiteboards to manage lean innovation experiments. One of the biggest benefits of using a lean startup canvas or poster or whiteboard is that other people will stop and ask what you’re up to—so you have an opportunity to educate them—and they will be able to see progress in your experiments. This is a powerful way to “train up.” In other words, teach leaders lean innovation through sharing stories and evidence. “One internal entrepreneur I know wanted to have his whole cross-functional team working in one room, which is a very unusual way of working inside a company,” Ries said. “He scouted out different rooms at his company to use, and he found a room that just so happened to be located between the offices of some top executives and the bathroom that they use. Every day, those leaders are walking by his big room, where all this stuff was on the wall including prototypes, and it’s just irresistible to pop their head in and say, ‘How’s it going?’ Not only do these tools provide a visual demonstration of your progress. But they also encourage teamwork in defining assumptions and prioritizing them—putting those Post-Its on the board is a valuable team process. It also unearths the conflicts. Conflicts are inevitable, so the earlier and easier you uncover them, the better. Analog tools lend themselves really well to that philosophy. “There’s a misconception that tools, and robots, and automation are the solution,” Ries said. “When really the solution is the philosophical process. Once you have the philosophy, tools can help support and facilitate, but without it, those tools are useless.”

#4. Start with Strength

“Every company I’ve worked with, there is a company culture where there is a dominant function,” Ries said. “Some companies are engineering driven, others are finance driven; others are sales driven.” In the Lean Entrepreneur, I called this the company’s shadow force, because it often isn’t obvious. One way to figure out the dominant function of a company is to ask: What is the background of the founder, current CEO, or other management team members? How does one move up the ranks?“Companies have biases, and having your initial experiment with Lean Startup aligned with those biases is very helpful,” Ries said. This includes, even, how you talk about Lean Startup.Several companies we consult with have renamed lean startup in order to “make it their own.” One company calls it “Build Measure Learn,” another “Lean Innovation” and “FastStart”; GE calls it “Fastworks”. Many companies have a “not invented here” culture that can get in the way of adopting external ideas. But when people in the company infuse Lean Startup ideas into their existing culture, they find more success getting started. “One manager at a large tech company told me he spent a lot of time banging his head against the way trying to get people in that company to adopt Lean Startup,” Ries said. “Finally, someone senior told him, ‘Stop talking about Lean Startup! We don’t believe in that, and we don’t want to hear about it.’ The manager said, ‘OK, no problem.’ So he invented his own terms that mean the exact same thing, and just started doing it with his teams. All of a sudden, people were getting all excited about it instead of [rejecting it because it was] not invented there. It was a completely unique, indigenous innovation that people could get excited about.” Senior leadership—and often the employees—don’t want to feel like the company is being invaded.“Companies have to make it their own, it has to feel like a local thing,” Ries said. At Moves the Needle, we use our own adapted lean startup principles such as the Value Stream Discovery Dashboard to experiment on how to best introduce, implement and scale lean startup into enterprise companies. It’s meta-lean startup. You don’t need permission to innovate. If you are a Lean Startup practitioner or an aspiring Lean Startup practitioner, you don’t need to wait until someone gives you permission to innovate. You will be more successful when you find ways to improve how work gets done and create new value for customers. You can, however, plant the seeds for more lean innovation at your company.

Watch the entire discussion below:

Telus Lean Leadership: Push To Innovate Is Only Half The Battle

Source: Lean Leadership at Telus - Creating an Innovation Culture

By Brant Cooper on February 25, 2015

Last year I was fortunate to hear GE’s Chief Learning Officer, Raghu Krishnamoorthy, speak on company culture. GE, along with Intuit, is probably the furthest along in not only implementing Lean Startup, but also changing the culture that empowers it to succeed (one of our 5 ways to spark innovation). This is where Lean Leadership https://www.lean.org/images/october_webinar_project_slides.PDF comes in.


The chart above is my version of one that Raghu shared. (It’s not an exact copy and I’m still noodling over it.)

The point is that organizations often talk innovation and the need to think boldly, but without leadership “walking the talk” and “having the back” of innovators, you’re unlikely to have a serious impact on “real” innovation.

The point came up again in our recent conversation with Shawn Mandel, VP of Digital, and Carlos Oliveira, Senior Strategy Manager for the Canadian Telecom, TELUS.

TELUS is one of the largest telecommunications provider in Canada. Several years ago when their quality, speed, and delivery were faltering, they hired Shawn to bring Lean Innovation to their enterprise.

Below are the 3 keys to lean leadership and creating a culture where innovation is likely to occur:

Begin Your Journey With the Customer

“The journey actually begins with the customer,” Mandel said. “Customer behavior was changing, and the needs of customers were changing. They were telling us we were too slow. Quality was not where it needed to be. Cost wasn’t where it needed to be. Delivery cycles weren’t where they needed to be. The answer was to do a complete 180 on everything from our priorities, our strategy, our technology, our communications.”

Doing a complete 180 on so many fronts was hard work, but at the core it was guided by a simple principle, according to Mandel: Put the customer in the middle of everything you do.

Mandel’s mission was to implement Lean Startup in the enterprise Enterprise Lean Innovation Bootcamp . He went through a series of painful meetings to persuade TELUS leaders to adopt Lean Startup methods.

“I still remember walking out of that last meeting when they said, ‘Okay, Shawn. You can go do that,’” Mandel said. “I don’t think they knew what they really signed up for two-and-a-half years ago, but today they have a much better idea of that.”

With Strong Leadership, the Rest Is Just Details

“A mandate came from the top down, that our mantra is: Customers first,” Mandel said. “We have 42,000 team members galvanized around one cause.”

However, employees often need to be convinced that they have the power to experiment and take risks.

Mandel told a story about partnering with an EVP of technology to discuss with their team that we want them to take risks and pave a new path.

“Half of that room didn’t believe us,” Mandel said. “Don’t make the assumption that just because you say ‘You’re empowered,’ that they believe you.”

Empowering people is not a one-time event. It’s an ongoing attitude. For teams to be truly empowered, their manager has to be their teacher, mentor, and advocate.

“The notion of the courage to innovate, embracing change, passion for growth and learning—a lot of that is baked into the TELUS culture,” Oliveira said. “A lot of what managers do now [with Lean Startup] is help employees to build capacity, help them understand how to experiment. It has been a cultural evolution.”

A recurring theme that we’ve seen with Moves The Needle clients is that using Lean Startup to transform business practices requires strong leaders at the top of the organization to give cover to teams while they are experimenting.

“With strong leadership, the rest is just details,” Mandel said. “Strong leaders create the environment. Strong leaders shelter their team members from noise and destruction, [which allows] that empowerment.”

Organizational Transparency

The typical pattern of a company introducing something completely new is to “do a big reveal after a huge capital spend only to get feedback from your customer when it’s too late—on the other side of that delivery cycle,” Mandel said.

“Everything’s very secretive. Everything’s about a big reveal. But the game has changed. Things are changing and evolving, and transparency becomes your ticket. That transparency is what drives the momentum.”

These days, Mandel said, “We spend a lot of time building in public and in open beta with our customers.”

It’s similar internally. We don’t want to fail, so we spend time building and overbuilding before releasing to customers. Internally, we shield “failure”, when the data and insights of failure will actually benefit the rest of the organization. Counter-intuitively, perhaps, exposing failures increases the safety of being bold.

Transparency drives change, empowerment, and momentum. It’s scary to practice transparency in an organization, but it shouldn’t be. High levels of transparency elevate the quality of innovation and has a large impact on an organization. When an organization has a culture of transparency, it operates and competes on a higher level. The alternative is giving up that opportunity for greatness.

Mandel posted their version of experiment posters (like our MTN experiment loops) on walls in conference rooms and encouraged anyone who walked by to take a look at the progress of their innovation projects, from the idea stage all the way through to the results of experiments.

Watch the entire discussion below. Would love to hear your thoughts on the graphic above, too!

Business Model Innovation At Edmunds.Com

Source: Business Model Innovation Case Study at Edmunds.com

By Brant Cooper on January 28, 2015

Some companies adopt Lean Startup to become more agile on the sustaining side of the innovation continuum. Others do so, because they can see disruption on the horizon. Edmunds.com’s disruption had already arrived so for them, business model innovation wasn’t a should, it was a must.

Our November 2014 Lean Lunch featured the President of Edmunds.com Seth Berkowitz. Edmunds.com is an online publisher of automotive information that helps buyers make purchasing decisions. The company has been around since 1966, and got its start printing booklets of automotive specifications for car shoppers. The company launched its website in the mid-1990s, with the same objective—to provide people with car specifications, pricing, and reviews to help them decide which car to buy. Over the years their web traffic grew to an audience of over 18 million people per month, generating hundreds of millions of page views. Car brands represent one of the largest advertising segments in the world. The Internet has been good to Edmunds.com. The recession of 2008, not so much.

Business Model Innovation

The late 2000s brought two huge wake-up calls to Edmunds.com. The first was the auto industry: “Our largest [advertiser] clients, GM and Chrysler, declared bankruptcy and [were working through] restructuring with the federal government,” Berkowitz said.

The second was the introduction of the iPhone and Android smart phones. “The second [disruption] was the shift to mobile. [Today], forty percent of our page views come from mobile devices.” Edmunds.com faced a one-two punch of a significant decline in Internet advertising and a shift to mobile devices that does not support the same advertising model.

“The first thing we did is we said, ‘How do we optimize our desktop and laptop [online advertising] business to give us more time to figure this mobile thing out?’” Berkowitz said.

Instead of just using best practices, which in changing markets are necessarily stale, Edmunds.com implemented lean startup practice to institute continuous learning from their customers and uncover new ways to create value for them. This sustaining innovation depends on testing ideas, just like other kinds of innovation.

“For a company of our size, and for the dollars that were at stake in these decisions, using the lean method to get out there immediately with clients, without something baked, throw it against the wall, get their feedback, come back, do it again and do it the 3rd time—doing this over a 90-day period was pretty quick,” Berkowitz said. “We completely collapsed and destroyed and then rebuilt our ad model between 2014 and 2015.

They even stumbled onto their own version of Eric Ries’ problem and solution teams to think boldly:

“We have this thing called an Ad Summit,” Berkowitz said, “Where we invite six people from six different groups in the company to present for 10 minutes or less on their perspective on the problem as it was framed. Then we have 90 minutes of free flowing discussion, with a notion that we are going to rethink our business model in that context. I don’t think you could do that every week in every area of the company, but we’ve been trying this internal summit on thorny issues since we were happy with the way it worked with respect to rethinking our ad business.”

Out of the summit, Edmunds.com assembled a cross-functional team to address the need for better ad performance. They also had leadership that inspired the teams to solve the problem by experimenting.

Based on conversations with customers, who didn’t always see the same value in web page advertising Edmunds.com thought they should, the team decided to make some major changes to the way they packaged, marketed, and sold their advertising inventory. Between June and September of 2014, Edmunds.com collapsed their 83 retail sales units into just six segments, each of which was defined by a particular car-buying behavior. When Edmunds.com pitched this new segmented model to their customers, it wasn’t immediately embraced.

“We learned that our customers were using rules of thumb that had been developed many, many years ago,” Berkowitz said. “We started to work with them on A-B testing to show them that their ad performance could be improved if they would embrace our new audience-based model.”

Through those conversations and learning with customers, most advertisers were convinced to adopt the new model. However, they did receive push-back from a few “challenger” brands whose goal was to use a “whole page-based” advertising option on Edmunds.com as a messaging hub to their consumers.

Customer Development is not easy

It was frustrating not to be able to convince those advertisers. “I watched my team […] bang their heads into the wall,” Berkowitz said. He told them, “One of the things we need to do is listen.” It was a good lesson for us and part of the lean process is to throw stuff against the wall quickly and then learn. For the challenger brands, we developed a completely different model which created these clear channels for them, that gave them a 100 percent share of voice on this specific set of pages that they wanted to create as their hub.”

The Edmunds.com team then offered both of the advertising models to all of their advertisers.

“Essentially, we gave advertisers a choice: you could buy our 6 segments and we believe that it will yield the highest performance for you,“ Berkowitz said. “But if you’re determined to own a specific area on Edmunds and have that hub, we can offer that up to you as an alternative.”

“I think the biggest thing is that people have to overcome the fear of not having all the answers in front of the client, or saying to them, ‘This is an experiment or this is a provisional plan that we have. Let’s get your feedback,’” Berkowitz said. “It used to be that the thought was everything had to be perfectly polished, then you take it out there, and you didn’t want to show any kind of vulnerability. What we learned is that our clients actually want to work in partnership with us and feel like they’re part of the process.”

Lean Startup & Cultural Transformation

Going through this process in a time of crisis inspired new innovation processes throughout the company as well.

Edmunds.com clearly made some big changes to its business model, and to its innovation processes along the way. But the biggest change has been rethinking its core purpose and strategy. Throughout all this, and through evolving its relationships with car dealers, Edmunds.com has positioned itself as a platform provider that improves the car buying process. Not just providing consumers with information, but changing how buyers and dealers communicate, and providing tools to help the buying decision.

“In terms of the control of chaos, we actually have something that we’re rolling out this month [November 2014], that wasn’t even on our road map at all in the beginning of the year,” Berkowitz said. “It wasn’t even in our mindset. We ran a hackathon, and a company called Car Code won. Car Code is a simple service that enables consumers to send outbound text messages to dealerships. We invited them here for an accelerator program, and at the end of it we bought them. Now we’re offering Car Code for free to our 10,000 dealer partners…We’ve developed the insight that you can’t develop all the ideas and you don’t have the monopoly of all the ideas. We’re really embracing the notion of more hackathons, and APIs for the developer community to build things off of our data that we could then take a peek at.”

Using lean innovation changes expectations of what leadership is as well. Leadership must not be about having a clear vision to simply execute on. It’s about keeping communication channels open, exposing the big problems that have yet to be solved, and demonstrating progress toward solving them. It’s about a willingness to “fail”, being open to experiments that take things in a new direction. It’s about welcoming chaos.

Watch the entire discussion below. Also, tune in Friday, January 30 for our next Lean Lunch featuring Canadian Telecom giant Telus. You will be amazed by their lean innovation story! —>

Answering The Lean Startup Call To Adventure!

Source: Answering the Lean Startup Call to Adventure

By Brant Cooper on December 6, 2014

Innovate or die. Fail fast. Change is inevitable.

No doubt, large organizations have a big challenge facing them. According to Richard Foster, of Innosight, the average lifespan of S&P 500 enterprises as dramatically declined over the last 70 years. Most large enterprises became successful by executing well in a known market with known products. Innovation, however, happens in the unknown and you can’t execute in the unknown.

As a result, large organizations are typically not in touch with the mojo that got them started.

Here’s the trick: It’s the people, not the process.

The question is, how can a large organization re-capture the entrepreneurial spirit?

Just as there is no blueprint for startup entrepreneurs, so goes for internal entrepreneurs. What’s required is Education, Enablement and Empowerment.

Continuous Innovation Ingredients

I recently participated in a Lean Startup Conference webinar hosted by Sarah Milstein Sarah Milstein (@SarahM) | Twitter , CEO of Lean Startup Productions, with guest Carie Davis Carie Davis (@CarieDavis2) | Twitter , Global Director of Innovation and Entrepreneurship at The Coca-Cola Company. Our conversation revealed some of the ingredients necessary in the recipe for building a culture of continuous innovation. The ingredients are relevant to company product initiatives, as well as internal processes; some are relevant to practitioners and others to leaders.

The Ingredients:

#1. Create a sandbox separate from the core business.

Milstein asked whether Lean Startup practices can be integrated into day-to-day operations of the business, or whether it should be in its own sandbox. Davis said that in her experience, there is a spectrum that spans from day-to-day practices on one end to breakthrough practices on the other . In both cases, though, innovation leaders need to change behaviors in the organization.

“It’s very hard to fight against ‘We make the most money doing X, let’s not put money against doing X,” said Davis. So, to avoid continually having that fight, leaders can advocate for devoting a certain amount of resources to the innovation sandbox. The sandbox is a safe place to learn and fail. The sandbox could be a formal program, or it could be a percentage of a business unit’s time and budget devoted to Lean Startup-style experimentation outside existing markets.

It’s true that the core business needs to be protected from the wacky ideas that are welcome in the sandbox. Plus, with an area, budget, and resources devoted to lean innovation, teams feel that they have permission to experiment, fear of failure recedes, and they are able to commit to Lean Startup principles long-term. Then you start to see some wins and gain momentum for innovation initiatives. Some amount of cover from organization leaders is essential, which we discuss further in ingredient #4.

The ultimate goal is for core business to work hand-in-hand with breakthrough innovation initiatives. The sandbox ideas are only incorporated into the core, when they have demonstrated they are ready to leverage the assets that the core business brings to bare.

#2. Create a place for entrepreneurial folks to gather and share.

Even if the organization hasn’t committed to carving out resources for a sandbox, anyone can create a place for entrepreneurs within an organization to gather and collaborate. One might create an internal meetup group for Lean Startup enthusiasts. It’s likely that as people join the group, you discover some are senior leaders, who can advocate for resources from the organization.

In Davis’ experience, “There are always people who are constructively discontent. They know there’s a better way, maybe they just haven’t been exposed to it yet.” The Coca-Cola Company welcomes those kinds of people in their Entrepreneurial Innovation program. For organizations without a formal program, the creativity of those folks can still be harnessed and organized if entrepreneurial folks organize themselves.

(Join our online community here!) https://www.linkedin.com/groups?home=&gid=4622158&trk=anet_ug_hm&goback=%2Eamf_4622158_403624

#3. Change the measurement and reward mechanisms for the innovation sandbox.

Our conversation in the webinar focused on the role of leaders in continuous innovation. Milstein pressed us on what leaders can and should do to make things happen for continuous innovation in an organization.

Leaders and organizations generally, need to change how they’re measuring innovation practices. Lean innovation can’t be measured on the immediate return on investment, because breakthrough innovation takes time and goes through numerous iterations (read: failures). The organization needs to encourage experimentation—which often leads to the invalidation of hypotheses. When working with lean innovation teams, leaders have to encourage the ability to fail.

“’You can’t fail, we’ve got objectives!’ If you put the [innovation] process against that, it’s just going to create confusion for people. They have to know that this is something they are working on outside of their current objectives,” said Davis. “You have to change the reward mechanisms. You have to give people some runway to explore things. Why would they do it if the reward mechanisms aren’t set up to be appreciated for that?”

Organizations need to introduce a high tolerance for failure of business ideas in the innovation sandbox, which means traditional measures and rewards are counter-productive. However, validated learning can be measured, and can also be used to teach the rest of the organization.

#4. Develop leaders who give teams freedom to explore and who mentor the right way.

“In a bigger organization, is part of the role of a leader providing cover so that teams they are mentoring have room to fail, have room to behave in different ways than the organization is used to?” asked Milstein.

In response, Davis said, “My dream would be if you had a leader who has their objectives that they have to deliver for the year but as a piece of that, they’ve got to give a few teams a chance to operate differently and a explore some of these weird opportunities. And that in itself is the cover.”

To reap the most benefit from lean innovation programs, leaders need a healthy appetite for weird ideas and the comfort to give teams some autonomy.

Milstein then addressed me, saying, “You’ve told me in other contexts that one of the things you see a lot in enterprise teams is that they want to pivot very quickly. They tend to hit the pivot moment long before people would in a standalone startup. Where does that come from, and what’s the role of leaders in that?”

My response was that some people take the phrase “fail fast” too literally. You pivot only when you are done iterating—when you’ve run through all the experiments that will validate or invalidate an idea. It could be that at the first sign of failure they think it’s better to drop out and go find something else. They’re searching for validation as quickly as possible so they aren’t perceived as having failed. This is different than the startup world where people try to break down that wall and continue to persevere, look at all the angles, run a thorough number of experiments on many different types of customers. And a good mentor can help lean innovation teams in the enterprise adopt this persevering attitude.

We’re asking leaders to mentor in a fundamentally different way than they have been used to in a large organization. They need to understand when they’re in “execute” mode and when when to be in “search” mode. A good Lean Startup mentor will:

  • Teach people “how to learn and how to experiment,” in Milstein’s words.
  • Guide their team through the lean innovation process mindfully, because there will be failures along the way; teasing out what to do if an experiment fails is the key to discovering what does work. Good mentors help teams determine when to experiment more, when to persevere, when to iterate, and when to pivot.
  • Give teams enough runway. Leaders should encourage people to go through the painful process and demolish that wall of failure after failure. Maybe that breakthrough innovation is right on the other side of that wall. Going all of the way through that process can take time, and sometimes resources. Leaders need to give their teams enough runway to see that process all the way through.

Davis told a story of a team that would be in a very different place if it weren’t for the fortitude of their mentors: “We saw a team who gave up when they found out someone else was already working on [their problem]. That was a moment of heavy coaching: ‘You guys could actually do it better, what is taking [the other company] so long? Why don’t you embrace this opportunity to really blow this thing out of the water?’ That ended up a win because the coaching turned them around.”

#5. Teach the method.

This is another ingredient that anyone in the organization can add. You can start the lean innovation conversation with leaders by buying the C-suite their own copies of The Lean Startup The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses:Amazon:Books by Eric Ries.

Organizations with formal lean innovation programs can teach a course on some of the methods, which is what Davis has done at The Coca-Cola Company. Individuals whose managers aren’t on board with their experimentation can find a sponsor from another function or business unit.

For organizations without a formal lean innovation program, Davis gave this advice: “I encourage anyone working in an environment hostile [to new innovation practices] to understand the objectives of their manager. Understand what they are worried about. Treat them as a customer, someone whose needs and pains you also have to meet.”

In other words, be a Lean Startup whose product is lean innovation practices! (Yes, it’s all rather meta.) Anyone can run small experiments and present validation results to their manager. That starts to train managers to assess projects in a different way. Get leaders to react or you’re paralyzed.

Thanks to Carie Davis for sharing her experiences! Watch or listen to the whole webcast below:

Innovation In Large Organizations: Siemens And Lean Startup

Source: Innovation In Large Organizations - Siemens Interview

By Brant Cooper on October 13, 2014

Not unlike startup entrepreneurs, intrapreneurs seeking to foster innovation in large organizations often obsess over technology. They feel as if innovation must involve invention (see the difference in our article What is Innovation How to Innovate - What Exactly is Innovation ).

On the sustaining innovation end of continuum, this results in new features, or me-too products that don’t truly represent “innovation” at all. On the “breakthrough” side, the focus is typically on invention; in other words on creating new technology. Historically, this has resulted in the “labs in the wilderness”, where new stuff is actually invented, but never sees the light of day.

Lean-Entrepreneur-Innovation-Continuum http://www.movestheneedle.com/wp-content/uploads/2015/09/Lean-Entrepreneur-Innovation-Spectrum-300x133.png

There’s another way of thinking about this, however. In reality, “breakthrough innovation” is in the eye of the beholder. If you take a product successful in one market and deliver it to a new market (Steve Blank market type: segmented niche), it’s quite possible that said product is disruptive to the new market even if the technology has been around for years.

So take an existing successful product, introduce it to a new market — and boom! — breakthrough innovation, new revenue stream, high-fives all around, right

Well, not so fast. It’s a lot harder than it sounds!

The tendency is to think that rolling out the new product is simply a matter of execution, in other words, doing the things you already know how to do well: repackage features, rebrand, shove it down the channel and voila!

Actually however, it’s a matter of search. A new market requires you to look at what product capabilities are necessary to solve the specific problems the new market has? How does this market expect to be marketed to? How do they expect to buy? Are internal operations prepared to support the new market?

Even if you’ve sold to this market in the past, in today’s rapid change environment, things have likely changed quite a bit. The organization needs to learn all over again.

We spoke with Karsten Newbury, SVP of Siemens PLM, who leveraged Lean Startup principles to learn before executing. We encourage you to set aside an hour or so to listen in on the Karsten’s journey and how to foster innovation in large organizations.

But for those who can’t wait, conversation highlights below in the video:


Siemens has a very successful CAD and Engineering tools business they sell to very large enterprises globally. The question for Karsten’s group was, “can you take this successful enterprise product and re-launch it for the SMB market.”

This was not a technology problem. They carved up the product and re-packaged it and went to market. While they had some success, after 3 years market penetration was still limited. They needed a better go-to-market strategy.

Karsten started running experiments, small pilot activities, to try and figure out a new business model for this market. He did this before Eric Ries’ book, The Lean Startup http://theleanstartup.com/book. At that time, Karsten had a difficult time explaining to his team, colleagues and management, why he was doing these tests.

“People couldn’t understand what we were doing; they kept asking for the business plan and that sort of thing.”

The Lean Startup was eye-opening. Not just because it provided a lexicon to describe what he was doing and a means to share the ‘why’, Karsten found that in reality he wasn’t being disciplined enough in how they were doing validation.

So while yes, the product was already in the market, it took 3 years (1 release/year!) to get the right product to market.

“There’s so much waste to avoid if you become more disciplined about customer validation. It’s hard work. Read the book and understand it, but applying it is hard.”

As if straight from The LEAP-JOURNEY Keynote: Agile Australia 2014 , Karsten went in search of allies, in order to ‘become more disciplined.’

First he went to the CIO, who was a key ally. He was responsible for the whole Siemens PLM software business. He controlled a lot of the corporate infrastructure, so Karsten never would have been able to run e-commerce experiments without him on board.

He convinced the head of Engineering to look into Lean Startup, by inviting him to the annual conference. These are smart people. They ‘got it.’ He said, paraphrasing:

“I thought this was going to be a fun thing about startups, blew me away, this is a new management methodology. This isn’t just about startups or running little projects or prototyping, this is a new way of thinking and working.”

The key to Karsten’s success in bringing on allies is to include them in the business case development. It’s not just about asking for things, but demonstrating the big vision.

“Unless I empower my business partners by giving them knowledge about what we’re trying to do and making them part of it I don’t have a chance in hell of getting anywhere. The CIO actually helped me think about the problem from a financial value perspective rather than just a technological one. He has a strong business mind. He wants to work on a real business problem.”

The same goes not only for IT and Engineering, but also marketing, legal and compliance. They have to be brought on as business partners, not service providers.

Siemens overall is a massive business with 100 billion dollar in revenue. They have an incredibly strong, global brand. Part of that branding describes how all web sites must look, including stringent rules around what you can do and can’t do. 20 years ago this made a lot of sense. But in an Internet world, not so much.

“If you sit down and explain what you’re trying to accomplish: Listen, I’m not just trying to redesign, but if I want to build an ecommerce site it’s going to look different. I need a pilot, let’s pick a region. I want a separate web site and run all kinds of experiments on it, without being bound by the corporate web design rules. We’ll show you the data regarding what changes work.”

And compliance. How do you grow while adhering to export compliance? Chunk off a little piece and experiment.

“The export compliance team was pretty nervous, but then as we moved through they started to see how it works, how it was automated, how it would actually make their lives easier; the toughest barriers you have to nibble away at and break down the barriers over time.”


Siemens lean startup venture into e-commerce has been a clear success.

They’ve already accomplished some of their primary goals: Since starting in late 2013, monthly growth rates of seats sold via the e-commerce site have been greater than 70%. More importantly, all business is new and not cannibalizing the perpetual license business sold through channel partners. The channel partners follow up on these and are able to build new relationships with users they would have never reached before.

As is part of the classic here’s journey, upon “enlightenment”, you must return to society with your newfound knowledge. As a result of Karsten’s work, other business segments inside Siemens PLM seek to join the e-commerce platform. Says the CIO: This is the biggest reward for me: to see the recognition of our fellow executives for what we’ve built!

“Lean Startup is not easy. It takes time. Maybe it takes too long. But we’re making progress. You just have to keep at it; it’s a question of mindset, and becoming aligned, one step at a time.”

Behavioral Economics Experiments For Lean Startups

Source: Behavioral Economics Experiments for Lean Startups - MOVES THE NEEDLE

By Brant Cooper on September 14, 2014

Rapid experimentation is a foundational principle of the lean startup movement, and also one of the most difficult skills to master. How we run experiments is simple, especially when we follow a disciplined process Lean Innovation Experiment Map , but deciding what to experiment with can be truly daunting. How do we prioritize the small experiments most likely to make a big difference?Behavioral economics experiments are “the science of why we do what we do”, and seek to discover how we might help our customers by encouraging them to make better choices. Choices that improve their financials lives, their health and their overall well being. If you’re not already familiar with the concepts of behavioral economics experiments, I’ll let Dan Ariely share his point of view on why it’s important to your new venture.

“In the future, we are all great people. We eat healthy, we call our mom and we save money. The problem is that we don’t live in the future. We live in the Now. In the Now, the environment determines our behavior. By designing the environment and creating thoughtful interventions, we are able to improve people’s decision making in a way that benefits customers while also growing the companies bottom line.” – Dan Ariely, Irrational Labs

How to use behavioral economics experiments in your lean startup?

First we start by considering when to use behavioral economics principles, or “BE” for short. In our experience, the best time to begin exploring BE is once you already have your MVP in place, and you have a steady flow of customers producing minimal baseline metrics. This is the perfect time to leverage BE experiments as you attempt to improve these metrics. Of course you should consider these principles from the start, but we’ve found a good foundation is easier to build on. Next, select a BE principle you’d like to use as a starting point for your experiment, and then identify the place in your customer experience when this principle might be applied. (For those of you new to BE check out a TED talk by Dan Ariely Dan Ariely: Are we in control of our own decisions? | TED Talk , and of course read his book, Predictably Irrational [http://danariely.com/the-books/] , read a few tips from Nir Eyal at his website Nir Eyal Bestselling Author and Behavioral Designer | NirandFar.com, and 4 detailed examples details from McKinsey&Co A marketer’s guide to behavioral economics | McKinsey & Company ). You can read more about BE on Wikipedia Behavioral economics - Wikipedia.

For Example: Consider the “Endowment Effect” (Reprinted from Irrational Labs http://irrationallabs.org/ Pricing workbook) The short version: We overvalue things that we own. You’ve likely noticed this throughout your life.

  • A friend finds a new apartment that is actually not very nice. Soon after signing the lease, however, they brag to you about how great the place is, how convenient the location is, and so on.
  • A couple begins dating out of convenience, only to later tell their friends how much they “really, honestly liked” that person from the start.
  • You buy a pair of shoes that are out of your budget but are very stylish and desirable. But after wearing them only once, you discover they are also extremely painful; you’re limping after only a short walk. You keep wearing them night after night, in the hopes that the pain will go away and it’s just a matter of breaking in the shoes.In a classic experiment that magnified this effect, Daniel Kahneman and colleagues took a group of students and gave half of them mugs for free. The other half were instructed to buy the very same mugs. On average, the buyers offered half as much as the mug-owners wanted for the same product.

So, what does this mean? Ownership instantly caused these people to double the perceived value of their mugs. That’s a powerful effect.

Research like this shows us that we overvalue things that we own.1 Study after study has shown that merely owning something increases our valuation of an object. This is called the Endowment Effect.

Product Tip: The more you can get customers to invest in the creation process, the more they’ll value your product.

So, how might you use the endowment effect mentioned above to increase the perceived value of your product? What hypothesis might you create, and how might you run a quick experiment to test your hypothesis? That’s BE + lean startup…Whichever strategy you choose, be sure to focus on a single behavior you wish to change, since changing multiple variables in your experiment is never a good idea. For example, you may wish to experiment with your product’s pricing strategy by using “anchoring” or “dominating alternatives”. Simply brainstorm a series of hypotheses based on potential behavioral interventions, using the BE principle you selected as a constraint.

Once you have a few experiment ideas, be sure to follow the disciplined experiment process Lean Innovation Experiment Map you already know from your LEAP training. When your experiment details are documented using your experiment map, simply run the experiments to see if your BE intervention moves the needle. Then return to the beginning of the process, and run your next series of experiments.

5 Lean Customer Development Hacks For Innovation Teams

Source: 5 Lean Customer Development Hacks for Innovation Teams - MOVES THE NEEDLE

By Aaron Eden on August 26, 2014

In large or long-standing enterprise organizations, innovation teams often struggle in customer development and getting in front of customers quickly. Yes, that perception exists in startups, too, but established organizations have a corporate structure (read: silos) that created distance and obstacles between employees and their customers.

In fact, people attending our workshops visibly wince when teams are instructed to generate hour-long experiments that involve engaging with real customers. This is especially acute when operating in business-to-business environments, where the assumption is that it’s impossible to contact lawyers or employees in a large enterprise in short order.

#1. The Lemonade Hack

Customer Development Hack #1 Lemonade

One of the first concerns teams worry about when it comes to customer development is putting half-baked product ideas in front of existing customers, potentially souring their relationship. A trick that specifically tackles this issue is to simply focus on the customers that you have already lost. What’s the worst that can happen? You can’t lose them again. What’s the best that can happen? Customers actually appreciate being talked to about how to solve their problems. If you develop some empathy for these lost customers, you just might win them back, turning lemons into lemonade!

#2. Imposter Judo

Customer Development Hack #2

How about putting the product idea in front of your competitors’ customers? Not only will you learn your shortcomings, you’ll also likely learn your competitors’. One way to do this is by targeting the Facebook fans of the competing product. While this strategy minimizes the risk of souring existing customer relationships, it should be used carefully. You’re not trying to ‘steal’ customers at this point; you’re trying to learn from them.

#3. Co-opt Sales

Customer Development hack #3 Co-opt Sales

One common issue teams grapple with is internal politics or the fear of internal politics. The fear is that the enterprise sales team, for instance, will be upset with the innovation team contacting “their” customers. Have you actually talked to the sales team? Did you invite them to participate? To get around this barrier, ensure that you have a cross-functional team that is comprised of at least one sales person who stands ready to leverage existing relationships.

Pretend you’re a lean startup and the sales team is your customer: talk to them. Who is the entrepreneurial sales person? What guidelines do you need to follow to make the sales team feel comfortable? What would it take for the sales team to say, “Yes, I’d like to participate!”

Additionally, look outside your existing customer base. In other words, become a startup sales person yourself and start at ground zero. Leverage your network to find one contact who you think has the problem you’re trying to solve and ask for 15 minutes of time. Make a cold-call.

You can’t find one? Really?

#4. Don’t pitch me, bro’!

Customer Development Hack #4 Don't Pitch me, Bro'

For many (most?) of your customers, the fear of upsetting the base is misguided. Customers are usually very excited and happy that you are trying to learn from them and taking steps to make your products better, but just make sure you are in listening mode. Nobody likes to be ‘pitched.’

While some experiments might involve selling a product, customers should be confident that their actual problems are being addressed. Real selling shouldn’t be happening until the team is confident that they are actually solving a real need.

Instead of pitching a solution, flip the conversation:

“Hi, I’m Brant and I help enterprises jumpstart their innovation practices. When I talk to innovation leaders like you, I often hear they struggle with how to overcome internal inertia, quickly find customers to engage with, or get support from senior leaders. Do these sound familiar to you?”

#5. Curate an Early Adopter List

Customer Development Hack #5 Curate an Early Adopters List

All this works best when you’re already focused on the customers who would be the most enthusiastic about giving feedback about new product ideas. For long-standing enterprises, it’s a no-brainer that you have a bunch of customers who have a strong relationship with your business. Is this documented anywhere?

For startups that don’t have such relationships, we tell them to find a customer advisory board comprised of people who have the problem the startup is trying to address. Existing companies should maintain a curated list of customers who are eager to learn about your new ideas. This is not so you can present typical roadmap decks. It’s getting them to ‘sign-up’ for being early adopters, sneak-peeks at new innovation, and yes, even being open to having periodic, quick, last-minute conversations about new ideas.

Even with online, digital experiments, this does not mean trampling your entire customer base. it means getting in front of the right number of customers based on how mature the product is. If the product is completely new, it probably only needs to be introduced to two to three early-adopter customers. If they send positive signals, it can then be expanded to a handful more.

Because people may be uncertain about applying Lean Startup principles to business-to-business products and customer development, the situation should be framed as human-to-human. Instead of viewing a business as a big monster that needs to be tamed over time, think as if you were selling business-to-consumer products, and consider the daily issues they face.

Be respectful of their time. Take “no” gracefully. At the same time, when scheduling customers to take part in an “experiment,” don’t inform them of all the details in advance. By leaving the description vague, customers will give a more genuine reaction. A human-to-human approach and some creativity will ensure that relationships will not be soured by the experiment.

Let us know your enterprise customer development hacks either through commenting below or sharing this post with your added hack!

Valuing The Customer: Innovation And Customer Satisfaction

Source: Valuing the Customer: Innovation and Customer Satisfaction

By Aaron Eden on August 18, 2014

Innovation and customer satisfaction are very closely intertwined. The more you can take customers through your value stream from aware to passionate Value Stream Discovery Loop , the more satisfied they’ll be, and the more likely they are to continue being your customer and referring others.

One of the best ways to engineer passion is through fostering customer loyalty

In last week’s Lean Lunch, we got a chance to talk with Brian Andrews, Founder of LoyaltyRocks.

Prior to launching LoyaltyRocks, Brian was a senior executive at Intuit for 11 years, most recently as the Vice President of Customer Experience and Business Excellence. Intuit was the first company to adopt the Net Promoter System (2003) and was featured in The Ultimate Question The Ultimate Question: Driving Good Profits and True Growth:Amazon:Books and The Ultimate Question 2.0 http://netpromotersystem.com/book/the-ultimate-question-2.aspx . Brian also led the customer experience community at Intuit for more than six years and represented Intuit on Bain’s NPS Loyalty Forum Bain & Company: Net Promoter System - Loyalty Forum Overview . After applying innovative thinking at Intuit, Brian founded LoyaltyRocks Link in 2014 after realizing the customer was the missing link in his consulting.

After being privileged to Brian’s insight and experience, Intuit’s Ben Blank joined as well as a team from Intuit Labs, Team EasyBiz, for a mini-coaching session with Brian and our host Aaron Eden.

Key Learning Points:

  • How to apply lean principles to customer satisfaction
  • How to inspire change in your peers
  • The keys to growth at any organization
  • Hyper-segmenting your customer base for targeted innovation
  • Recognizing the value in delighting your customer
  • The growth trap that most people in large organizations fall into
  • How to efficiently test solutions and be a lean entrepreneur

Interested in getting in touch with Brian? Drop him a tweet Brian Andrews (@loyaltyrocks) | Twitter !