Lean Principles for Nonprofits: Because Your Annual Plan is a Fraud

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Starting, building and operating a nonprofit organization is done under conditions of extreme uncertainty, but we plan with confidence. Enormous energy is put into Five Year Strategic Plans, Annual Plans and Quarterly plans, but then real life intrudes and the reality is that there's only the vaguest resemblance between our plans and our actual work. So much wasted time! There's got to be a better way.

Kayvon Khalilzadeh of Lean Startup Vancouver will introduce us to the concept of the lean startup

Lean Startup is a methodology that favours experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional “big design up front” development. Although the methodology is just a few years old, its concepts—such as “minimum viable product” and “pivoting” have quickly taken root in the start-up world. Now it's time for the nonprofit sector to adopt this innovative approach.

Slides from @kayvonk

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Lean Principles for Nonprofits: Because Your Annual Plan is a Fraud

  1. 1. LEAN PRINCIPLES FOR NONPROFITS BECAUSE YOUR ANNUAL PLAN IS A FRAUD
  2. 2. INTRO • Kayvon K • • Facebook.com/kayvank7 • Email: k@kahzoom.com • • Twitter: @kayvonk To book an appointment: Go to :kahzoom.com/now and click on the orange BOOKNOW button Please also use #leanxvan
  3. 3. WHAT IS LEAN STARTUP?
  4. 4. CORE IDEAS MINIMIZE WASTE Lean startup philosophy seeks to eliminate wasteful practices and increase value producing practices during the product development phase so that startups can have a better chance of success without requiring large amounts of outside funding, elaborate business plans, or the perfect product.
  5. 5. CORE IDEAS BUILD SOMETHING THEY ACTUALLY WANT Customer feedback during product development is integral to the lean startup process, and ensures that the producer does not invest time designing features or services that consumers do not want.
  6. 6. CORE IDEAS Lean startup philosophy counter-balance the infinite capacity of human to self-delusion
  7. 7. CORE IDEAS WHAT IS A STARTUP? A human institution designed to deliver a new product or service under conditions of extreme uncertainty.
  8. 8. CORE IDEAS If innovation is all about operating within conditions of extreme uncertainty, and if we are first and foremost in search of answers and only THEN building our products, then we have to get a lot better at getting answers quickly (and yes, social change work nearly always operates under conditions of “extreme uncertainty.”) Innovation succeeds at specific point of equilibrium changes – when things are about to change, not after they've changed
  9. 9. CORE IDEAS To do this, we have to get better at what is called “validated learning” – getting clear data around our core assumptions – by iterating through a BUILD – MEASURE – LEARN cycle
  10. 10. WHY LEAN IS IMPORTANT? WHAT IS THE POINT? Unfair Advantage An organization practicing lean principles has an unfair advantage against a completely equivalent organization that doesn’t.
  11. 11. ACHIEVING FAILURE Majority of organization are very good at Achieving Failure Definition: successfully executing a bad plan If we're building something nobody wants, what does it matter if we accomplish it
  12. 12. ACHIEVING FAILURE The method of accountability in traditional management is about projecting into the future and measuring success by how they do compared to the forecast. "Lean" comes from manufacturing. Manufacturing doesn't do not waterfall anymore. The customer is the most important part of the production line. But we have to know who is the customer?
  13. 13. WHAT IS THE MAIN GOAL OF A START-UP? • It can also be applied to a project, new feature, a product development process.
  14. 14. WHAT IS THE MAIN GOAL OF A START-UP? TO FIND OUT WHAT WORKS
  15. 15. WHAT IS THE MAIN GOAL OF A START-UP?
  16. 16. THE LEAN STARUTUP CYCLE
  17. 17. THE LEAN STARUTUP CYCLE The main determinant of whether / how quickly we innovate is how quickly we can go through the BUILD – MEASURE – LEARN cycle
  18. 18. THE LEAN STARUTUP CYCLE The faster we go, the more quickly we learn, the more often we pivot, the less time we waste
  19. 19. THE LEAN STARUTUP CYCLE We optimize for learning and build organizations that are made to adapt quickly
  20. 20. THE LEAN STARUTUP CYCLE Lean startup its about teaching startups to speed up their learning. (This makes sense, but it’s not how we (any of us) act most of the time)
  21. 21. THE LEAN STARUTUP CYCLE Startup = Experiment
  22. 22. BUILDING A STARTUP What does it take to go from an idea to implementation?
  23. 23. BUILDING A STARTUP Waterfall (Product) Development
  24. 24. BUILDING A STARTUP It used to be: A. We will write a (business) plan? B. Then we would know everything there is to know 1. Operating plan 2. Financial Model C.And we simply execute that plan
  25. 25. BUILDING A STARTUP Reality: No plan survives the first contact with clients
  26. 26. BUILDING A STARTUP Reason: Startups are not a smaller version of lagers companies • Startups search • Companies execute Search for what? Execute what?
  27. 27. BUILDING A STARTUP We still need a plan Planning that comes before The (business) Plan
  28. 28. BUILDING A STARTUP So a "Search Plan" first Then an "Operating Business Plan" to execute
  29. 29. BUILDING A STARTUP Tool: The Business Model Canvas •To organize your thinking •To get out of the building • To test the hypothesis • And update our canvas
  30. 30. BUILDING A STARTUP
  31. 31. BUILDING A STARTUP
  32. 32. BUILDING A STARTUP
  33. 33. BUILDING A STARTUP What problem are we solving? What are we building? And for whom? Who is the customer?
  34. 34. BUILDING A STARTUP
  35. 35. BUILDING A STARTUP Who are they? Why would they buy? Persona? Multiple Customer Segments
  36. 36. BUILDING A STARTUP
  37. 37. BUILDING A STARTUP How do we distribute our product? How our products from out company gets to our customers?
  38. 38. BUILDING A STARTUP
  39. 39. BUILDING A STARTUP How do I get customers? How do I keep them? How do I grow them?
  40. 40. BUILDING A STARTUP
  41. 41. BUILDING A STARTUP What value is customer paying for? What is the strategy to capture that value
  42. 42. BUILDING A STARTUP
  43. 43. BUILDING A STARTUP What are the most important assets we need to make business model work? Finance, Physical, Intellectual, Human
  44. 44. BUILDING A STARTUP
  45. 45. BUILDING A STARTUP
  46. 46. BUILDING A STARTUP
  47. 47. BUILDING A STARTUP
  48. 48. BUILDING A STARTUP
  49. 49. BUILDING A STARTUP What are the COSTS to operate the business model?
  50. 50. BUILDING A STARTUP Tool: The Business Model Canvas •To organize your thinking •To get out of the building • To test the hypothesis • And update our canvas
  51. 51. BUILDING A STARTUP Tool: Lean Canvas •To organize your thinking •To get out of the building • To test the hypothesis • And update our canvas
  52. 52. THE LEAN STARUTUP CYCLE
  53. 53. BUILDING A STARTUP
  54. 54. BUILDING A STARTUP Do people have this problem?
  55. 55. BUILDING A STARTUP Is there a match between problem and solution?
  56. 56. BUILDING A STARTUP Repeat * Until proven
  57. 57. BUILDING A STARTUP
  58. 58. BUILDING A STARTUP Creating end-user and demand
  59. 59. BUILDING A STARTUP The scalable organization to do it all
  60. 60. BUILDING A STARTUP Tool: Validation Board •To get out of the building •To iterate
  61. 61. BUILDING A STARTUP
  62. 62. BUILDING A STARTUP Get out of the building: 1. Design experiments 2. Run tests 3. Get data 4. Repeat
  63. 63. BUILDING A STARTUP It is about a search for a business model that works
  64. 64. RESOURCES
  65. 65. • Kayvon K • • Facebook.com/kayvank7 • Email: k@kahzoom.com • • Twitter: @kayvonk To book an appointment: Go to :kahzoom.com/now and click on the orange BOOKNOW button Please also use #leanxvan

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