Lean Innovation
Tendayi Viki
University of Kent
Website: www.tendayiviki.com Follow Me: @tendayiviki
Agile Practitioners
The Importance of
Innovation
Joseph Schumpeter (1883-1950)
Creative Destruction
The entrepreneur disturbs the economic equilibrium
and is the prime cau...
PWC’s Innovation Survey, 2013
http://www.pwc.com/gx/en/innovationsurvey/files/28222_GIS_Final_HiRes.pdf
PWC research shows that, over the last three
years, the leading innovative firms have
grown at a rate 16% higher than the ...
PWC’s Innovation Survey, 2013
http://www.pwc.com/gx/en/innovationsurvey/files/28222_GIS_Final_HiRes.pdf
What is Lean Innovation?
Frank Knight (1885-1972)
Risk, Uncertainty and Profit
 Uncertainty and the willingness to act in the face of
uncertainty ...
The Narrative
The Reality
Stephen J. Kline & Nathan Rosenberg (1986)
An Overview of Innovation
“Models that depict innovation as a smooth, well-
beh...
Stephen J. Kline & Nathan Rosenberg (1986)
An Overview of Innovation
“Thus, an important and useful way to consider the
pr...
The Challenge
Most new businesses and innovations fail:
 In some cases failure rates are over 70%.
 Most new product launches fail.
...
Previous success does not guarantee
future success (Frankish et al., 2012).
Entrepreneurs don’t really learn, they just c...
What we learn in
business school…
Business planning is
problematic:
• Because it describes as linear, a process
that is actually non-linear.
Business planning is
problematic:
• Because it places too much emphasis on
the value of the initial idea.
• It also gears ...
Do not place too much
emphasis on the value of
your initial business idea.
People are terrible at predicting what other
pe...
You probably think your
product idea is this cute…
But this is what it looks
like to your customers!
The difficult discipline
is in deciding:
• How much effort you want to put into execution and
optimization, before you are...
IMMITATION
The Greatest Form of Flattery
Startups fail because they imitate
large companies too early.
Startups are not smaller
versions of big companies!
(Steve Blank & Bob Dorf, 2012)
Rob Fitzpatrick and Salim Virani
http://www.foundercentric.com/
Startups also fail because
they imitate other startups.
The new cult of the celebrity founder.
No two startup situations
are the same…
(Even in the same market as another company)
Rob Fitzpatrick and Salim Virani
http://www.foundercentric.com/
Each startup situation has
its own topography….
And it’s your job to systematically figure out
the topology of your own st...
The Innovation Thesis
A Path for Searching:
For a sustainable and
profitable business model…
Innovating is Really Like a
Research Project:
We should not be making business plans, we
should view our initial business ...
The Innovation Team is a
Research Team:
All hands on deck, to learn what
customers want…
And a sustainable/profitable way ...
A Significant Contribution:
The significant contribution of a startup
is building something people want…
Upon achieving pr...
Eliminate Waste
Stephen J. Kline & Nathan Rosenberg (1986)
An Overview of Innovation
“The majority of inventions that have been recorded a...
Michael L. Tushman & William L. Moore (1982)
Readings in the Management of Innovation
Of the 1800 successful innovations t...
Stephen J. Kline & Nathan Rosenberg (1986)
An Overview of Innovation
“Both technical and market needs must be met for
succ...
The Scientific Method
Applied to Innovation and Entrepreneurship
Eric Ries (2011)
The Lean Startup
http://lean.st
Ash Maurya (2012)
Running Lean
http://www.runningleanhq.com/
Ash Maurya (2012)
Running Lean
http://www.spark59.com/
Alexander Osterwalder (2012)
http://www.businessmodelgeneration.com/
A Tool for Experimentation
The Minimum Viable Product
 The hypothesis/objective you are
trying to learn.
 from the target market
segment you are trying to learn
about.
 and ...
Source: @ryanmaccarriga
Lean Innovation Inside the Corporation
The Innovation Sandbox
Innovation must be managed
strategically, it cannot be done
successfully in a haphazard
fashion.
Nagji & Tuff (2012)
Harva...
The Innovation Ambition Matrix
Nagji & Tuff (2012)
Harvard Business Review
Nagji & Tuff (2012)
Harvard Business Review
Innovation Portfolio
Innovation Returns
Nagji & Tuff (2012)
Harvard Business Review
Innovation Portfolio
Nagji & Tuff (2012)
Harvard Business Review
Firms must develop the unique
capacities needed for transformational
innovation:
 Innovation teams should be separated fr...
Firms must develop the unique
capacities needed for transformational
innovation:
 Funding should come from outside the no...
Firms must develop the unique
capacities needed for transformational
innovation:
 Talent within innovation teams should i...
Firms must develop the unique
capacities needed for transformational
innovation:
 Pipeline management should focus on the...
Firms must develop the unique
capacities needed for transformational
innovation:
 Metrics should recognize nonfinancial
a...
Eric Ries (2011)
The Lean Startup
http://lean.st
THANK YOU
Lean Innovation @Pearson Publishing
Lean Innovation @Pearson Publishing
Lean Innovation @Pearson Publishing
Lean Innovation @Pearson Publishing
Lean Innovation @Pearson Publishing
Lean Innovation @Pearson Publishing
Lean Innovation @Pearson Publishing
Lean Innovation @Pearson Publishing
Lean Innovation @Pearson Publishing
Lean Innovation @Pearson Publishing
Lean Innovation @Pearson Publishing
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Lean Innovation @Pearson Publishing

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The talk on Lean Innovation delivered at Pearson Publishing, London UK.

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Lean Innovation @Pearson Publishing

  1. 1. Lean Innovation Tendayi Viki University of Kent Website: www.tendayiviki.com Follow Me: @tendayiviki Agile Practitioners
  2. 2. The Importance of Innovation
  3. 3. Joseph Schumpeter (1883-1950) Creative Destruction The entrepreneur disturbs the economic equilibrium and is the prime cause of economic development. • V1: Innovation comes from entrepreneurs (Schumpeter, 1934). • V2: Innovation can also come from entrepreneurs within large organizations (Schumpeter, 1949).
  4. 4. PWC’s Innovation Survey, 2013 http://www.pwc.com/gx/en/innovationsurvey/files/28222_GIS_Final_HiRes.pdf
  5. 5. PWC research shows that, over the last three years, the leading innovative firms have grown at a rate 16% higher than the least innovative. PWC’s Innovation Survey, 2013 http://www.pwc.com/gx/en/innovationsurvey/files/28222_GIS_Final_HiRes.pdf
  6. 6. PWC’s Innovation Survey, 2013 http://www.pwc.com/gx/en/innovationsurvey/files/28222_GIS_Final_HiRes.pdf
  7. 7. What is Lean Innovation?
  8. 8. Frank Knight (1885-1972) Risk, Uncertainty and Profit  Uncertainty and the willingness to act in the face of uncertainty are the hallmarks of entrepreneurship.  Whereas risk is somewhat estimable, uncertainty is not estimable and cannot be insured against.
  9. 9. The Narrative
  10. 10. The Reality
  11. 11. Stephen J. Kline & Nathan Rosenberg (1986) An Overview of Innovation “Models that depict innovation as a smooth, well- behaved linear process badly misspecify the nature and direction of the casual factors at work….. Innovation is complex, uncertain, somewhat disorderly, and subject to changes of many sorts…”
  12. 12. Stephen J. Kline & Nathan Rosenberg (1986) An Overview of Innovation “Thus, an important and useful way to consider the process of innovation is as an exercise in the management and reduction of uncertainty” (pg. 275).
  13. 13. The Challenge
  14. 14. Most new businesses and innovations fail:  In some cases failure rates are over 70%.  Most new product launches fail.  Being part of a large company does not guarantee success.  Having a lot of investment money does not guarantee success either.
  15. 15. Previous success does not guarantee future success (Frankish et al., 2012). Entrepreneurs don’t really learn, they just claim they do! http://ow.ly/eR6Uh
  16. 16. What we learn in business school…
  17. 17. Business planning is problematic: • Because it describes as linear, a process that is actually non-linear.
  18. 18. Business planning is problematic: • Because it places too much emphasis on the value of the initial idea. • It also gears up the organization for execution and operational effectiveness.
  19. 19. Do not place too much emphasis on the value of your initial business idea. People are terrible at predicting what other people will pay money for!
  20. 20. You probably think your product idea is this cute…
  21. 21. But this is what it looks like to your customers!
  22. 22. The difficult discipline is in deciding: • How much effort you want to put into execution and optimization, before you are certain that you are on the right path…
  23. 23. IMMITATION The Greatest Form of Flattery
  24. 24. Startups fail because they imitate large companies too early.
  25. 25. Startups are not smaller versions of big companies! (Steve Blank & Bob Dorf, 2012)
  26. 26. Rob Fitzpatrick and Salim Virani http://www.foundercentric.com/
  27. 27. Startups also fail because they imitate other startups. The new cult of the celebrity founder.
  28. 28. No two startup situations are the same… (Even in the same market as another company)
  29. 29. Rob Fitzpatrick and Salim Virani http://www.foundercentric.com/
  30. 30. Each startup situation has its own topography…. And it’s your job to systematically figure out the topology of your own startup
  31. 31. The Innovation Thesis
  32. 32. A Path for Searching: For a sustainable and profitable business model…
  33. 33. Innovating is Really Like a Research Project: We should not be making business plans, we should view our initial business model as a research proposal.
  34. 34. The Innovation Team is a Research Team: All hands on deck, to learn what customers want… And a sustainable/profitable way to deliver that value to them….
  35. 35. A Significant Contribution: The significant contribution of a startup is building something people want… Upon achieving product-market fit, a startup graduates…
  36. 36. Eliminate Waste
  37. 37. Stephen J. Kline & Nathan Rosenberg (1986) An Overview of Innovation “The majority of inventions that have been recorded at the US Patent Office have never been introduced on a commercial basis” (pg. 276).
  38. 38. Michael L. Tushman & William L. Moore (1982) Readings in the Management of Innovation Of the 1800 successful innovations tabulated by Donald G. Marquis in 1976, almost three quarters were the result of perceived market need, and only one quarter from perceived technical opportunity.
  39. 39. Stephen J. Kline & Nathan Rosenberg (1986) An Overview of Innovation “Both technical and market needs must be met for successful innovation” (pg. 276) Successful Innovation: The Technological + The Commercial In Other Words: Product – Market Fit
  40. 40. The Scientific Method Applied to Innovation and Entrepreneurship
  41. 41. Eric Ries (2011) The Lean Startup http://lean.st
  42. 42. Ash Maurya (2012) Running Lean http://www.runningleanhq.com/
  43. 43. Ash Maurya (2012) Running Lean http://www.spark59.com/
  44. 44. Alexander Osterwalder (2012) http://www.businessmodelgeneration.com/
  45. 45. A Tool for Experimentation The Minimum Viable Product
  46. 46.  The hypothesis/objective you are trying to learn.  from the target market segment you are trying to learn about.  and the minimum form that it takes to achieve that learning. Patrick Vlaskovitz (2012) http://vlaskovits.com/2012/09/apple-maps-debacle-and-minimum-viable- The Minimum Viable Product
  47. 47. Source: @ryanmaccarriga
  48. 48. Lean Innovation Inside the Corporation The Innovation Sandbox
  49. 49. Innovation must be managed strategically, it cannot be done successfully in a haphazard fashion. Nagji & Tuff (2012) Harvard Business Review Key Principle
  50. 50. The Innovation Ambition Matrix Nagji & Tuff (2012) Harvard Business Review
  51. 51. Nagji & Tuff (2012) Harvard Business Review Innovation Portfolio
  52. 52. Innovation Returns Nagji & Tuff (2012) Harvard Business Review
  53. 53. Innovation Portfolio Nagji & Tuff (2012) Harvard Business Review
  54. 54. Firms must develop the unique capacities needed for transformational innovation:  Innovation teams should be separated from day-to-day operations (Innovation Sandbox). / Inside the Innovation Sandbox Nagji & Tuff (2012) Harvard Business Review
  55. 55. Firms must develop the unique capacities needed for transformational innovation:  Funding should come from outside the normal budget cycle (Stable and Predictable Funding). / Inside the Innovation Sandbox Nagji & Tuff (2012) Harvard Business Review
  56. 56. Firms must develop the unique capacities needed for transformational innovation:  Talent within innovation teams should include a diverse set of skills (Cross-Functional Teams). ◦ Creatives, Designers, Anthropologists, Scenario Planners and Analysts; that are able to deal with ambiguous data. / Inside the Innovation Sandbox Nagji & Tuff (2012) Harvard Business Review
  57. 57. Firms must develop the unique capacities needed for transformational innovation:  Pipeline management should focus on the iterative development of a few promising ideas, not the ruthless filtering of many (Build- Measure-Learn).  It is impossible to predict fifth-year sales for something the world has never seen. Inside the Innovation Sandbox Nagji & Tuff (2012) Harvard Business Review
  58. 58. Firms must develop the unique capacities needed for transformational innovation:  Metrics should recognize nonfinancial achievements in early phases (Innovation Accounting).  What if the only hurdle to clear to receive investment is that the company might learn something. Inside the Innovation Sandbox Nagji & Tuff (2012) Harvard Business Review
  59. 59. Eric Ries (2011) The Lean Startup http://lean.st
  60. 60. THANK YOU

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