2 Days, 40 People, and a Bus: TLC + LSM at SFAgile 2012
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2 Days, 40 People, and a Bus: TLC + LSM at SFAgile 2012

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Lean Startup Machine was conceived to help entrepreneurs validate or invalidate their product ideas in an intense, no-holds-barred bootcamp atmosphere. But Jabe and Simon thought it might serve a ...

Lean Startup Machine was conceived to help entrepreneurs validate or invalidate their product ideas in an intense, no-holds-barred bootcamp atmosphere. But Jabe and Simon thought it might serve a second purpose: to jump-start the staff at TLC into thinking about their work differently, bringing coworkers together, and perhaps spurring creativity in (and out of) the office. So earlier this year, Simon, Jabe and 40 TLC employees piled onto a bus chartered for Washington, DC. They had a handful of ideas they thought had some potential. But they had no idea what they were really getting into.

TLC + LSM was an immensely rewarding -- and, at times, extremely challenging -- experience for everyone who was involved. We believe that this two-day workshop significantly changed the way we do business. Last Friday, Simon gave a talk at SFAgile to discuss the uses of Lean Startup within a corporate culture.

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  • I want to cover a lot of ground today, but I’d love to answer questions, so please feel free to interrupt whenever you like. My talk today centers around an event my company held earlier this year. We generated a bunch of new product ideas, partnered with Lean Startup Machine, put our 40 person product team on a bus in the woods of West Virginia and drove down to DC to try to get people to talk to us. As I talk today I think you’ll get a fairly good sense of one approach to introducing Lean Startup inside an existing business I’d call it a little bit of a “shock-to-the-system” approach. I hope to also give you a sense of why we are doing this. Some organizations might look to Lean Startup purely as a way of testing new business lines, and we won’t complain if this process eventually leads us to a new billion dollar business, but I don’t love the odds on that. For us, Lean Startup is part of aneffort to become a learning organization.
  • Peter Senge defined a learning organization like this (gesture above) To us, that means helping people forgemeaningful relationships with their co-workers and customers, supporting the development of individual skills, creating a culture that productively surfaces challenges, ensuring employees care about the company's common vision, and constantly encouraging learning in every corner of the company.In a minute I’ll talk about the history and current state of TLC. As is the case with many successful firms, we’ve reached a cross-roads. Though we are stable today, our long-term health depends on us finding ways to transform our existing market or build new products for new marketsBy using rigorous experimentation, we believe we’ll be able to generate the knowledge that will translate into new products and services, as well as new approaches to customer relationships and operations. We think there is a great deal about Lean Startup that makes it useful in building a learning organization. At this point I feel like it is safe to assume that everyone here has at least a basic sense of what Lean Startup is, right? So, I’m not going to spend time covering that here.Lean startup offers an easily digestible and repeatable framework for experimentation, as we’ll see, I and others are consistantly seeing lean startup act as an effective gateway to deeper lean concepts. A final thought about what I am trying to do here today: Learning is a messy business. The greatest learning comes from situations that force us to face a high degree of uncertainty and make us confront things that might be embarrassing and cause us to leave our comfort zones. I’ve tried hard to resist the urge to paint a pretty picture here. This was a messy event, in which we flew largely by the seat of our pants, and the aftermath, though I think it is very promising, has been pretty messy too. To keep myself honest, I asked a lot of our staff to contribute to this talk, and in some cases you’ll hear directly from them.
  • I'll start by telling a little bit more of our story. The Library Corporation is a 40 year old firm that makes software for libraries. We make the systems that manage everything from selecting and purchasing materials through managing a library's patrons, and letting them find and check out books, DVDs and whatever else they lend.TLC's a privately held company with a long, pretty awesome history of innovation. The company was started by a Virginia couple in their basement in the early 1970s. They started as a data company, being among the first to productize digital bibliographic records for libraries. In the beginning they delivered these records on microfiche, then floppy disk. At some point they realized that not enough people had software to make use of these records so they built one of the first automated library management systems. When they realized that not enough people had computers to run that software, they started building PCs from scratch and giving them away for free with the software. They partnered with Toshiba to create the first ever commercial use for CD-ROMs and in the early going sent someone to Japan once a week to get the disks mastered. They eventually built the first ever Windows-based library management system and followed it up with the first Web-based system. In short, this was a firm that managed to stay agile and innovative for a very long time. By the mid-2000s, though, the company had reached a difficult, though by no means unique stage in their development. Having once been a market that rewarded innovation, the library industry is now RFP driven. If you want to play ball, you need to be able to check the boxes on the industry standard RFP. If you do anything beyond those boxes, no one really cares that much. Even if thismarket did reward innovation, most people had gotten too busy working to protect the substantial core business. Clay Christiensen’s Innovator’s Dilemma was in full effect. The company's product portfolio had grown unwieldy, staff had become increasingly silo'd around sustaining particular aspects of the business. Wasteful processes abounded. Most people barely had time to get their standard work done, let alone having time to be able to explore new ideas.
  • We got started by re-energizing our software and product development practices. We jumped head-first into a "by-the-book" Scrum implementation. We literally knocked down walls all over the building and insisted that people work in teams instead of individually. We gave people lots of books, we sent them to lots of training, we did a ton of coaching. In retrospect, I am not sure I'd recommend such a command and control approach, but we got lucky... We adopted lots of good practices like pairing, TDD, continuous integration and deployment. We started building working software, releasing frequently in small batches. We got the engines running again. We significantly reduced costs, andincreased sales and revenue.We started releasing software that people wanted, it looks pretty good, it’s built in collaboration with our customers, and it works well. Today, one of our biggest problems is actually that we release new features faster than our customers, many of which are government entities that have to jump through hoops to take upgrades, can handle. That’s a problem for sure, but it’s a good problem to have.
  • Over time, Scrum stopped being as useful for us and we made a transition to Kanban.We didn't just adopt Kanban in dev, we worked with Jim Benson to introduce personal kanban and team kanban throughout the organization. Our client services department, for example, operates in a giant 35 person kanban system. That team used Lean and Kanban to reduce their standard ticket workload by 75%, taking Average Time to First Touch from days to minutes and Average Time to Resolution from weeks to hours. Nothing happened overnight, but by early 2012 we could claim that things were running pretty well. If the company had once been at some risk of collapsing under the weight of its existing business, those concerns were now under control. We focus our energies on a core set of products. Our customers are mostly very happy – our NPS score (a way of measuring how likely your customers are to recommend you to their peers) hovers in a band above 90%, which I think is pretty extraordinary. In fact a very large percentage recently agreed to sign long-term contracts for the first time. I think it is reasonable to say that most of our staff is fairly happy. Though I am sure we have our pockets of dissatisfaction, we get a lot of signals that people like coming in to work. We have negligible attrition amongst both staff and customers. For the most part, people work fewer hours, make more money, have a great deal more choice about how they work, when they work, where they work from, who they work with and what they work on then they did when we started. In many ways, I think we have created a fairly unique environment. We have very few managers, and we try to think very carefully about what managers should and shouldn’t be doing. We try to foster self-organized teams that are given the opportunity to try whatever tools, approaches and theories they think make sense. I have tremendous trust in our staff, and I’d like to think they return that trust. Still, even as I stand here today, I can't tell you where real growth is going to come from for this company, and it was this problem that led me really start thinking about Lean Startup at some point in 2011.
  • Towards the end of that year, one of our POs, Matt Moran, who is now VP of Product at SocialFlow, asked me to send him to this event called Lean Startup Machine. In its standard flavor, LSM is a 3 day event, designed to help people with product ideas surface and test their assumptions. The LSM team make these nifty t-shirts that admonish you to Get Out of The Building and Invalidate Your Assumptions.Those are pretty good catch phrases, but they also actually capture what an LSM experience is all about. LSM is formatted as a competition in which the team that wins is the team that can prove that their idea is like crack to a as many people as possible in 2 days.Matt came back from his event and reported that these guys created an incredibly intense experience where people got boot-camped into the Lean Startup mindset.For a while I played with the idea of sending a bunch of people out to various LSM events to expose them to this stuff individually, but at some point I started to wonder if this could be more of an organizational transformation event. We’d spent a lot of time and energy getting to the edge of something that looks an awful lot like hyper-capability. I wanted to see if we could push ourselves over the edge.I got in touch with LSM founder Trevor Owens and peppered him with questions. Did they have any interest in doing a corporate event? Absolutely, they were just starting planning to roll these out. So you haven't done one yet? Nope. So, this is where most sensible people might have stepped back and asked themselves if they really wanted to risk tens of thousands of dollars, weeks of coordination and planning and days of their entire product team's lives on something that was both unproven and so deeply outside of their own wheelhouse. For whatever reason, this was not my reaction. Instead, we started planning. I spent a few weeks designing the event with Trevor and Ryan and our Ops coordinator, Judy Price.----- Meeting Notes (6/3/12 09:09) -----I'd come to realize that I wasn't going to just wake up one morning with the killer idea that would take TLC into a bright new future. The best thing I could do, I began to think, was create a model in which an entrpraneurial spirit could develop amonsgt as many people in the organization as possible. I thought LSM held some real promise as a step in that direction.
  • At some point we realized we would need to have a staging area in DC. Judy found us a great space in the Ronald Reagan building, centrally located near lots of different kinds of pedestrian traffic (office workers, tourists, students). At some point very late in the game we realized that we were going to need to feed people, so we came up with a system for thatThere were a ton of these little logistics to manage, and I raise this because I think if you try to do anything at all like this you will need to sweat the basic staging details like this because otherwise you could have a ton of unproductive distractions. Most importantly, about two weeks before the event,Jabe and I realized that we needed to show up with some ideas. What happens at a standard LSM is that about half of the people who show up are entrepreneur with ideas that they have been working on and are passionate about. Their job is to convince some portion of the other half to join them for a weekend to test their ideas. We spent some amount of time turning over our options. We wanted good ideas that people had some degree of attachment to. We had to be careful though, because the stakes were very different from a normal LSM. There, an entrepreneur shows up with their idea and if it gets shot down, they go home licking their wounds but there isn't the systemic impact of potentially creating a bunch of disgruntled intrapreneurs right out of the gate. So, we wanted to come up with a way to get at ideas that people could get passionate about, yet survive the death of. We needed to let the participants come up with their own ideas, and we needed to find a way to get them to eventually team up behind some subset of what they came up with.
  • Jabe created a three-day ideation process designed to generate a large number of ideas in a very short time, while also maximizing the likelihood that people would see things they liked in each others ideas, allowing us to eventually hone in on a subset of these that everyone would be excited to work on. I want to spend a little bit of time explaining the process that Jabe designed – but it really deserves its own talk, so I’m not going to do this justice here today, but I’ll do my best. Here’s a picture of Jabe, he’s here somewhere, so feel free to grab either of us if you want to learn more about this process.
  • I think the good people at 3M must wonder what all those orders in Inwood WV are about.
  • So here was the process in a nutshell:We placed one constraint on the ideation process: We were going to limit ourselves to iPhone and iPad apps. So, First, everyone was asked to name their favorite iphone or ipad app and asked to tell a story about why they loved it and used it so much. Then, each person broke their stories down into a set of elements that we captured in an approach that Jabe called “intrinsic component diagrams.” The components we were interested in included people, actions, environments and themes.Once everyone had their components, represented in stickies on the walls, they were asked to take their components and reorder them into affinity diagrams.
  • Finally, the took those archetypes and created new product stories designed to solve problems that those archetypes had. Breath….With the ideation process complete we now had more than 40 new product ideas in hand. We needed a way to winnow these down. Each team member created a brief written “product pitch” for their idea. We then shared these ideas with everyone in the company and held a round of anonymous online voting. In this stage, no one knew the name of the creator.
  • So, at 6 am on the first morning of LSM, 40 TLC employees piled into a big white bus at company headquarters. I’ll actuallynever forget cresting the hill that led up to the offices and seeing that bus sitting there. As a manager, you’re sort of expected to hide those moments when you realize you have no idea what you are doing. This was probably the single biggest such moment in my life. Here I was literally (and figuratively) taking our entire product team’s lives in my hands. Between me and Jabe, the LSM guys and our entire team, really, none of us knew what was going to happen next. It was a pretty extraordinary moment. I felt like I was probably going all in with every bit of good-will I might have gained with this group over the last 4 years. I was making a pretty high-stakes, highly visible gamble. If this went well, I figured it had a very good chance of leading to really fun and interesting things. If it went poorly… I didn’t really want to think about that. In a few words – I was terrified.
  • And then, we were in DC. Here’s Trevor doing his intro. So here’s one of the most interesting things about the LSM experience for me. In a corporate setting, I think both managers and staff expect events like this to be extremely well choreographed. People want clear, step by step directions. We want clear boundaries, we want consistent direction from organizers, we want to be told what tools to be used when. This, as it turns out, is not how LSM works – and though I didn’t know the degree to which this was going to be true going into the event, I think this turned out to be an extraordinarily powerful aspect of this event for us. Trevor and his team have managed to create a model that has just enough structure so that it is possible to be successful, but they have really managed to build a pretty good 2 day simulation of what it feels like to be a real entrepreneur struggling with endless uncertainty, conflicting guidance, and no roadmap to success. You don’t spend half a day learning about the rules of the game and the processes you need to follow. Trevor talks for a few minutes and the next thing you know….
  • It was time to walk-the-walk, time to Get Out of the Building. This, at the end of the day, is what LSM is all about. Go out into the world and talk to real people. Find someone, anyone, who has the problem you want to solve. Learn as much as you can from them about how they think about the problem, and what THEIR solution might look like. If you can find people with your problem, THEN it’s time to start thinking about what your solution might look like. So, we all poured out onto the streets and started looking for victims.
  • By the end of the day, some people were exhilarated, others were wiped out, a few seemed a little angry.On the ride home to WV that night some teams worked quietly, others talked about hockey, others slept or stared out the windows. At some point I took Trevor aside and asked him "this is what it's supposed to feel like right now, right?" He just smiled at me. 
  • Day 2 started early, back in West Virginia. Teams spent the morning seeking further validation, mostly via the web and the good old fashioned telephone. They narrowed their focuses or pivoted, they turned attention from validating problems to trying to validate their solutions. By late afternoon, everyone shifted to preparing their pitch presentations.
  • Around 6pm, pitching began. Each team had about 5 minutes to pitch and then they fielded questions. The winning ideas ended up being an app to help home gardeners visualize their plans and a piece of hardware, basically a hackableSonos box. Though we started with the iOS limitation, if you pivoted away from that platform based on what you found in the field, that was fine. Both teams managed to get people to pledge real dollars for their ideas.
  • We are big fans of Just In Time retrospectives at TLC. We try to force ourselves to notice when we are having a learning moment and do some digging into what we can get out of it. So, even though it was 9pm and we were all exhausted, everyone agreed to stick around to talk about what we had been through. What followed was one of the most extraordinary experiences I have ever been through in a corporate setting. People had a tremendous amount to say. We talked about the process, we talked about how various aspects of the event made people feel. We talked about the validity of street validation vs being able to more easily access members of your target market online. We talked about people’s feeling that some parts of the validation process made them feel like they weren’t entirely being honest with people, since some of the LSM team members had encouraged them to “role play” to get people to open up. It was an amazing way to wrap up the event. I left feeling incredibly proud and energized, I think most everyone else did as well.
  • So, what came next?First, everyone went back to work, but even in our core work, I think you can detect that a great deal has changed. I’m pretty sure you can see a new sense of camaraderie. People seem to be having more fun with their work. The language of Lean Startup has permeated everything we do. People are work hard to learn how to break their work into experiments , and they are vastly more likely to notice their own assumptions and call people on theirs. Something else happened. I noticed that some core lean concepts that we had been trying to foster for a long time started gaining a deeper level of traction, even amongst people who had been immersed in this stuff for some time. There was a clearly visible uptick in outreach to customers amongst managers, product owners and developers - people started literally and virtually Getting Out of the Building. Over the last few weeks I've had a couple of conversations with people about this thing I have notices where Lean Startup seems to act as a gateway drug to deeper lean concepts. I've found people quick to agree that they've seen evidence of this but not certain about why it works. The best theory I've heard so far came from Simon Bennet, who suggested to me that it might be because Lean Startup makes failure legit. It creates a practical space inside business for people to stop pretending like they know everything before they've experienced anything. In the words of my colleague Jabe Bloom, who will be speaking later today, it gives people license to fail well. All of this had the effect of raising the stakes even higher for me. As with everyone else, I needed to get back to work, but I also needed to figure out how to harness all of this new energy.
  • The answer that is taking shape is something that we are calling TLC Labs. What TLC Labs isn’t is skunk-works style team hidden off in a corner trying lots of cool things in secret while everyone else toils away in the core business. We don’t like that model. We want everyone to be able to contribute. So one piece of TLC labs has become an Innovation process, led by a group of volunteer mentors who went through the LSM experience, that let’s anyone in the company get involved in a sort of never ending LSM process that I’ll talk about in some detail in a minute. The second piece of TLC Labs is that we are launching a consultancy to teach people about Lean Management and Enterprise Lean Startup. We actually just got our first client, which we are excited about. Why are we doing this? First, we keep getting asked tons of questions about how we work, and we figured it would be best to create a formal channel to share this learning. Second, we learn from our experiences, so we see this as a great opportunity to cross-pollinate our experiences with others so that everyone can benefit.The way I am describing TLC Labs internally is sort of as a state of mind. Anytime you are doing something really interesting, using a new process, applying a new theory, that’s TLC Labs. We’ll give you tons of room to experiment, all we ask in exchange is that you figure out how to share your experiences and ideas. We are cultivating a couple of different channels for the content we are starting to generate. First, we’ll be launching a blog soon, packed with reports from the field of people actually trying to make all this stuff work. Second, we are encouraging all staff to get out to events and conferences and start sharing and learning. TLC Labs is a way of driving home to everyone in the company that we are serious about putting learning first.
  • Maybe best of all, we have two Lean startup projects running inside our core business now. The first one is a service to deliver digital bibliographic records to libraries when they place orders with ebook vendors. If you remember, I mentioned that part of our core business was providing these records for dead-tree books, but no one is doing it well for ebooks right now.. With the potential scope and scale of this product (the addressable market is about 20,00 libraries), we would have historically spent months preparing for a first release of a product like this. Instead we did some advertising at an industry conference looking for people who had the problem we wanted to solve. We got about 75 respondents immediately. From this group we selected about 10 to start with – all of whom met Steve Blank’s definition of an Earlyvangalist – they know they have the problem, they’ve pieced together a sub-par solution and they’ve already been paying for elements of the sub-par solution before we came along with a better product. We began processing records in a concierge model within a few days – meaning we didn’t build any software to start with, we modified records by hand to see if we could produce a solution that the customers liked. Having validated that we could produce positive results, we spent a few weeks building an absolutely minimal MVP – we started booking revenue in under a month. Despite the fact that there are a lot of features that we could be adding, right now we are having no problem adding customers – so we are testing the notion, which I think we got from Steve Blank, that you don’t build new features unless you can’t get any more customers with the product as is. Instead of adding features, in fact, we’re working to build partnerships with the other major ebook vendors who are all pretty excited about what we are doing.
  • Probably the most concrete component of TLCLabs is this endless LSM, which I’ll try to explain quickly. A team of volunteers who had been through the process is guiding this effort with support and coaching from Jabe and me. We hold a pitch meeting everyone two weeks, we’ve had four so far. They take place in our headquarters, with lots of us joining remotely via Google Hangout. Anyone in the company can come pitch any idea they want – any industry, any platform, any target market. People can sign up in advance to pitch or just show up and add their name to the list of there is a slot available. Each person gets 5 minutes to pitch and 5 minutes for questions. Next, there is a thumb-vote. If more than 50% of those present vote you up, you get 2 days to try to form a team, you then have one week to validate. If you can get valid enough information, and the innovation team and Jabe and I like your direction, you can “quit” your day job for two weeks, we’ll give you a dedicated development team, and you get to go build an MVP.
  • Here’s a kanban board showing where all of the current ideas are moving through the process.
  • Here’s the Innovation Team’s Kanban, which contains perhaps the best swim-lane I’ve ever seen. This has been a tremendous challenge for this group of people. As mentors, they are faking it ‘til they making it, being willing to learn on the fly, trying to stay basically one step ahead of the founders.Here is one of our staff, Cassie, talking about what’s been happening:
  • As far as validation goes, most of our teams are currently working through figuring out what their hypotheses are and how to test them. To this end, we are experimenting with following Steve Blank’s suggestion in the Startup Owners Manual by using Alexander Osterwalder’s Business Model Canvas.
  • We are also playing around with Ash Maurya’s Lean Canvas. What I like about Osterwalders canvas is its actually a good framework for giving people without much business management experience an overview of the concerns involved in shaping a business. What I like about Ash’s canvas is that it maps much more closely to the Customer Development / Lean Startup mold.
  • Once we have some assumptions surfaced, we are using LSM’s Validation Canvas to track our progress
  • Whatever else you think of the guy, Donald Rumsfeld did the world a great favor when he created the category of knowledge that he classified as “known unknowns.” I think our known unknowns fall into two categories:Things we don’t know (and maybe no one knows) about intrapraneurship:The real role of passion in developing new business ideas, and how passion comes into play with internal intrapreneurs, who don’t necessarily own their products in the same way that traditional entraprauners doHow do we strike the right balance between sustaining pressure and not overwhelming people. As you might have noticed, we are time boxing some parts of the process to try to keep things moving. Can management actually build this new model while keeping our eye on the core business?How to create a corp. of mentors at the same time as we are trying to create a corp. of foundersHow much can we/should we wrap this all in a process vs. just provide mentors? What it will do to morale if this doesn’t workWhat this will do to my paycheck if it doesn’t workThings we don’t know about startups that VCs probably do (or know people who do):All sorts of legal and financial stuffMarketing / PRConsumer pricingThe mechanics, players and economics of online advertisingHow to gather and analyze relevant data for effective validationHow to determine whether to continue investing vs pull the plug
  • Another thing that is happening is that we are grappling with a good deal of apparent cognitive dissonance between some of the Lean/Agile practices that we sought to infuse the organization with in terms of operating our core business and some of what Lean Startup has to offer. After years of teaching people that quality is more important than speed, we’ve entered a domain in which speed is actually often the critical factor. I find myself wonder how much of the “sleep-under-your-desk” startup mentality we want to foster now, after years of advocating sustainable paces. After teaching people that multi-tasking is bad, we’ve purposefully built a model that requires some people to be willing to manage two or more projects at once. I’ve seen some interesting things happen on this front. The innovation team started with 7 members. I always thought that was too large, but that doesn’t keep me from being nervous that 3 members have dropped off to focus on their current work. It helps that 2 of them are actually working on the data project I mentioned above, and the other one decided the wanted to focus on a project they are acting as founder on. The rational manager in me knows they have made the right decisions, but I also know I can’t control how this is perceived throughout the organization. In the end, I think that we are trending towards a pretty powerful mix. The Lean world, at least the part of it that I occupy, seems to be diving deeper into the world of theory – exploring the organizational learning and interpersonal communications concept of Chris Argyris and the complexity theory work of people like Dave Snowden. In a way, I think you could say that the Lean world is focusing more and more on the “why” of work. The Lean Startup world, not surprisingly really, is focused much more on the how. The mechanics. I think we are going to benefit significantly from deep exposure to both communities. I’m hoping these communities might also benefit from our work in the middle.
  • I am increasingly convinced that events like LSM and what has followed is what Lean Management is about. My job is to create the environment in which people can learn in ways that will make us, as a company, more agile, more flexible, more able to adapt. My job is also to create situations in which people can get to know each other and come to trust each other, and the company. Was LSM a success for us? What I can say without question is that I’d do it again in a heart-beat, and I think that almost everyone else who went through it would as well. I’ve never seen a single event have this much impact on an organization. This event turned out, for us, to be an almost perfect mix of real-world experience in a safe-to-fail environment. I recently heard Jason Yip from Thoughtworks talk about how important it is to let people experiment in situations where high-stakes don't force them to fall back on what they know or what they think they know. Jason was leading a discussion about his experiments with what the army calls their “Think Like a Commander” program, which asks non-officers to experience scenarios where they must handle a great deal of responsibility, risk and uncertainty. LSM worked perfectly for us in this regard, because people acted like they really owned their outcomes, even though they knew it was safe to fail.I really hope that Trevor and the LSM team don't succumb to the likely pressure from other companies to create more formality and structure in their process when they do embedded LSMs. For us, this event really opened us up to the reality expressed in what Eric is talking about in this quote. Knowledge work IS uncertainty. Understanding this is an important first step to finding effective ways to work within this reality.Is something like this for everyone? I don’t think so. First, I think you need senior executive buy in and possibly participation to make something like this work. Additionally, I think you need a good deal of organizational maturity and a pretty good degree of mutual trust throughout an organization to really reap major benefit from an event like this. Finally, executives also need to take seriously the kind of energy this is likely to unleash in an organization and be willing to spend considerable energy trying to make certain that this energy will be funneled in the right directions. Do I know for certain that our innovation process or TLC Labs is going to work? I don’t, but I do like our chances. I’ve been hugely re-energized, and I can see good things happening all around me that came out of this effort. At some level, LSM was a massive trust-fall exercise that has turned into an even bigger trust-fall exercise that now encompasses a good portion of our real work. This is scary to me, and I think it is probably scary to lots of people in the organization as well, but there is no doubt in my mind that we are doing what we need to be doing right now. So, that’s it. I’d love to answer any questions. If nothing comes to you know, feel free to grab me in the hallway, I’d love to talk!

2 Days, 40 People, and a Bus: TLC + LSM at SFAgile 2012 2 Days, 40 People, and a Bus: TLC + LSM at SFAgile 2012 Presentation Transcript

  • Simon Marcus@lycaonmarcus
  • Lean Startup was part of our effort to turn TLC into a learningorganization.Learning Organization: A group of people working together to collectively enhance their capacities to create results they really care about. - Peter SengeQualities of a learning organization:• Help people forge meaningful relationships with coworkers• Support the development of individual skills• Create a culture that productively surfaces challenges• Ensure employees care about a company’s common vision• Encourage learning in every corner of the company
  • About Our Company:TLC is a 40-year-old firm that makes software forlibraries.- Started in the 1970s, it was the first data company to productize digital bibliographic records for libraries.- Built first-ever Windows-based library management systemBut by the mid-2000s…- Market was RFP-driven, and it was difficult to find new space for innovation in the slow-to-change industry- The ‘Innovator’s Dilemma’ was in full effect
  • First Steps Towards Innovation:- Jumped head-first into a Scrum implementation- Adopted practices including pairing, TDD, continuous integration and deploying.- Released software frequently, in small batchesEventually, we...- Reduced costs, increased sales and revenue- Started releasing software built in collaboration with customersWhen Scrum stopped being as useful, we transitioned topersonal and team Kanban.
  • Using Lean and Kanban, teams reduced their standard workload by asmuch as 75%.By early 2012, our business was running very well.
  • With business stable, we decided to see if wecould push our employees to the next level.Our (hopeful) solution: Lean Startup Machine.Lean Startup Machine is an intensive lean/agilebootcamp designed for entrepreneurs. But wedecided to make our employees the first groupever to attend a LSM event as a corporate team.
  • The TLC offices are located in West Virginia – not exactly a bustling metropolis – so we opted to take a field trip to DC for our LSM experience. Main challenge pre-event: getting TLC employees to come up with ideas they would be passionate about. But, because we knew many ideas would change or be eliminated altogether during the LSM process, they had to be concepts they could survive the death of.© David Gaines/Flickr
  • We created a three-day ideation process:- Designed to generate a large number of ideas in a very short time- Wanted to maximize likelihood that people would see things they liked in each others ideas- Core of approach: people with different experiences would come up with different problems that needed solving.What followed was an approach that created ahailstorm of sticky notes that represented people,problems and environments.
  • What followed was an approach that created ahailstorm of sticky notes that represented people, problems and environments.
  • Three-Day LSM Ideation Process at TLC:- Limited to iPhone and iPad apps- Asked each employee about their current favorite app; what made them love the app so much?- Broke down elements of each app into elements – people, actions, environments, themes.- Components were then reordered using affinity diagrams, archetype extraction, and empathy maps.- Took our archetypes and created new products to solve the problems we imagined they had.
  • Using this pitch process, we came up with around 12 ideas;from these, we voted on the most promising and decided on 12 to take to the Lean Startup Machine event.
  • So, at 6:00 in the morning, 40 TLC employees piled on a bus headed to DC for their first experience with LSM. Along the way, they built landing pages, surveys, socialmedia handles and other tools to prepare them for the day.
  • Once we were there, Trevor Owens – who cofounded LSM – talked to ourteam for just a few minutes. The next thing we knew…
  • It was time to walk-the-walk and get out of the building(GOOB). This is what LSM is all about. Go out into the world, talk to real people, find out what they think of your idea.
  • At the end of the action-packed day, many peopleseemed exhausted – they were totally wiped out.
  • Day TwoTeams spent the morning looking for more validation –then narrowed their focus or pivoted as a result.By afternoon, everyone was preparing their pitchpresentations.During the pitch, each team would have five minutesto make the case for their idea.
  • In the end, the winning teams were an app that helpedgardeners visualize their plans and a piece of hardware – basically a hackable Sonos box.
  • At the end of Day Two, we held an intense meetingcalled the ‘Just In Time’ retrospective.We talked about…- Value of street validation vs. validation online- Emotions that came with ‘getting out of the building’- Parts of the validation process some people liked, and some didn’t like
  • So…What Happened Next?
  • We went back to work… but things were different.- Language of LSM now permeates our day-to-day- Lean concepts we’d been trying to integrate suddenly gained better traction- LSM seems to serve as a “gateway drug” to deeper, more advanced lean concepts - Why? Lean Startup “makes failure legit” – gives people license to make mistakes, and teaches them to fail well.
  • But by far the most tangible result of LSM is the formation of TLC Labs.What the Labs aren’t:- A skunk-works style lab, closed off to most of the employeesWhat the Labs are:- A way to teach about Lean Management and Enterprise Startup principles.- A place where employees can work collaboratively on experimental ideas- A sort of neverending Lean Startup experience
  • We have two Lean Startup projects running in our lab right now:The first, eBiblioFile, is a service that delivers digitalbibliographic records to libraries when they placeorders with ebook vendors.- Saw a place for entry in a wide-open market – instead of taking months to bring product to consumers, identified “Earlyvangelist” clients to create a solution within days- Started booking revenue in under a month- Following Steve Blanks’ principle of not adding more features until we can’t get any more customers as-is.
  • Here’s what eBiblioFilelooks like…
  • The second project is called Boundless. It helps libraries make better use of Social Media to build relationships with their communities.
  • But by far, the most concrete component of TLC labs is this“endless LSM.” That means…- Pitch meetings every two weeks, with everyone invited- Anyone can pitch any idea they want – regardless of industry, platform or market- Pitches are met with votes- If an idea is voted through, employees get a development team and can “quit” their day job for two weeks to form an MVP.
  • Here’s a kanban board showing where all of the current ideas are moving through the process.
  • We are using Alexander Osterwalder’s Business Model Canvas, Ash Maurya’s Lean Canvas, andLSM’s Validation Canvas to help us figure out our hypotheses and track our progress. See example of each on the next three slides…
  • Source: http://www.ashmaurya.com/2012/02/why-lean-canvas/
  • Project Name: Team Leader Name: Validation Canvas Track Pivots Start Pivot 1 Pivot 2 Pivot 3 Pivot 4 Customer Hypothesis Problem Hypothesis Solution Hypothesis Design & Analyze Experiments Track Pivots Invalidated Validated 1 2 1 2 Riskiest Assumption 3 4 3 4 Core Assumptions MVP Stage 5 6 5 6 Minimum Success Criterionwww.leanstartupmachine.com This work is licensed under the Cr eative Commons Attribution-Shar e Alike 3.0 Unported License. To view a copy of this license, visit http://cr eativecommons.org/licenses/by-sa/3.0/ or send a letter to Cr eative Commons, 171 Second Str eet, Suite 300, San Francisco, Califor nia, 94105, USA
  • There are known knowns; there arethings we know we know.We also know there are knownunknowns; that is to say we knowthere are some things we do not know.But there are also unknown unknowns –there are things we do not know wedont know.- Donald Rumsfeld
  • Agile + Lean + Lean Startup?After years of teaching people that quality is more importantthan speed, we are entering a domain where speed is the criticalfactor.- There is an inherent tension hereHowever, the Lean world is changing – trending towardsexploring the “why” of their work.Goal: To find the middle ground between the two workprocesses, and benefit from them both.
  • Was LSM a success for TLC?- Without a question, I would do it again in a heartbeat – and most people at TLC would likely answer the same.- LSM had a profound and immediate effect on the business at TLC- A “safe to fail” experience mixed with real- world risk- An experience that boosted morale, bringing members of the team together.
  • Startups operate under acondition of extreme uncertainty - Eric RiesDon’t we all - Simon Marcus
  • Anonymous Feedback: http://sayat.me/simonmarcusSimon Marcus@lycaonmarcus