Starting Lean - Running an Agile Enterprise

Russ Lewis
Russ LewisAgile coach & engagement lead (DevOps program) at a worldwide Investment Bank
Agile Process Improvement
Starting Lean
Based on Ash Maurya’s book Running Lean
Presented by
Russ “The Agiliser” Lewis
russ.lewis@storm-consulting.com
www.storm-consulting.com
© Storm Consulting 2014. All rights reserved. Not to be reproduced without prior written consent.
1
Agile Process Improvement
www.storm-consulting.com
© Storm Consulting 2014. All rights reserved. Not to be reproduced without prior written consent.
2
Agile Process Improvement
Agenda
Lean canvas
Prioritisation
Validation
Summary
Appendices
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
3
Agile Process Improvement
Summary of Running Lean
• Document your “plan A” using Lean Canvas
• Identify the riskiest parts of the plan
• Systematically test your plan
• Iterate
– Build, measure, learn
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
4
“Running Lean is a systematic process for iterating from plan A
to a plan that works.”
Ash Maurya, Running Lean
Agile Process Improvement
Lean Canvas
• Lean technique for mapping a business plan
– Fast, cheap, and without waste
– But customer is not involved
• Ideal for
– Defining a product / service for development
– Creating the business model for start-up
– Reviewing and refining a growth opportunity
• Output is a validated business roadmap
– “Investable” at stage 1 - family, friends and fools
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
5
Agile Process Improvement
Lean Canvas Template
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© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
6
Problem
Competition
Solution
Metrics
Unique Value
Proposition
High level
concept
Unfair
Advantage
Channels to
Market
Customer
Segments
Early adopters
Costs (fixed / direct) Revenue Streams
1
4
8
9
5
3 2
67
Agile Process Improvement
Model each Segment / Product
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© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
7
Agile Process Improvement
Agenda
Lean canvas template
Prioritisation
Validation
Summary
Appendices
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
8
Agile Process Improvement
Prioritisation of Models
• Select ONE business model to focus-on
– Assess your customer’s pain
• Value “must-have” problems
– Favour channels that are easier to access
– Consider the margins & market size
– Feasibility
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
9
Agile Process Improvement
3 Sets of Risks
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© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
10
Problem
Competition
Solution
Metrics
Unique Value
Proposition
High level
concept
Unfair
Advantage
Channels to
Market
Customer
Segments
Early adopters
Costs (fixed / direct) Revenue Streams
1 2
4 3
3 1
24
21
3
4
Agile Process Improvement
“Right Product” Risk
1. Problem worth solving?
2. Define Minimal Viable
Product (MVP)
3. Build MVP to validate &
demonstrate UVP
4. Verify at large scale
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
11
Problem
Competition
Solution
Metrics
Unique Value
Proposition
1 2
4
3
 Solution fits the Problem
Agile Process Improvement
“Path to Customer” Risk
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
12
Unfair
Advantage
Channels to
Market
Customer
Segments
Early adopters
3
1
2
4
1. Identify who is feeling the pain
2. Who really wants an answer now?
3. Define the early channels
4. Identify scalable inbound channels
 Product fits the Market
Agile Process Improvement
“Is it a Viable Business” Risk
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
13
Problem
Competition
Costs (fixed / direct) Revenue Streams
24
1
3
1. Competition / alternatives / price
2. Test pricing through verbal commitment
3. Test pricing through sign-ups
4. Optimise cost structure
- to make the business work
 Scalable (investable) business
Agile Process Improvement
Agenda
Lean canvas template
Prioritisation
Validation
Summary
Appendices
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
14
Agile Process Improvement
Investing in the Next Level
• Move from “good idea” to “good idea for a business”
– Requires entrepreneurship
• Running an Agile business
– Customer involvement essential
– Iteration inevitable
• Output is a validated business
– “Investable” at stage 2 by real investors
• Although you will likely turn them away
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
15
Agile Process Improvement
A Systematic Approach
1. Understand the problem via face to face (problem) interviews
– Problem worth solving?
– Who has this problem?
– How is it solved today?
2. Define the solution - conduct solution interviews
– Customer demo of mock-up or visualisation
– Will the solution work?
– Who are the early adopters?
– Does the pricing model work?
3. Concurrently build MVP, marketing site and define sales funnel
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
16
Agile Process Improvement
A Systematic Approach Contd
4. Validate qualitatively – MVP interview
– Build MVP and soft-launch to early adopters
– Do they recognise the UVP?
– Will they provide testimonials
– Are there enough pull / early adopters to support conversion learning?
– Define and monitor conversion funnel
5. Verify quantitatively
– Launch (MVP) to larger audience
– Tweak model to improve prospect acquisition
– Plan how the business will scale
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
17
Agile Process Improvement
Interview Guidelines
• Build a frame around learning, not pitching
– Mostly listening, bring someone to make notes
– Probe for evidence, not anecdotes
– Testable hypotheses
• Wide selection of interviewees initially
– Start with people you know, ask for introductions from them
– 30-60 interviewees
– Script email requests for interviews
– Outsource interview scheduling
• Follow a script
• 20-30 mins
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© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
18
Agile Process Improvement
Interview Validations
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© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
19
Problem
Current
solutions
Solution
Metrics
Unique Value
Proposition
High level
concept
Unfair
Advantage
Channels to
Market
Customer
Segments
Early adopters
Costs (fixed / direct) Revenue Streams
PI
PI
SIPI
SI
SI
Agile Process Improvement
Problem Interview Exit Criteria
• Can identify demographics of an early adopter
• Have a must-have problem
• Can describe how customers solve the problem today
• Have interviewed at least 10 people
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
20
Agile Process Improvement
Solution Interview Structure
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© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
21
Agile Process Improvement
Solution Interview Exit Criteria
• Can identify demographics of an early adopter
• Have a must-have problem
• Can define minimum features needed to solve this problem
• Have a price the customer is willing to pay
• Can build a business around it
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
22
Agile Process Improvement
Problem Interview Structure
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
23
Agile Process Improvement
Distil UVP
• Learning to date refines the Unique Value Propositions
– Informs the Unfair Advantage too
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© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
24
Problem
Current
solutions
Solution
Metrics
Unique Value
Proposition
High level
concept
Unfair
Advantage
Channels to
Market
Customer
Segments
Early adopters
PI
PI
SIPI
SI
Agile Process Improvement
Define, Develop & Deliver MVP
• Define Minimum Viable Product
– Must-have features only
– Everything else goes on the backlog
– Resist new features
• Features must be “pulled”
– By customers
• Focus on delivering the minimum
– Faster delivery = rapid learning
– This is a learning stage
– Use continuous deployment
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© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
25
Problem
Current
solutions
Solution
PI
PI
SI
Agile Process Improvement
Sales Funnel - “Pirate Metrics”
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26
Acquisition
Activation
Retention
Revenue
Referral
Users find you
Great first experience
Users return for more
Getting paid
Users tell other users
Pirate Metrics are Dave McClure’s term – they spell AARRR
Agile Process Improvement
Acquisition Sub-funnel
• Acquisition involves
marketing website
• Customer path
– From 1st landing to
interested prospect
• 1 Page per step
– Primary call to
action = next step
– Secondary call =
more information
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© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
27
Agile Process Improvement
Activation Sub-funnel
• Activation is
customer’s first activity
• Architect the flow for
learning
– Iterate to get it right
– Optimise it later
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© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
28
Agile Process Improvement
Track Metrics
• Track acquisition, activation and revenue
• “Cohorts” track specific activities
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© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
29
Agile Process Improvement
MVP Interview
• Last of the three start-up validation interviews
– Final learning stage before scale-up
– Validation of a good business idea
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
30
Agile Process Improvement
MVP Interview Validations
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
31
Problem
Current
solutions
Solution
Metrics
Unique Value
Proposition
High level
concept
Unfair
Advantage
Channels to
Market
Customer
Segments
Early adopters
Costs (fixed / direct) Revenue Streams
MVP
I
MVP
I
MVP
I
Agile Process Improvement
MVP Interview Structure
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
32
Agile Process Improvement
MVP Interview Exit Criteria
• MVP demonstrates and delivers UVP
• Price is right
• Validate UVP on marketing website
• Customers make it through to activation
• Channels will drive sufficient acquisitions
• MVP will drive sufficient conversions to revenue
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
33
Agile Process Improvement
Agenda
Lean canvas template
Prioritisation
Validation
Summary
Appendices
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
34
Agile Process Improvement
Summary
• Running an Agile Business is a learning process
– Plan A is a starting point
– It’s OK to be wrong, as long as you learn from it
– Always update your canvas
• Customer engagement is crucial
– Validate assumptions
– Improve messages
– Prove the market
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
35
Agile Process Improvement
Calls to Action
• Buy the book – it’s an inspiration
– Includes introduction email, and full interview scripts
– Ash gets the royalties for his work and the graphics I have shown
• Tell me the problems you are facing right now
– I’m a registered and approved GrowthAccelerator coach
• Sign-up for the Storm Consulting blog
– Loaded with Agile goodness for firms of all sizes and experience
www.storm-consulting.com
© Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent.
36
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Starting Lean - Running an Agile Enterprise

  • 1. Agile Process Improvement Starting Lean Based on Ash Maurya’s book Running Lean Presented by Russ “The Agiliser” Lewis russ.lewis@storm-consulting.com www.storm-consulting.com © Storm Consulting 2014. All rights reserved. Not to be reproduced without prior written consent. 1
  • 2. Agile Process Improvement www.storm-consulting.com © Storm Consulting 2014. All rights reserved. Not to be reproduced without prior written consent. 2
  • 3. Agile Process Improvement Agenda Lean canvas Prioritisation Validation Summary Appendices www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 3
  • 4. Agile Process Improvement Summary of Running Lean • Document your “plan A” using Lean Canvas • Identify the riskiest parts of the plan • Systematically test your plan • Iterate – Build, measure, learn www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 4 “Running Lean is a systematic process for iterating from plan A to a plan that works.” Ash Maurya, Running Lean
  • 5. Agile Process Improvement Lean Canvas • Lean technique for mapping a business plan – Fast, cheap, and without waste – But customer is not involved • Ideal for – Defining a product / service for development – Creating the business model for start-up – Reviewing and refining a growth opportunity • Output is a validated business roadmap – “Investable” at stage 1 - family, friends and fools www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 5
  • 6. Agile Process Improvement Lean Canvas Template www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 6 Problem Competition Solution Metrics Unique Value Proposition High level concept Unfair Advantage Channels to Market Customer Segments Early adopters Costs (fixed / direct) Revenue Streams 1 4 8 9 5 3 2 67
  • 7. Agile Process Improvement Model each Segment / Product www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 7
  • 8. Agile Process Improvement Agenda Lean canvas template Prioritisation Validation Summary Appendices www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 8
  • 9. Agile Process Improvement Prioritisation of Models • Select ONE business model to focus-on – Assess your customer’s pain • Value “must-have” problems – Favour channels that are easier to access – Consider the margins & market size – Feasibility www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 9
  • 10. Agile Process Improvement 3 Sets of Risks www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 10 Problem Competition Solution Metrics Unique Value Proposition High level concept Unfair Advantage Channels to Market Customer Segments Early adopters Costs (fixed / direct) Revenue Streams 1 2 4 3 3 1 24 21 3 4
  • 11. Agile Process Improvement “Right Product” Risk 1. Problem worth solving? 2. Define Minimal Viable Product (MVP) 3. Build MVP to validate & demonstrate UVP 4. Verify at large scale www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 11 Problem Competition Solution Metrics Unique Value Proposition 1 2 4 3  Solution fits the Problem
  • 12. Agile Process Improvement “Path to Customer” Risk www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 12 Unfair Advantage Channels to Market Customer Segments Early adopters 3 1 2 4 1. Identify who is feeling the pain 2. Who really wants an answer now? 3. Define the early channels 4. Identify scalable inbound channels  Product fits the Market
  • 13. Agile Process Improvement “Is it a Viable Business” Risk www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 13 Problem Competition Costs (fixed / direct) Revenue Streams 24 1 3 1. Competition / alternatives / price 2. Test pricing through verbal commitment 3. Test pricing through sign-ups 4. Optimise cost structure - to make the business work  Scalable (investable) business
  • 14. Agile Process Improvement Agenda Lean canvas template Prioritisation Validation Summary Appendices www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 14
  • 15. Agile Process Improvement Investing in the Next Level • Move from “good idea” to “good idea for a business” – Requires entrepreneurship • Running an Agile business – Customer involvement essential – Iteration inevitable • Output is a validated business – “Investable” at stage 2 by real investors • Although you will likely turn them away www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 15
  • 16. Agile Process Improvement A Systematic Approach 1. Understand the problem via face to face (problem) interviews – Problem worth solving? – Who has this problem? – How is it solved today? 2. Define the solution - conduct solution interviews – Customer demo of mock-up or visualisation – Will the solution work? – Who are the early adopters? – Does the pricing model work? 3. Concurrently build MVP, marketing site and define sales funnel www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 16
  • 17. Agile Process Improvement A Systematic Approach Contd 4. Validate qualitatively – MVP interview – Build MVP and soft-launch to early adopters – Do they recognise the UVP? – Will they provide testimonials – Are there enough pull / early adopters to support conversion learning? – Define and monitor conversion funnel 5. Verify quantitatively – Launch (MVP) to larger audience – Tweak model to improve prospect acquisition – Plan how the business will scale www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 17
  • 18. Agile Process Improvement Interview Guidelines • Build a frame around learning, not pitching – Mostly listening, bring someone to make notes – Probe for evidence, not anecdotes – Testable hypotheses • Wide selection of interviewees initially – Start with people you know, ask for introductions from them – 30-60 interviewees – Script email requests for interviews – Outsource interview scheduling • Follow a script • 20-30 mins www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 18
  • 19. Agile Process Improvement Interview Validations www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 19 Problem Current solutions Solution Metrics Unique Value Proposition High level concept Unfair Advantage Channels to Market Customer Segments Early adopters Costs (fixed / direct) Revenue Streams PI PI SIPI SI SI
  • 20. Agile Process Improvement Problem Interview Exit Criteria • Can identify demographics of an early adopter • Have a must-have problem • Can describe how customers solve the problem today • Have interviewed at least 10 people www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 20
  • 21. Agile Process Improvement Solution Interview Structure www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 21
  • 22. Agile Process Improvement Solution Interview Exit Criteria • Can identify demographics of an early adopter • Have a must-have problem • Can define minimum features needed to solve this problem • Have a price the customer is willing to pay • Can build a business around it www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 22
  • 23. Agile Process Improvement Problem Interview Structure www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 23
  • 24. Agile Process Improvement Distil UVP • Learning to date refines the Unique Value Propositions – Informs the Unfair Advantage too www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 24 Problem Current solutions Solution Metrics Unique Value Proposition High level concept Unfair Advantage Channels to Market Customer Segments Early adopters PI PI SIPI SI
  • 25. Agile Process Improvement Define, Develop & Deliver MVP • Define Minimum Viable Product – Must-have features only – Everything else goes on the backlog – Resist new features • Features must be “pulled” – By customers • Focus on delivering the minimum – Faster delivery = rapid learning – This is a learning stage – Use continuous deployment www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 25 Problem Current solutions Solution PI PI SI
  • 26. Agile Process Improvement Sales Funnel - “Pirate Metrics” www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 26 Acquisition Activation Retention Revenue Referral Users find you Great first experience Users return for more Getting paid Users tell other users Pirate Metrics are Dave McClure’s term – they spell AARRR
  • 27. Agile Process Improvement Acquisition Sub-funnel • Acquisition involves marketing website • Customer path – From 1st landing to interested prospect • 1 Page per step – Primary call to action = next step – Secondary call = more information www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 27
  • 28. Agile Process Improvement Activation Sub-funnel • Activation is customer’s first activity • Architect the flow for learning – Iterate to get it right – Optimise it later www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 28
  • 29. Agile Process Improvement Track Metrics • Track acquisition, activation and revenue • “Cohorts” track specific activities www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 29
  • 30. Agile Process Improvement MVP Interview • Last of the three start-up validation interviews – Final learning stage before scale-up – Validation of a good business idea www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 30
  • 31. Agile Process Improvement MVP Interview Validations www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 31 Problem Current solutions Solution Metrics Unique Value Proposition High level concept Unfair Advantage Channels to Market Customer Segments Early adopters Costs (fixed / direct) Revenue Streams MVP I MVP I MVP I
  • 32. Agile Process Improvement MVP Interview Structure www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 32
  • 33. Agile Process Improvement MVP Interview Exit Criteria • MVP demonstrates and delivers UVP • Price is right • Validate UVP on marketing website • Customers make it through to activation • Channels will drive sufficient acquisitions • MVP will drive sufficient conversions to revenue www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 33
  • 34. Agile Process Improvement Agenda Lean canvas template Prioritisation Validation Summary Appendices www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 34
  • 35. Agile Process Improvement Summary • Running an Agile Business is a learning process – Plan A is a starting point – It’s OK to be wrong, as long as you learn from it – Always update your canvas • Customer engagement is crucial – Validate assumptions – Improve messages – Prove the market www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 35
  • 36. Agile Process Improvement Calls to Action • Buy the book – it’s an inspiration – Includes introduction email, and full interview scripts – Ash gets the royalties for his work and the graphics I have shown • Tell me the problems you are facing right now – I’m a registered and approved GrowthAccelerator coach • Sign-up for the Storm Consulting blog – Loaded with Agile goodness for firms of all sizes and experience www.storm-consulting.com © Storm Consulting 2013. All rights reserved. Not to be reproduced without prior written consent. 36