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Lean Enterprise - Enabling Innovative Culture

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The pace of change is accelerating. Organizations must continually revisit the question, "What businesses are we in, and how can we organize to maximize our long-term potential?"

Barry O’Reilly and Joanne Molesky share actionable insights on how you can innovate at scale, create high performance organization, and lead in the era of disruption.

Gain insights into processes, portfolio and financial management practices, and organizational design and culture that will help you unleash innovation.

Published in: Business

Lean Enterprise - Enabling Innovative Culture

  1. 1. Joanne Molesky & Barry O’Reilly @jemolesky #LeanEnterprise @barryoreilly ENABLING INNOVATIVE CULTURE
  2. 2. Right now, your company has 21st century Internet enabled business processes, mid 20th century management processes, all built atop 19th century management principles. - Gary Hamel, American Management Expert
  3. 3. MEET THE NEXT GENERATION $1-2B Valuation $2-5B Valuation $5-40B Valuation $40+B Valuation Sources: Dow Jones VentureSource and The Wall Street Journal. Valuations as of March 2015.
  4. 4. KEY FINDINGS OF 2014 DevOps Report •High performance IT doubles your chance to exceed profitability, market share and productivity goals. •DevOps practices strongly correlates with IT performance •Culture matters. Collaboration and experimentation contribute to organizational performance. •Job satisfaction is the No. 1 predictor of performance.
  5. 5. BUSINESS CEO, COO, CFO, CMO TECHNOLOGY CIO, CTO, CDO (Digtial and/or Data) SOFTWARE IS EATING THE WORLD
  6. 6. BUSINESS CEO, COO, CFO, CMO TECHNOLOGY CIO, CTO, CDO (Digtial and/or Data) SOFTWARE IS EATING THE WORLD
  7. 7. BUSINESS CEO, COO, CFO, CMO TECHNOLOGY CIO, CTO, CDO (Digtial and/or Data) SOFTWARE IS EATING THE WORLD
  8. 8. BUSINESS CEO, COO, CFO, CMO TECHNOLOGY CIO, CTO, CDO (Digtial and/or Data) SOFTWARE IS EATING THE WORLD Technology as a strategic capability Willingness to support experimentation Iterative, adaptive working processes and practices Reduce learning anxiety across organization Ability to innovate at scale
  9. 9. CULTURE OF EXPERIMENTATION Theme 1
  10. 10. SHOOK’S VERSION John Shook, MIT Sloan Management Review
  11. 11. CONTINUOUS IMPROVEMENT Humble, Molesky, O’Reilly Lean Enterprise: How High Performance Organizations Innovate At Scale
  12. 12. CONTINUOUS IMPROVEMENT Humble, Molesky, O’Reilly Lean Enterprise: How High Performance Organizations Innovate At Scale
  13. 13. PORTFOLIO
 MANAGEMENT Theme 2
  14. 14. DIFFUSION OF INNOVATION Everett Rogers, Diffusions Of Innovations
  15. 15. CROSSING THE CHASM Geoffrey Moore, Dealing With Darwin
  16. 16. CONTINUOUS LIFECYCLE OF INNOVATION Geoffrey Moore, Dealing With Darwin
  17. 17. BUSINESS MODEL STRATEGIES EXPLORE • Uncertainty • Complex • Emergent • Experimental EXPLOIT •Improved understanding •Cause and effect •Accumulated knowledge •Forecast
  18. 18. INNOVATION PORTFOLIO explore exploit sustain retire kill kill kill kill Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  19. 19. INNOVATION PORTFOLIO explore exploit sustain retire kill kill kill kill Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  20. 20. INNOVATION PORTFOLIO explore exploit sustain retire kill kill kill kill Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  21. 21. INNOVATION PORTFOLIO explore exploit sustain retire kill kill kill kill Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  22. 22. INNOVATION PORTFOLIO explore exploit sustain retire kill kill kill kill Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  23. 23. INNOVATION PORTFOLIO explore exploit sustain retire kill kill kill kill Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  24. 24. INNOVATION PORTFOLIO explore exploit sustain retire kill kill kill kill Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  25. 25. INNOVATION PORTFOLIO explore exploit sustain retire kill kill kill kill Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  26. 26. INNOVATION PORTFOLIO explore exploit sustain retire kill kill kill kill DISRUPT Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  27. 27. PORTFOLIO MANAGEMENT
  28. 28. TRANSPARENCY AND ALIGNMENT
  29. 29. NOTICE A PATTERN?
  30. 30. NOTICE A PATTERN?
  31. 31. NOTICE A PATTERN?
  32. 32. PROOF OF DISRUPTION
  33. 33. G I G A F A C T O R Y
  34. 34. THE DISRUPTION POINT Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  35. 35. CREATING END-TO-END FLOW Theme 3
  36. 36. The main obstacles to improved business responsiveness are slow decision-making, conflicting departmental goals and priorities, risk-averse cultures and silo-based information. Economist Intelligence Unit:
 “Organizational agility: How business can survive
 and thrive in turbulent times”
  37. 37. COMMAND AND CONTROL Compliance rules Risk models Quality controls Inspections Balanced scorecards Target and incentives Budget contracts Adapted from:http://www.bbrt.org/beyond-budgeting/bb-problem.html
  38. 38. COMMAND AND CONTROL STRATEGY EXECUTION ALIGNMENT Compliance rules Risk models Quality controls Inspections Balanced scorecards Target and incentives Budget contracts Adapted from:http://www.bbrt.org/beyond-budgeting/bb-problem.html
  39. 39. COMMAND AND CONTROL STRATEGY EXECUTION ALIGNMENT MICRO MANAGEMENT CONTROL ACCOUNTABLE FOR TARGET
 & BUDGET Compliance rules Risk models Quality controls Inspections Balanced scorecards Target and incentives Budget contracts Adapted from:http://www.bbrt.org/beyond-budgeting/bb-problem.html
  40. 40. COMMAND AND CONTROL STRATEGY EXECUTION ALIGNMENT MICRO MANAGEMENT CONTROL ACCOUNTABLE FOR TARGET
 & BUDGET Compliance rules Risk models Quality controls Inspections Balanced scorecards Target and incentives Budget contracts Adapted from:http://www.bbrt.org/beyond-budgeting/bb-problem.html THE CONTROL OF BUREAUCRACY 10-20% OF COSTS
  41. 41. TRADITIONAL VIEW
  42. 42. TRADITIONAL VIEW BUSINESS Many good ideas, we need money!
  43. 43. TRADITIONAL VIEW BUSINESS Many good ideas, we need money! PROJECTS We’re working, give us money!
  44. 44. TRADITIONAL VIEW BUSINESS Many good ideas, we need money! PROJECTS We’re working, give us money! OPERATIONS That doesn’t work – need more money!
  45. 45. STOP THE PROCESS MADNESS Lean Enterprise Loop Enterprise Loop Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  46. 46. STOP THE PROCESS MADNESS Lean Enterprise Loop Enterprise Loop Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  47. 47. STOP THE PROCESS MADNESS Lean Enterprise Loop Enterprise Loop Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  48. 48. STOP THE PROCESS MADNESS Lean Enterprise Loop Enterprise Loop Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  49. 49. Adhering to budgeting rules should not trump good decision making. - Emily Oster, American Economist
  50. 50. WHAT COULD POSSIBLY GO WRONG? ! !!!! Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  51. 51. WHAT COULD POSSIBLY GO WRONG? $$ $$ ! !!!! Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  52. 52. $$ BIG PROJECT! WHAT COULD POSSIBLY GO WRONG? $$ $$ ! !!!! Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  53. 53. $$ BIG PROJECT!NO CHANGE WHAT COULD POSSIBLY GO WRONG? $$ $$ ! !!!! Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  54. 54. $$ BIG PROJECT!NO CHANGE ! !!!! WHAT COULD POSSIBLY GO WRONG? $$ $$ ! !!!! Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  55. 55. $$ BIG PROJECT!NO CHANGE ! !!!! WHAT COULD POSSIBLY GO WRONG? OPERATION COSTS $$ $$ ! !!!! Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  56. 56. $$ BIG PROJECT!NO CHANGE ! !!!! WHAT COULD POSSIBLY GO WRONG? OPERATION COSTS $$ $$ $$ ! !!!! Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  57. 57. $$ BIG PROJECT!NO CHANGE ! !!!! WHAT COULD POSSIBLY GO WRONG? OPERATION COSTS $$ GREAT JOB! $$ $$ ! !!!! Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  58. 58. $$ BIG PROJECT!NO CHANGE ! !!!! WHAT COULD POSSIBLY GO WRONG? OPERATION COSTS $$ GREAT JOB! WTF? $$ $$ ! !!!! Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  59. 59. FROM PROJECTS … BUSINESS PROJECTS OPERATIONS Many ‘good’ ideas - WE NEED $$$! We’re working - GIVE US $$$! That doesn’t work - NEED MORE $$$! Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  60. 60. TO PRODUCTS… PRODUCTS / SERVICES OPERATIONS Customers Service DeskOps Management Cross-Functional
 Product Teams Teams Push
 Changes Continuously Product Teams for IaaS / PaaS Infrastructure / 
 Platform-As-A-Service Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
  61. 61. PERFORMANCE MEASUREMENT
  62. 62. PERFORMANCE MEASUREMENT MEASURE THINGS THAT MATTER •Do our customers advocate us to others? •What is the outcome we achieved? •Have we reduced complexity of our technology? •Are we getting better?
  63. 63. TAKE AWAYS
  64. 64. TAKE AWAYS Think Big, Start Now, Learn Fast Continuous innovation is a strategic capability Technology is the business
  65. 65. The Lean Institute: http://www.lean.org ! Management Innovation eXchange: http://www.managementexchange.com/ ! Beyong Budgeting Round Table: http://www.bbrtna.org/ OTHER RESOURCES
  66. 66. THANK YOU Joanne Molesky jmolesky@thoughtwoks.com @jemolesky ! Barry O’Reilly
 boreilly@thoughtworks.com @barryoreilly

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