Lean Startup: It's Not Just Technology, Lives are at Stake


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This is the slide deck from my keynote talk at the first Serbian ICT conference on Technology and Entrepreneurship, held Thursday November 22, 2012 in Belgrade.

For more notes, please see my corresponding Blog entry at http://systemagility.com/2012/11/22/lean-startup-and-lives/

I would love to hear your thoughts and feedback.

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Lean Startup: It's Not Just Technology, Lives are at Stake

  1. 1. Lean Startup:It’s Not Just Technology,Lives are at StakeKen Power
  2. 2. About me!  My day job !  Co-Founder, Agile Office at Cisco !  Internal Agile & Lean Consultant!  Extra-curricular activities !  Fellow of the Lean Systems Society (http://LeanSystemsSociety.org/) !  Award-winning publications in Agile and Lean product development !  Frequent speaker at major international Agile and Lean conferences !  Involved in organizing international Agile and Lean conferences !  Industry/academic collaborative research on Agile and Lean software development !  Blog: http://SystemAgility.com/ !  Twitter: @ken_power
  3. 3. Evolution of a Lean Organization January 2008! December 2009! August 2010! June 2011! May 2012! Formal Agile Portfolio Transition Agile Office Culture and Management Ongoing Pilot Projects Program Established Mindset across the continuous Launched Business Unit improvement2008 2009 2010 2011 2012 2012+• First agile pilots • More Teams • Commitment to • Support teams in • Synchronize all • Create Flow• Agile Projects • Agile Program sustainable and innovating and products across through the• Organic Growth Management sustained agility developing the the BU Organization across the BU • System Wide • Broad processes that • Problem solving • Continue to Lead through ground- Focus Organization are right for them and obstacle through up pilot projects • Formal Training Focus • Expand adoption removal at an Innovation Plan • Focused across product org level • Focus on Teams Stakeholder areas • Organization and Culture • Formal Exec Support Engagement • Lean Startup Learning • Refine and • Closer Customer principles • Quantify and Improve • Broader Stakeholder Engagement • Improve reduce Technical • Build on Engagement • Investigate Lean capability of Debt Organization • Lean Thinking Startup organization • Agile Learning approaches • Develop Portfolio Architecture • Sustainable • Lean Principals Management • Eliminate Waste Organization Concepts
  4. 4. Don’t let this be an excuse:“there were macroeconomic forcesoutside of our control”
  5. 5. What could possibly go wrong?
  6. 6. 6 Myths ofProduct The fallacies thatDevelopment cause delays, undermine quality, and raise costs D.#G.#Reinertsen,#“The$principles$of$product$development$flow$:$second$genera8on$lean$ product$development”.#Redondo#Beach,#Calif.:#Celeritas,#2009.# # # S.#Thomke#and#D.#Reinertsen,#"Six$Myths$of$Product$Development,"#Harvard#Business# Review,#vol.#90,#pp.#84G94,#May#2012#
  7. 7. Myth 1 High utilization of resources and people will improve performance.Myth 2 Processing work in large batches improves the economics of the process.Myth 3 Our plan is great; we just need to stick to it.Myth 4 The sooner the project is started, the sooner it will be finished.Myth 5 The more features we put into a product, the more customers will like it.Myth 6 We will be more successful if we get it right the first time. D.#G.#Reinertsen,#“The$principles$of$product$development$flow$:$second$genera8on$lean$ product$development”.#Redondo#Beach,#Calif.:#Celeritas,#2009.# # # S.#Thomke#and#D.#Reinertsen,#"Six$Myths$of$Product$Development,"#Harvard#Business# Review,#vol.#90,#pp.#84G94,#May#2012#
  8. 8. What is Lean Startup? !
  9. 9. Agile Software Development
  10. 10. Minimum Viable Product
  11. 11. Ideas Learn Build Data Products MeasureThe Fastest Learner Wins
  12. 12. Customer Development
  13. 13. Understand your customersHere is some data about you as agroup
  14. 14. Roles CEO Other Exec Product Manager Engineer Consultant
  15. 15. Organization Profile Startup Established Company
  16. 16. Primary Activity Products Srvices Non Profit
  17. 17. Company Size 2 to 50 101 to 1000
  18. 18. Areas of Interest Innovation Customer Development Short Releases Managing Change Strategy
  19. 19. Entrepreuner or Intrapreuner? Entrepreneur Intrapreneur Neither Both
  20. 20. Experience with Agile, Lean, Lean Startup Lean Startup Lean Agile 0 1 2 3 4 5
  21. 21. Business Model Canvas
  22. 22. Day Month Year No.Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers?Which Key Resources are we acquiring from partners? Customer Relationships? What bundles of products and services are we offering to each Customer Segment? Which ones have we established?Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model? How costly are they? What Key Resources do our Value Propositions require? Through which Channels do our Customer Segments Our Distribution Channels? Customer Relationships? want to be reached? Revenue Streams? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines?What are the most important costs inherent in our business model? For what value are our customers really willing to pay?Which Key Resources are most expensive? For what do they currently pay?Which Key Activities are most expensive? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
  23. 23. http://glennas.wordpress.com/2010/07/31/business-model-innovation-alexander-osterwalder/
  24. 24. Lean Canvas
  25. 25. “This is not the kind ofentrepreneurial question you canask or expect an answer to in afocus group. Customers often dontknow what they want.”
  26. 26. Different Perspectives onOrganization Structure
  27. 27. The Hierarchical Perspective!  Is your organization is a reflection of what it says in the Organization Chart? !  A collection of titles and functional areas?
  28. 28. The Social Network Perspective!  Is your organization the set of diverse relationships that cross functional boundaries?
  29. 29. The Information Flow Perspective!  Is your organization represented by the currents of information that flow through the network?
  30. 30. Remember:(1)  All models are wrong, but some are useful(2)  More than one thing can be true
  31. 31. Technical Debt
  32. 32. Investment Strategy Technical Debt Quality Debt Features Spike Tests Research Planning
  33. 33. Pay your debts, or else… Technical Debt Quality Debt Features Spike Tests Research Planning
  34. 34. Consequences beyond Release 1 12 10 8 6 Features Technical Debt 4 Quality Debt 2 0 Release Release Release Release 1 2 3 4
  35. 35. Management Debt
  36. 36. Value Stream Map
  37. 37. Value Streams!  Whole products or systems!  Product lines!  Portfolios!  Cross-cutting portfolio or product line elements
  38. 38. Manage WIP D.#G.#Reinertsen,#“The$principles$of$product$development$flow$:$second$genera8on$lean$ product$development”.#Redondo#Beach,#Calif.:#Celeritas,#2009.# # # S.#Thomke#and#D.#Reinertsen,#"Six$Myths$of$Product$Development,"#Harvard#Business# Review,#vol.#90,#pp.#84G94,#May#2012#
  39. 39. Planned Ready In Progress Done (3) This is our Planned policy. We will This is our Ready policy. We will start work on something when Work Items are declared ‘Done’ plan something when …. Thanks for reading. …. when ….Request Queue (Backlog)
  40. 40. Understanding Lead Time andCycle Time http://stefanroock.wordpress.com/2010/03/02/kanban-definition-of-lead-time-and-cycle-time/
  41. 41. Cumulative Flow Diagrams
  42. 42. Wastes in Software Development The Seven Wastes of The Seven Wastes of Manufacturing Software Development!  Inventory !  Partially Done Work!  Extra Processing !  Extra Processes!  Overproduction !  Extra Features!  Transportation !  Task Switching!  Waiting !  Waiting!  Motion !  Motion!  Defects !  Defects
  43. 43. Waste elimination and continuousimprovement applies even more to high-performing teams and organizations
  44. 44. PDSA•  Follows the steps of the Scientific Method Act Plan •  Plan: develop a hypothesis or experiment •  Do: conduct the experiment •  Study: collect measurements •  Act: interpret the results and take appropriate action•  Also known as Study Do •  PDCA •  The Deming Cycle •  The Shewart Cycle
  45. 45. Lean Thinking with A3Focus Problem Solving Proposal Writing Project Status ReviewThematic content or Improvements related to Policies, decisions, or Summary of changesfocus quality, cost, delivery, projects with significant and results as an safety, productivity, etc. investment or outcome of either implementation problem solving or proposal implementationTenure of person Novice, but continuing Experienced personnel; Both novice and moreconducting the work throughout career managers experienced managersAnalysis Strong root-cause Improvement based on Less analysis and more emphasis; quantitative/ considering current focus on verification of analytical state; mix of quantitative hypothesis and action and qualitative itemsPDCA cycle Document full PDCA Heavy focus on the Plan Heavy focus on the cycle involved in making step, with Check and Act Check and Act steps, an improvement and steps embedded in the including confirmation of verifying the result implementation plan results and follow-up to complete the learning loopFrom Table 5.1 from “Understanding A3 Thinking”
  46. 46. John Clifford, Construxhttp://forums.construx.com/blogs/johnclif/archive/2009/09/30/if-you-want-to-improve-stop-managing-your-problems.aspx
  47. 47. Applications of A3 Proposal Writing!  Create a Value Stream Manager role to help with Portfolio Backlog Management!  Align all products and components on a quarterly commit cadence!  Ensure architecture consistency across multiple product lines
  48. 48. Applications of A3 Problem Solving!  Reduce Cycle Time for Portfolio Architecture Analysis!  Reduce Product delivery cadence from 6+ months to 3 months!  Reduce the Lead Time for high priority customer requests
  49. 49. Use Lean Management Thinking!  Use A3 Problem Solving reports to help people develop as Value Stream Managers!  Improve their Problem Solving skills!  Help people learn how to navigate the organization
  50. 50. Creativity needs space to develop
  51. 51. Creativity needs space to develop
  52. 52. “Chance favors the connected mind”Where do good ideas come from? YouTube Video
  53. 53. Do try this at home (and work)5 Ways to Foster Innovation andLearning Now
  54. 54. Give yourself andyour team spaceto think
  55. 55. Absorb ideasfrom manyinfluences
  56. 56. Play time
  57. 57. Conduct safe-to-fail experiments
  58. 58. Be prepared topivot
  59. 59. “Creativity and Improvisation in Jazz and Organizations: Implications for Organizational Learning” - Frank J. Barrett"Organization Science" / Vol 9, No.5. September-October 1998 Jazz Improvisation !  Provocative competence: Deliberate efforts to interrupt habit patterns !  Embracing errors as a source of learning !  Shared orientation toward minimal structures that allow maximum flexibility !  Distributed task: continual negotiation and dialogue toward dynamic synchronization !  Reliance on retrospective sense-making !  "Hanging out": Membership in a community of practice !  Taking turns soloing and supporting
  60. 60. The companiesthat are starting upnow have thepotential to savethe world.Someone has to; why not you?
  61. 61. For all our vaunted efficiency in the makingof things, our economy is still incrediblywasteful. This waste comes not from theinefficient organization of work but ratherfrom working on the wrong things – and onan industrial scale. … It is hard to come by asolid estimate of just how wasteful modernwork is.“The criminal waste of humancreativity and potential”
  62. 62. Create Awesome Products
  63. 63. Create Awesome Service
  64. 64. Create Awesome Places to Work
  65. 65. Our Lives are at StakeLife is Short, Time is Precious
  66. 66. Thank You!