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Creating an Agile Business
Mile High Agile
Zach Nies
@zachnies
Zach Nies, Chief Technologist
Rally Software
zach.nies@rallydev.com
Font Sampler
http://en.wikipedia.org/wiki/File:Caslon-schriftmusterblatt.jpeghttp://media.kelbymediagroup.com/layersmagazine/images/columns/artoftype/may06/glyph-set.jpg
I love to change
industries
Apply new
disciplines
Become disciplined
explorers…
who know how to
balance exploration
and execution
Build what
people want
Create
a viable business
What	
  happened	
  to	
  
this	
  company?	
  
1	
   2	
   5	
  
iPhone	
  Released	
  1	
  
iPhone	
  App	
  SDK	
  Released	
  2	
  
Android	
  w/	
  Nav	
  Released	
  5	
  
Major	
  Recession	
  3	
  
3	
  
TomTom	
  iPhone	
  App	
  4	
  
4	
  
A lot can !
happen in !
1 year.!
The	
  characteris3cs	
  of	
  
innova3on	
  are	
  changing	
  
Is your business
Agile enough?!
Turn these
disruptions into
opportunities!
What’s	
  changing?	
  
Technology	
  adop3on	
  
hAp://upload.wikimedia.org/wikipedia/en/4/45/DiffusionOfInnovaKon.png	
  
hAp://upload.wikimedia.org/wikipedia/en/4/45/DiffusionOfInnovaKon.png	
  
What if…!
hAp://upload.wikimedia.org/wikipedia/en/4/45/DiffusionOfInnovaKon.png	
  
hAp://hbr.org/2013/03/big-­‐bang-­‐disrupKon/	
  
Disrup3on	
  has	
  a	
  
bigger	
  impact	
  
Time	
  to	
  excellence	
  
hAp://en.wikipedia.org/wiki/File:DisrupKvetechnology.gif	
  
hAp://en.wikipedia.org/wiki/File:DisrupKvetechnology.gif	
  
Excellence!
Some examples…!
1984!
2006!
About 20 years!
2001!
2006!
5 years!
2007!
2010!
3 years!
2010!
2012!
2 years!
2008!
2012!
4 years!
1979!
1989!
10 years!
5 years!
2.5 years!
1.5 years!
Disrup3on	
  can	
  sneak	
  
up	
  on	
  you	
  
Impact	
  on	
  companies	
  
500
Question:!
!
How long does the average company
on this list survive?!
1958: !
Average lifespan was 61 years!
!
2012: !
Average lifespan was 18 years!
Market	
  churn	
  creates	
  
uncertainty	
  	
  
Your	
  business	
  needs	
  to	
  
become	
  more	
  Agile	
  
Don’t	
  fall	
  off	
  the	
  
commitment	
  cliff	
  
CostValue
Time
Value
Value of commitment – Normal!
CostValue
Time
Value Opp Cost
Value of commitment – Normal!
CostValue
Time
Value	
   Opp	
  Cost	
   Total	
  Value	
  
Value of commitment – Normal!
CostValue
Time
Value Opp Cost Total Value
Optimal commitment!
Value of commitment – Normal!
Value of commitment – High Uncertainty!
CostValue
Time
Value
Value of commitment – High Uncertainty!
CostValue
Time
Value Opp Cost
Value of commitment – High Uncertainty!
CostValue
Time
Value Opp Cost Total Value
Value of commitment – High Uncertainty!
CostValue
Time
Value	
   Opp	
  Cost	
   Total	
  Value	
  
Optimal commitment!
Value of commitment – High Uncertainty!
An example…!
CostValue
Time
Value Opp Cost Total Value
Ability to respond!
Optimal commitment!
CostValue
Time
Value Opp Cost Total Value
Ability to respond!
Fastest

Response?!
Agile	
  teams	
  &	
  
organiza3on	
  	
  
Steering	
  
vs.	
  
Planning	
  
Technology	
  adop3on	
  is	
  
a	
  human	
  phenomenon	
  	
  
Not	
  a	
  technological	
  
phenomenon	
  	
  
An example…!
Tribes	
  are	
  
more	
  connected	
  
Change	
  creates	
  
uncertainty	
  
Chaotic! Simple!Complicated!Complex!
Uncertainty!
Take
Action!
Follow
Rules!
Analyze!
Guess &
Learn!
Chaotic! Simple!Complex! Complicated!
Uncertainty!
Take
Action!
Follow
Rules!
Analyze!
Guess &
Learn!
Chaotic! Simple!Complex! Complicated!
Bureaucrat!Engineer!Firefighter! Entrepreneur!
Uncertainty!
Take
Action!
Follow
Rules!
Analyze!
Guess &
Learn!
Chaotic! Simple!Complex! Complicated!
Firefighter! Bureaucrat!Engineer!Entrepreneur!
Uncertainty!
E
x
p
l
o
r
e
E
x
e
c
u
t
e
Uncertainty!
E
m
e
r
g
e
A
n
a
l
y
z
e
Uncertainty!
E
x
p
e
r
i
m
e
n
t
P
l
a
n
Uncertainty!
Chaotic! Simple!Complicated!Complex!
Product lifecycle!
Chaotic! Simple!Complicated!Complex!
Product lifecycle!
Chaotic! Simple!Complicated!Complex!
Product lifecycle!
Chaotic! Simple!Complicated!Complex!
Product lifecycle!
Chaotic! Simple!Complicated!Complex!
Disruption!
Product lifecycle!
Chaotic! Simple!Complicated!Complex!
Disruption!
Product lifecycle!
Naviga3ng	
  
uncertainty	
  
Discovering	
  
demand	
  
	
  
Amplifying	
  
engagement	
  
hAp://www.flickr.com/photos/isaacmao/380257543	
  
Create a plan to
predict the future!
Market research!
Product definition!
Product requirements!
Detailed plan!
Alpha release!
Beta release!
Final release!
FIRST CONTACT WITH
CUSTOMERS!
Market research!
Product definition!
Product requirements!
Detailed plan!
Alpha release!
Beta release!
Final release!
FIRST CONTACT WITH CUSTOMERS!
Market research!
Product definition!
Product requirements!
Detailed plan!
Alpha release!
Beta release!
Final release!
FIRST CONTACT WITH
CUSTOMERS!
Market research!
Product definition!
Product requirements!
Detailed plan!
Alpha release!
Beta release!
Final release!
FIRST CONTACT WITH
CUSTOMERS!
Market research!
Product definition!
Product requirements!
Detailed plan!
Alpha release!
Beta release!
Final release!
FIRST CONTACT WITH
CUSTOMERS!
Market research!
Product definition!
Product requirements!
Detailed plan!
Alpha release!
Beta release!
Final release!
FIRST CONTACT WITH
CUSTOMERS!
Market research!
Product definition!
Product requirements!
Detailed plan!
Alpha release!
Beta release!
Final release!
FIRST CONTACT WITH
CUSTOMERS!
HOW MANY
GUESSES?!
FIRST CONTACT
WITH POTENTIAL
CUSTOMERS!
hAp://www.flickr.com/photos/oregondot/4132135156	
  
Obscure

the uncertainty

with details!
Embrace and
reveal

the uncertainty!
Sounds like

a startup!
How does

Eric Ries define

a Lean Startup?!
Where does
uncertainty live?
Brown,	
  Tim	
  (2009-­‐09-­‐16).	
  Change	
  by	
  Design	
  (Kindle	
  LocaKon	
  1984).	
  Harper	
  Collins,	
  Inc..	
  Kindle	
  EdiKon.	
  	
  
Where are you?
Brown,	
  Tim	
  (2009-­‐09-­‐16).	
  Change	
  by	
  Design	
  (Kindle	
  LocaKon	
  1984).	
  Harper	
  Collins,	
  Inc..	
  Kindle	
  EdiKon.	
  	
  
Brown,	
  Tim	
  (2009-­‐09-­‐16).	
  Change	
  by	
  Design	
  (Kindle	
  LocaKon	
  1984).	
  Harper	
  Collins,	
  Inc..	
  Kindle	
  EdiKon.	
  	
  
Level of uncertainty
Type of innovation
Sustaining
Brown,	
  Tim	
  (2009-­‐09-­‐16).	
  Change	
  by	
  Design	
  (Kindle	
  LocaKon	
  1984).	
  Harper	
  Collins,	
  Inc..	
  Kindle	
  EdiKon.	
  	
  
When to
explore vs execute?
What to do
Brown,	
  Tim	
  (2009-­‐09-­‐16).	
  Change	
  by	
  Design	
  (Kindle	
  LocaKon	
  1984).	
  Harper	
  Collins,	
  Inc..	
  Kindle	
  EdiKon.	
  	
  
Execute
What to do
Brown,	
  Tim	
  (2009-­‐09-­‐16).	
  Change	
  by	
  Design	
  (Kindle	
  LocaKon	
  1984).	
  Harper	
  Collins,	
  Inc..	
  Kindle	
  EdiKon.	
  	
  
What to do
Big
Companies
Brown,	
  Tim	
  (2009-­‐09-­‐16).	
  Change	
  by	
  Design	
  (Kindle	
  LocaKon	
  1984).	
  Harper	
  Collins,	
  Inc..	
  Kindle	
  EdiKon.	
  	
  
Big
Companies
hAp://www.flickr.com/photos/ironnickel/6076087519	
  
Startups
hAp://www.flickr.com/photos/elcapitan/2387917709	
  
Example – Taxi Cabs
hAp://www.flickr.com/photos/emilyrides/5048843409	
  
Brown,	
  Tim	
  (2009-­‐09-­‐16).	
  Change	
  by	
  Design	
  (Kindle	
  LocaKon	
  1984).	
  Harper	
  Collins,	
  Inc..	
  Kindle	
  EdiKon.	
  	
  
Discover the future!
Validate!Discover! Transition!
Business Model!
Vision and Empathy!
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
“Get out of the
building!”!
Steve Blank!
“Meaning emerges
through
interaction”!
Dave Snowden!
Vision and Empathy!
Discover the future!
hAp://www.flickr.com/photos/klearchos/4541072707	
  
Vision!
The idea is NOT the
only thing that
matters.
What does matter?
According to Simon Sinek
hAp://www.flickr.com/photos/usarmyafrica/4553749920	
  
Empathy!
hAp://www.flickr.com/photos/skillerphotos/7875656716	
  
Discover the future!
Business Model!
Vision and Empathy!
Business Model!
1 234
5
67
8
9
Example – iPod
hAp://www.flickr.com/photos/75001512@N00/4683351383	
  
Walkman for
the digital age
Design, Manufacturing,
Marketing, Support
+ Margin & Profit
hAp://www.flickr.com/photos/mrmonochrome/93535053	
  
Discover!
Discover!
Business Model!
Vision and Empathy!
Discover!
Problem

Discovery!
We understand the
problem a customer

wants solved!
Discover!
Customers don’t care
about your solution.
They care about their
problems.
“
Dave McClure
hAp://www.flickr.com/photos/adacKo/2535502416	
  
Typical
market research:
Customer
attributes
hAp://www.flickr.com/photos/serpicolugnut/172616929	
  
Innovation
market research:
Customer
circumstances
hAp://www.flickr.com/photos/icanchangethisright/3195180388	
  
hAp://www.flickr.com/photos/twostoutmonks/664314897	
  
What job is
your solution being
hired to perform?
Milkshake Test
hAp://www.flickr.com/photos/icanchangethisright/3195180388	
  
hAp://www.flickr.com/photos/twostoutmonks/664314897	
  
Competition
hAp://www.flickr.com/photos/16339684@N00/2498270160	
  hAp://www.flickr.com/photos/nkarim/6761890929	
  
hAp://www.flickr.com/photos/icanchangethisright/3195180388	
  
hAp://www.flickr.com/photos/jorgebrazil/2421696121	
  hAp://www.flickr.com/photos/like_the_grand_canyon/5661863401	
  
hAp://www.flickr.com/photos/twostoutmonks/664314897	
  
hAp://www.flickr.com/photos/makelessnoise/333188801	
  
hAp://www.flickr.com/photos/rodrigofavera/2636733253	
  
Discover!
Solution

Validation!
Our product idea

solves the customer’s

problem!
Discover!
Test a low fidelity
Minimum Viable
Product
Goal: Get real
feedback without
building a real
product
How?
Video Demo (Landing Page)
Concierge
Wizard of Oz
Crowd Funding
Single Key Feature
Video Demo (Landing Page)
Concierge
Wizard of Oz
Crowd Funding
Single Key Feature
Create a real product
experience with the
least effort possible
The MVP…
hAp://www.seanpercival.com/blog/2012/10/21/pre-­‐inventory-­‐startups/	
  
Delivering	
  Happiness:	
  A	
  Path	
  to	
  Profits,	
  Passion,	
  and	
  Purpose	
  
By	
  Tony	
  Hsieh	
  
Discover!
Business

Validation!
Our business model

can be profitable!
Discover!
High level business model
hAp://www.forentrepreneurs.com/saas-­‐metrics/	
  
Discover the future!
Business Model!
Vision and Empathy!
Pivot

or

Persevere?!
Validate!
Validate!
Business Model!
Vision and Empathy!
Validate!
Prepare to Sell!
The founders can:

Understand the flow of
money and sell the offer!
Validate!
You
?
Find
Earlyvangelists
Validate!
Close
Deals!
Our draft sales plan will
close or activate
customers!
Validate!
Sales Funnel
hAp://www.flickr.com/photos/carlagates247/5524789016	
  
Activation Funnel
hAp://www.flickr.com/photos/500hats/577630547	
  
Validate!
Package
Offer!
We can package, price,
position and promote

our offer!
Validate!
For (target customers)
Who (have the following problem)
The (product name) is a (describe the
product or solution)
That provides (key benefit)
Unlike (reference competition),
The product/solution (describe the key
point of competitive differentiation)
Product Positioning
Discover the future!
Business Model!
Vision and Empathy!
Pivot

or

Persevere?!
Discover the future!
Transition!
Business Model!
Vision and Empathy!
Transition!
Transition
Team!
We have budget and

a cross departmental
transition team!
Transition!
Managing	
  a	
  Porcolio	
  	
  
The	
  Three	
  Horizons	
  Model	
  
Horizon	
  1	
  
0	
  to	
  12	
  months	
  
Horizon	
  2	
  
12	
  to	
  36	
  months	
  
Horizon	
  3	
  
36	
  to	
  72	
  months	
  
Current	
  
Businesses	
  
	
  
Generate	
  
today’s	
  cash	
  
flow	
  
High	
  Growth	
  
Businesses	
  
	
  
Today’s	
  
revenue	
  growth	
  
+	
  tomorrow’s	
  
cash	
  flow	
  
Growth	
  OpKons	
  
	
  
OpKons	
  on	
  
future	
  	
  
high-­‐growth	
  
businesses	
  
Expected	
  Window	
  of	
  Returns	
  
Accumulated	
  Total	
  Returns	
  
Figure	
  2.4	
  
20% time or
separate H3 groups?
Dedicated
H2 transition
Four Modes of Execution
Execution Mode Invention Deployment Optimization Transitions
Type of Leader
Visionary
Inventor
Pragmatic
Deployer
Conservative
Optimizer
Pragmatic
Orchestrator
Core Competence Creativity Competitiveness Control Collaboration
Core Attribute Spontaneous Tough-minded Prepared Empathetic
Decision Style Intuition Experimentation Deliberation Consensus
Functions Most in
Alignment
R&D, Creative
Services
Sales, Engineering
Finance,
Operations
HR, Marketing,
Customer Suppt
Figure	
  6.4	
  
Transition!
Integrate
into Depts!
Transition!
Departments can take on
our new offer!
From
Exploration
to
Execution
hAp://www.flickr.com/photos/mckaysavage/497593758	
  
Inventors
Inventor to department transition
Orchestrator
Inventors Deployers
Departments
Inventor to department transition
Orchestrator
Inventors Deployers
Departments
Inventor to department transition
Orchestrator
Inventors Deployers
Departments
Inventor to department transition
Orchestrator
Inventors Deployers
Departments
Inventor to department transition
Product
Engineering
Sales
Marketing
Orchestrator
Inventors Deployers
Departments
Inventor to department transition
Product
Engineering
Marketing
Sales
Orchestrator
Inventors Deployers
Departments
Inventor to department transition
Product
Engineering
Marketing
Sales
Validate!
Roll off
Inventors!
We no longer need our
inventors on the team!
Transition!
Orchestrator
Inventors Deployers
Departments
Inventor to department transition
Product
Engineering
Marketing
Sales
Orchestrator
Inventors Deployers
Departments
Inventor to department transition
Product
Engineering
Marketing
Sales
Orchestrator
Inventors Deployers
Departments
Inventor to department transition
Product
Engineering
Marketing
Sales
Departments
Inventor to department transition
Product
Engineering
Marketing
Sales
Discover the future!
Validate!Discover! Transition!
Business Model!
Vision and Empathy!
Discover the future!
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Guesses!
Knowledge!
Experiments!
Empathize & Frame!
Test & Measure!
Build&Ship!
Learn&Share!
Experiments!
TAKE EACH MAJOR GUESS
RUN AN EXPERIMENT
hAp://www.youtube.com/watch?v=Iyjs3zeoSrM	
  
hAp://www.richard-­‐feynman.net/gallery.htm	
  
Feedback!
Feedback!
Feedback!
Culture
No blame or shame
Democratize data
Use quantitative
and qualitative data
Distribute
decision making
Diversity
Independence
Decentralization
Aggregation
Run small
experiments
hAp://www.flickr.com/photos/5wa/6400997231	
  
Slack
Discover the future!
Validate!Discover! Transition!
Frame
Measure
Build
Learn
Business Model!
Vision and Empathy!
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Frame
Measure
Build
Learn
Disciplined	
  
explora3on	
  
Extend Agility into
your business!
Take advantage of
market
opportunities!
What	
  happened	
  to	
  
this	
  company?	
  
1	
  
Began	
  Using	
  Lean	
  Startup	
  1	
  
2	
  
$50M	
  in	
  New	
  Product	
  Revenue	
  2	
  
3	
  
1800	
  Concurrent	
  Experiments	
  	
  	
  2	
  
Books that informed this talk
Geoffrey
Moore
David
Snowden
Ash
Maurya
Tim
Brown
Clayton
Christensen
Steve
Blank
Eric
Ries
People who informed this talk
Brant Cooper
Patrick
Vlaskovits
hAp://www.flickr.com/photos/flaAop341/224597838	
  

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