Prepare carefully and wisely…
After figuring out these essential hygiene factors, let’s explore how can you best prepare for the bumpy road ahead.
Getting the right team
All our interviewees agreed that successful teams are diverse teams – in skills, position, and even nationalities and gender.
“Anything that adds a difference in perspective is almost certainly going to help you.”
Tristan explains that diversity is key because it helps us deal with our blind spots:
“One of our biggest problems, as entrepreneurs or intrapreneurs, is that we have blind spots, we all have them. And by definition, we cannot see our own blind spots; it takes somebody else with a different perspective. So if you have a team and it’s made of five white male engineers in their twenties it’s less likely to work as well as a diverse team consisting of men, and women, engineers and designers, multi-national, and racially diverse. Any little bit of diversity is going to approach problems with a different mindset and toolset for a better overall solution.”
Besides having a healthy composition of diverse and cross-functional teams, Andy recommends to scout for the entrepreneurial employees to form them:
“It’s far more efficient to focus your efforts on identifying those who already are motivated by risk taking, failing and learning, and to help those individuals by instilling a purpose that they can rally behind and the autonomy, tools and skills that they need in order to turn innovation from simple lip service into reality.”
Tristan gives a good and quick tip on how to identify the more entrepreneurially oriented staff:
“You can have an innovation challenge, a hackathon, or even just say ‘I have five free books about Lean Startup,’ and the first people to email you are probably the ones who are inspired to learn more.“
Sonja adds on the importance of letting the team own the product from idea to launch. It is always a good idea to keep at least one person from when the team was formed until the project ends.
At Transavia they are already doing that and Vincent explains how:
“We have a ‘product owner’ who is part of the development team, and they are responsible for translating the value proposition to development work. We also have an ‘epic owner’ who owns the idea, for example the product manager, and who stays with the team from idea to implementation.”
In terms of team size, most agree that small teams preform better, as they make communication and decision-making faster. Craig recommends 2-4 members, and Andy advises to (preferably) have no more than seven people on the team.
Clear rules of engagement
Our practitioners and experts put a lot of emphasis on defining stages of development, assigning the right KPI’s for every stage, and giving clear guidelines for employees to follow. Craig puts the task at hand well: “demystify what you are supposed to do”. In practice, what they do in Cisco to demystify “innovation”, is:
“Our Innovation Funding Board (IFB) framework uses an Implementation Readiness Level (IRL), which consists of 9 milestones in the lifecycle of an incubating idea, that are congruent with Lean Startup and Discovery Driven Planning. This approach gamifies how to incubate ideas for the incubation teams and clearly shows to the IFB where in the lifecycle the idea currently is.
As teams do the work needed to move between IRL levels, we monitor the Lean Startup behaviors in order to ensure that they are living up to the customer validated learning approaches. Coaches / mentors (technical, business and incubation) help the teams navigate those waters as well. Our templates start off low fidelity and increase in fidelity as the incubation teams move up the IRL.
The funding boards dole out small tranches of funding and the teams enjoy autonomy as long as they live up to the best of class behaviors and don’t need additional support. We are still learning how to do all of this well, but making progress.”
At Transavia, Vincent helps to manage a portfolio, where they define four crucial stages: 1. Idea phase, which includes: finding the real customer problem, ideation, and validating the solution. 2. Analysis phase, where internal or external consultants make an in-depth analysis of the idea from a business and IT perspective. 3. Development phase. 4. Improvement phase, where the focus is on continuous improvement.
At Pearson they have six stages of the product lifecycle journey: 1. Ideation. 2. Exploration. 3. Validation (their version of building an MVP). 4. Growth. 5. Sustaining the business. 6. Retiring.
“Each of the stages has a set of rules, and behaviors and principles that you are supposed to adhere to, and there is a gate between the stages with a clear set of KPIs, that the Product Councils use to make a decision on whether that idea should move from one stage to another.”
Having clear rules of engagement need to be well communicated and employed by bottom-up and top-down. Craig developed his own version of the playbook and workbook that teams follow, and also provides access to workshops, mentoring and coaching. However, he warns that you can build great infrastructure but it’s not sufficient: “You’d never get the traction that you need, if you don’t engage top-down as well.”
It is without doubt that creating comprehensible steps that can be followed, monitored, and used to base decisions on are needed. These steps are also a way to connect bottom-up and top-down and make sure that everyone gets their hands dirty.
Getting the finance department on board
Sonja: “Teams are going to spend a little bit of money to prove or disprove an idea and you need to bring your finance teams on that journey as well and educate them on what this means.”
In Pearson they use the six stages to assign budget. In this way, everyone is on the same page.
Similarly, in Cisco, the funding board plays a major role in the support of teams. By having clear rules of engagement, teams know what they need to do in order to continue to secure funding for the next phase in their development, and the funding board can easily assess their progress and decide if the team is performing well or not.
Finding the right incentives
“You cannot expect someone to both execute on the current business model and start up new ones, if there are no incentives for doing so.” – Andy Cars.
Craig strongly believes that intrinsic incentives trump extrinsic ones:
“Just the ability to work on your own idea, to solve problems being worthy of solving and feel the joy of creation – those intrinsic motivators usually do the trick. While extrinsic ones tend to demotivate, ‘so you paid me a thousand dollars to work on my idea, that’s insulting.’ This approach turns what was a thrilling pursuit of your idea into just being a job. So I find that extrinsic incentives, unless you make them really big, tend to de-motivate.”
In fact, extrinsic incentives can even be dangerous. Tristan gives the example of a company who paid development teams per x-number of lines of code. Maybe at first thought it seems to motivate, but even when the product is a bad idea, they still pursue it.
At Pearson, Sonja and her team are looking into the best models of incentives that they can provide. But Sonja is very clear on one thing – you need to empower people. Sonja gives high importance to building a framework that trains people, builds new skills, and empowers people to apply Lean Startup and make decisions.
Additionally, they are promoting the incentive to fail, quickly and cheaply, to save the company lots of money. Sonja: “We have been working really hard to help employees distinguish between ideas failing and you failing personally.”
With empowerment there should also come a degree of autonomy. Andy suggests creating a separate entity from the mother company. In that way teams can set-up their own culture, and even bring in external investors and have their own board of directors. But at the same time there needs to be some support from the mother company, for example: open up access to distribution networks, to marketing channels, customers, etc.
Finding a good pace
Lean Startup is not necessarily about doing things as cheap as possible, it’s about learning and learning fast.
At Transavia, they used the Agile Framework to scale up their IT development. Vincent explains
“After one or two years we were really fast in developing things, but not that fast in ideation or creating new business models or concepts. That’s why we added Lean Startup to do a rapid validation of business concepts.”
“For us it’s a philosophy”, Vincent goes, “How fast can you iterate, learn, and improve, and have transparency so that you can show your progress to stakeholders.
Recently a product manager, said to me: ‘I have the assumption that people who fly on our route from London to Paris stop during the booking process because we do not offer the price in pounds’, so we said: ‘Okay, that’s easy to validate with an AB test, set it up and I will help you to do it in a Lean Startup approach to validate your assumption before we start developing all kinds of stuff’.
So there was an experiment of maybe half a day configuration and two weeks learning. At such a short period we had great insights about the real conversion and the real reason why they left our website and that did validate that indeed what she thought was the problem.”
Tristan has a ‘one-experiment-per-week-minimum’ rule. Of course he would love to see more than one experiment completed, but getting at least one done is a must.
Communicating the value of Lean Startup
This may seem like an obvious fact, but communicating the value of Lean Startup to the different stakeholders is not always so apparent to companies. Just like we talked about finding the right language when talking to executives, you need to find the right language to convince all the layers in a traditional organization. You cannot assume that the executive team is mandating the Lean Startup, even if you talk to them.
“People at various levels of the organization need to understand – what is it for them? Why do they need to start working in different ways? What does this mean? Connect what you are saying to some learning objectives, training, and career progression incentives. That is super important.” – Sonja.
“It’s really important to develop a common language. When someone says ‘innovation’, their meaning of the word is most likely very different to someone else’s.
So we usually start by establishing a common language followed by a shared understanding of the need for change, before attacking the ‘what’ and ‘how’. If people don’t understand why change is necessary, there’s no point talking about specific tools and methods and how to implement them.” – Andy.