Lean Startup

Innovation Power Tools 0

Author Dave Powers offers a practical approach to sustaining long-term growth. The Curve Ahead: Discovering the Path to Unlimited Growth describes how growth companies can build innovation into the rhythm of their business operations and culture using design thinking, prototyping, business model design and other Innovation Power Tools. This podcast is not just for established companies. If you are a Startup and want to see what is ahead if you are successful , you need to listen. Dave Power

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Design Think Your Way to Sales 0

Could this approach actually make Sales a Noble Profession? Regis Lemmens

I had the pleasure of discussing with Régis Lemmens his new book, From Selling to Co-Creating. He is a partner at Sales Cubes, a sales management consulting firm located in Belgium, specializing in sales and key accounts management. He is a firm advocate of design thinking in business and helps organizations to apply this approach to innovate and redesign their sales processes finding new ways to add value to their customers.

Regis is a member of the team of experts at Impulse Brussels (the Bussels Enterprise Agency for starting and experienced entrepreneurs) where he serves as coach for startups to help them to develop and implement their commercial strategies. He also volunteers as a coach at the ‘Startup Weekend’ events in Belgium where he helps future entrepreneurs with the development of their business ideas.

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Is the Sales of Tomorrow based on Lean Startup Thinking? 0

From Selling to Co-Creating is not just an academic conversation. It is happening and this ground breaking book is discussed in tomorrow’s Business901 podcast. I had the pleasure of discussing this topic with Régis Lemmens, a consultant, author and teacher on the topic of sales and sales management. He is a partner at Sales Cubes, a sales management consulting firm located in Belgium, specializing in sales and key accounts management.

The podcast and the book delves into this more but I think it is important to understand the interpretation of co-creation. Borrowing from the book:

Value for the customer is co-created by the interaction between the customer and the sales person concerning the job the customer wants done. This means that the customer is always involved at in the process, learns something out of the process and has the feeling or emotion about the whole process, thus both tangible and intangible outcomes may be created, both tangible and intangible forms of value.

The book also goes into describing the Sales person’s interaction which I think is imperative. When I think of co-creation, I simply state that there must be a vested interest in a common outcome (job to be done) by both the seller and the customer.

What is your definition of co-creation?

An excerpt from the podcast:

Joe Dager: We’re talking about this co-creation, co-innovation, adaptability and agility. How does the sales person fit into this? How do they go out and sell? Can he drive someone’s interest there? Or, is this a re-definition of sales happening?

Régis Lemmens: We call it a re-definition of sales, absolutely. We actually see sales becoming more a strategic function in an organization; where marketing used to define the strategy, sales executes it and was more operational. We’re actually seeing more and more organizations today, where sales is way too expensive to keep a dozen operational tools. They’re using sales people now to, basically, develop relationships with key accounts and using those relationships to innovate and to develop new products with those key accounts.

This is kind of interesting because where marketing used to be the ones with focus groups or developing new products with customers, it’s actually the key account managers who are doing that. Now, you see marketing actually drawn more and more into the operational side saying, “Whatever we’ve developed with those key accounts, have a look at it and see if you can market it to a larger market using call centers, the internet and any other form.”

We actually see change. Sales is becoming way more strategic; marketing is becoming way more operational; in terms of how organizations look at them.

Joe: You discuss Lean Start-Up principles when talking with key customers. I think it is very intriguing. I use maybe what you might call a modified type Lean Start-Up approach. Is that something that sales people bring to the table now? Doesn’t marketing try to discover product customer fit or service customer fit?

Régis: I think even sales does it. I think even sales is involved in that. The sales of tomorrow, as we see it, is more an entrepreneur and he will do the lean start-up. He will be involved in the customer validation and product validation. That’s pretty much the role of sales.

To tell you an anecdote in the Netherlands, a big technology research organization and consultancy, I was given a workshop on my book. I addressed a hundred and fifty sales people and I called them sales people. Believe me, they were heavily offended. By the second time I did that that day, they made it very clear that they did not want to be called sales people. Yet, officially they were but they were business developers.

That was really because they see the task really, really differently. They see it as really being an entrepreneur. They go in, find new opportunities, develop them with the customer, validate it with the client; and that’s how they see themselves. They don’t like to be even seen as a sales person because that’s too linked to the old ways of selling products door to door.

What is your definition of co-creation?

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Ramblings on Lean Product Development and Design 0

So what has happened to Lean Product Development and Lean Design? I had mentioned Allen Ward previously and his pioneering work in the area of Lean Development. Allen unfortunately passed away several years ago ( a tribute to his work) and his torch; I believe has best been picked up by Michael Kennedy who has written several books on the subject. The picture below was created from his book,Product Development for the Lean Enterprise: Why Toyota’s System is Four Times More Productive and How You Can Implement It and represents the change gap between past product design and future product design. As you can see design and innovation pulls from the expertise of the workers (knowledge-based) rather than management creating direction (structured).

Kennedy Change Gap

This is Lean Design of the future. If you envision the Business Model Canvas of Alex Osterwalder’s as the value stream, you will see how Lean is poised to create the eco-system that is need for new product/service development. It is Lean Thinking, that culture of PDCA embedded in the workforce that creates the pull and the resulting flow from and with the customer. This is how demand is created. Without the existing culture, the existing eco-system every product has to be a breakthrough. Even Apple understands, watch this video.

I cannot think of a better description, of how I look at Design and how in the power of the story lies the secret to innovation. Dorsey also explains his admiration for Apple’s ability to tell epic stories. The secret of Apple’s success, I always thought were the exact points he describes in this video.

P.S. I agreed with so much of what this guy says that have to admit that I think he is brilliant!

Are we there yet? The last few years we are now seeing implementation of the Lean 3P principles of Design. Development of the 3P process is attributed to Chichiro Nakao, a former Toyota group manager and the founder of Shingijutsu company. The accepted meaning of 3P is Production, Preparation, Process. Toyota delivers product designs on schedule 98% of the time (as stated by @flowchainsensei on twitter). Now, I am not sure how I can confirm this statement except that I believe this source to be accurate and even if Bob was 50% wrong, it would mean Toyota still exceeds the majority. However, after interviewing Allan R. Coletta, author of a new book The Lean 3P Advantage: A Practitioner’s Guide to the Production Preparation Process and reading the book, I can understand and believe that statement. This is an excerpt from the book:

Lean 3P is a powerful enabler for invention and innovation because it creates a structure and a process for people to create both independently and collaboratively. However, 3P is not presented as a “one size fits all” means of creating brilliant new products that takes us from “blue sky” to product launch. It might work like that in some instances where a new product is a variation of an established product or in organizations where the same team is inventing, developing, and working together to launch a new product. With additional experience the role of 3P in the full product development will likely expand. For companies new to Lean 3P, the question might be how 3P will integrate into existing product development processes.

I highly recommend learning more about Lean 3P and the best place to start is with the podcast and/or eBook with Alan:

Podcast: Lean 3P is PDCA on Steroids, eBbook: Introduction to Lean 3P Design Process

I would follow up that with listening or reading the post with Ron Mascitelli, president of Technology Perspectives. Lean Design interview with Ron Mascitelli. Ron is the author of five books, his most-recent publication, Mastering Lean Product Development: A Practical, Event-Driven Process for Maximizing Speed, Profits, and Quality.

Podcast: Lean Design interview with Ron Mascitelli, eBook: Lean Design and Development

Before the podcast, I had been struggling on how, or even if I should use Stage Gates or Control Points in the Lean Service Design methodology. I questioned Ron about this. In an excerpt from the podcast, he explains how he has eliminated them.

Joe: That’s an interesting take on it, because it’s not necessarily a Kaizen event?

Ron: No. Other than the fact Kaizen events are a great example of how powerful this kind of intensive collaboration with a high focus can be. But it’s not a Kaizen event in the classical sense of being continuous improvement. It is an execution event, where you have, again, a standard preparation in advance. Everyone, within their role, comes to this very cross functional event with preparation, information, and in some cases completed work. When we get in the event, we follow an agenda of tools, discussion, and prioritization. Then ultimately, we have a standard output that determines the close of the event.

In fact, if we don’t close the event properly, if we don’t reach that outcome, we reconvene in a week or whenever we can, and we continue until we can reach that closure.

I think it’s a very powerful forcing function for timely decision making and for really getting all the voices together, looking at the same issues and problems, and answering the same question.

Joe: Do these happen at phase gates or control points of the process, then?

Ron: Actually, in my perfect vision of the world, the events become the phases and gates. Our market requirement event is a knowledge gate, so is our project planning event. The rapid learning cycle event, which is to burn down your early risk on a project, each of these, in a sense, are knowledge gates. So in my perfect word, we don’t use artificial governance gates like concept freeze gate and a detail design freeze gate or whatever they might be. We actually use these events as knowledge gates. But in most companies that already have a comfortable language of governance, we just embed the event at the appropriate phase and it will give you the outputs you need for your existing gate reviews.

Joe: So it’s really a way of distributing all the knowledge that needs and deciding on what knowledge you need to proceed with. Is that a simple explanation of it?

Ron: Perfect, perfectly well said. If you think about it, in product development all of the knowledge that is needed to create the best commercial product in the world resides in the heads of the cross?functional groups that you have in your company. It’s all in there somewhere. All they need is a problem to focus on and the ability to somehow pull all of that diverse cross?functional knowledge together in a way that’s optimal. So really that’s what we’re trying to get at here. Really, it’s forcing collaboration, not just names on a list, “Oh yeah, we’ve got a manufacturing person on the team. See here’s Joe, he’s listed down here on the list.”

It’s getting them in the room, break down the barriers to communication, have a common vision and a common set of tools they use so that we really do get that consensus input. Product development can’t be optimized without the contribution of virtually every function in the firm at one time or another.

Ron’s book is Mastering Lean Product Development

We have moved from stage gate thinking across the top of the page to Event style collaborative agreement on a regular basis. These process can even be done concurrently to speed up the process depending on available personnel. Ron, also advocates that you don’t change the tools you are accustomed to using. If you reflect on the discussions about Leader Standard Work, you will once again see the commonality of overlapping responsibility and the practice of arriving at agreement, a consensus of what is best practice. This can only be done through involvement at all levels of the organization. We will discuss this more in the Hoshin section later this month.

This is not about relinquishing control of the design process. It is about gaining more control over implementation. Collaboration does not insure the best answer gets enacted. It typically insures that something does get enacted. It takes away that paralysis from planning. No longer are we trying to gather buy-in to get something accomplished, but rather change is being driven from the bottom up with a sense of joint accountability. The best answer becomes the best implementable action. Eventually through continuous improvement a better answer will surface than was originally conceived.

Extra Material:

Chesbrough is to open innovation what Christensen is to innovation in general, and his concepts and ideas are spot on. Chesbrough is the executive director of the Haas Center for Open Innovation, rethinks the concept of open innovation to tackle a new economy.

In his new book, Open Services Innovation, Chesbrough offers the tools to apply service-focused innovation to avoid what he calls “the commodity trap.” Chesbrough explains,”Innovating in services is the escape route from the commodity trap and a solution for growth, giving firms a significant competitive advantage. As they innovate into the future, companies must think beyond their products and move outside their own four walls to innovate.”

 If you enjoy this, you may want to listen to the podcast I had with Lance Bettencourt, Service Innovation – Rethinking Customer Needs. Lance believes that true service innovation demands that you shift the focus away from the solution and back to the customer. To achieve this shift in your business–one that takes you from making educated guesses to building a clear model to guide service innovation—Lance Bettencourt instructs on the finer points of how to rethink your approach to the customer’s needs: how the customer defines value in a product or service. Lance’s book, Service Innovation: How to Go from Customer Needs to Breakthrough Services lays out a road map for developing a winning service strategy.

SDCA & PDCA Are Needed For EDCA 0

SDCA and PDCA prepare you to maximize EDCA or Design. I like to use the term EDCA learned from Graham Hill to designate the Explore aspect of Lean. I view it as more of Design Type thinking content that allows for that collaborative learning cycle with a customer.

Design and Innovation takes place outside the four walls and Lean can be the methodology of choice. It drives both the Little i and the Big I. The first and foremost reason is that it allows for the 1st step of innovation, the little i. Lean is the primary driver for the little i – PDCA. As a result, it allows for that culture to spread and create the DNA for the BIG I. Without Lean and the little i, you may never start!

 

From Tina Seelig’s book inGenius: A Crash Course on Creativity:

Below is the fully functional Innovation Engine, showing how all the parts are braided together. Innovation EngineThe inside of the engine is intertwined with the outside; and the factors on the inside and outside mirror each other. All the parts of your Innovation Engine are inexorably connected and deeply influence one another.

  • Your attitude sparks your curiosity to acquire related knowledge.
  • Your knowledge fuels your imagination, allowing you to generate innovative ideas.
  • Your imagination catalyzes the creation of stimulating habitats, leveraging the resources in your environment.
  • These habitats, along with your attitude, influence the culture in your community.

Essentially, creativity is an endless resource, initiated by your drive to tackle challenges and to seize opportunities. Anything and everything can spark your Innovation Engine —every word, every object, every decision, and every action. Creativity can be enhanced by honing your ability to observe and learn, by connecting and combining ideas, by reframing problems, and by moving beyond the first right answers. You can boost your creative output by building habitats that foster problem solving, crafting environments that support the generation of new ideas, building teams that are optimized for innovation, and contributing to a culture that encourages experimentation.

You hold the keys to your Innovation Engine and have creative genius waiting to be unleashed. By tapping into this natural resource, you have the power to overcome challenges and generate opportunities of all dimensions. Your ideas—big and small—are the critical starting point for innovations that propel us forward. Without creativity, you are trapped in a world that is not stagnant, but one that slips backwards. As such, we are each responsible for inventing the future. Turn the key.

The little “i” provided through SDCA and PDCA defined as the Lean Culture will stimulate the knowledge, imagination, and attitude to create something from nothing. You have the skills needed. Creativity, Design and Imagination are all learned practices. Your own Innovation Engine consists of:

  • SDCA: Standard Work that creates a CAN-DO attitude and free up time to spark problem solving.
  • Applying PDCA, allowing you to “see” opportunities for improvement.
  • A Continuous Improvement Culture (Kaizen) catalyzes the creation of stimulating habitats, leveraging the resources in your environment.
  • These habitats, along with your attitude, influence the culture in your community (The Customer Experience will mimic the Employee Experience).

Now that we have prepared ourselves, we can now tackle the big “I” of Innovation.

Review this Slideshow and pay particular attention to the productive section. This is a description of breakthrough improvement or EDCA.

 

The Fundamental Idea of Iteration (PDCA) is Learning 0

“The fundamental idea of iteration (PDCA) is learning. To eschew PDCA is not only arrogant; it is inefficient & often ineffective,” says Shoji Shiba author of Four Practical Revolutions in Management : Systems for Creating Unique Organizational Capability.

The Lean practice of PDCA is ideal for learning and creating knowledge activities. Following this process it allows individuals and teams to recognize and take advantage of opportunities, make decisions faster, and be more responsive to customers. As part of the PDCA cycle you get feedback on the action from listening to customers and the companies’ measurement systems. Having information, taking informed action and getting feedback is part of the natural PDCA cycle. And effectiveness comes from using and taking advantage of all your resources.

When we think of problem solving, we tend to think of a linear progression. PDCA is an iterative process. As we go around the PDCA circle, we improve our knowledge to a point that they we either continue or standardize the work. We can also view the PDCA cycle as a funnel where tighter iterations or the increase in knowledge and collaboration takes place. Repeated use of PDCA makes it possible to improve the quality of the communication, the methodology itself, and the results.

Once set in motion, this process should be an ongoing one, allowing constant interactions between the parties involved. In a learning arena, individuals expand their own knowledge through a “knowledge spiral” (Osterloh and Wubker. 1999). This process has the specific intention of fostering a collective vision among the participants. This vision can assist the development of new solutions for problems in specific subject areas – in this case, the ways in which we deal with the problems our customers are facing and our ability to adjust to new goals and objectives.

During the first stage (Plan) of the PDCA Cycle, the participants interact to appraise the customer needs and information on the subject is made available to all participants, who add it to their own knowledge and experience, and alter this in the light of the new information.

During the second stage (Do), the “influence stage”, participants make critical analysis of their own products/services in light of the new knowledge they have acquired; this broadens their understanding of each other’s needs and abilities. The aim of this stage is to make individuals receptive to new ideas and action. This is maybe the most difficult stage because you have to be receptive to each other’s views and be willing to accept a fresh understanding to solve problems in a new way.

The third stage (Check) is a more intimate stage. An explanation or demonstration of participants’ new level of understanding is essential, measurement. These results that are produced actually can be used and adapted.

The fourth stage (Act) is the act of either continuing down the spiral to another iteration of tighter focus and a more intense cycle deciding that more knowledge is required at this level. Or, that the countermeasures have been introduced and we can standardize for the present time. Think of the spiral as a continuous puzzle of interactions building an ever increasing knowledge of the defined problem for the cycle.

At the 2011 ASQ Lean and Six Sigma Conference, one of the featured speakers was Ari Weinzweig, CEO and co-founding partner of Zingerman’s in Ann Arbor, Mich. The Zingerman’s Community of Businesses (ZCoB) has annual sales approaching $40 million. ZingTrain, a consulting and training company that shares Zingerman’s approach to business with like-minded organizations from around the world, and offers a variety of management training seminars in Ann Arbor, as well as customized workshops and presentations at client sites. I wanted to share my personal experience of Zingerman’s Deli. Besides the great food and great service and catalog littered with special gifts and even more unique food, Zingerman left a special mark on a venture into the retail business that my wife and I did for six years. It was Ari’s book,Zingerman’s Guide to Giving Great Service, that provided our outline for the service that we would provide and train our staff. Below is a mind map of the initial outline that I constructed from the book and what I would call the Zingerman PDCA.

Zingerman Good Service A

 

Participation is the Platform 0

I ended my last blog post, What Happened to My Linear World, with the statement…

Reality was that the world had more influence on what I was doing, and I had less control. My planning became more frequent and less conclusive; I discovered I was no longer living in a linear world.

What should I do?

Is the answer to do less planning and more reacting? Today’s world has emerged with new thinking to compensate. Some of this thinking have been captured in the philosophies of the Outcome Based-Innovation, Design Thinking and Service Design. To a lesser degree Lean, the Maker Movement and the Lean StartupTM support this new thinking. These philosophies have taken the pulse of the present and moved decision making towards a customer-centered approach. They are more aligned with the customer and realize that their success does not rely on pushing product to a customer. Rather, understanding the customer’s “Job-To-Be-Done” and participating in what the customer needs to accomplish. This participation is the platform.

There are a lot of tools this has surfaced. Technology has greatly assisted this movement most notably with the ability to perform prototypes both online and offline. The digital world has led because of the ease of making changes based on the collection of data. However, the offline world is catching up with 3D printing and augmented reality schemes tumbling in price and expanding in use. Again, this supports participation within the platform.

The question really becomes do we still plan? With prototypes and trials so easy to use and inexpensive do we just throw out the planning and look for a reaction from the customer. Many see that as an alternative and segment out the early adaptors and willing participants. Other take it a step further and will try different trials or multiple segments to determine the best type of participation.

Escape from loop

A new set of tools have evolved to support this culture, no longer are we using linear tools that were used to measure and support well-defined end to end processes. Today’s world has introduced more and more uncertainty. As a result, it has forced us to get closer and closer to our customers reducing reaction and decision time. To do this, once again a new set of tools need to be utilized. This methodology has been introduced to us through the concepts of Design Thinking and as good as an overview that I have found is contained in the book, Designing for Growth: A Design Thinking Toolkit for Managers (Columbia Business School Publishing)clip_image001.

This set of tools:

  1. Visualization: using imagery to envision possible future conditions
  2. Journey Mapping: assessing the existing experience through the customer’s eyes
  3. Value Chain Analysis: assessing the current value chain that supports the customer’s journey
  4. Mind Mapping: generating insights from exploration activities and using those to create design criteria
  5. Brainstorming: generating new alternatives to the existing business model
  6. Concept Development: assembling innovative elements into a coherent alternative solution that can be explored and evaluated
  7. Assumption Testing: isolating and testing the key assumptions that will drive success or failure of a concept
  8. Rapid Prototyping: expressing a new concept in a tangible form for exploration, testing, and refinement
  9. Customer Co-Creation: enrolling customers to participate in creating the solution that best meets their needs
  10. Learning Launch: creating an affordable experiment that lets customers experience the new solution over an extended period of time, so you can test key assumptions with market data

Along with these basic tools, I believe that Osterwalder’s Business Model Generationclip_image001[1] Template, Lean 3P, and Kanban are other integral parts. If you notice, these are all very visual tools based on participation in the platform, not in the corner office.

However, do I just use these tools and watch everything unfold?

Is there a planning instrument that works?

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