Lean Startup

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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Building Habit Forming Products 0

Nir Eyal distilled years of research, consulting and practical experience to write Hooked: A Guide to Building Habit-Forming Products. He founded and sold two technology companies and taught at the Stanford Graduate School of Business and Hasso Plattner Institute of Design. His writing appears in the HBR, The Atlantic, TechCrunch, and Psychology Today.

An excerpt from the podcast:

Joe Dager: How does this blend with Lean startup?

Nir Eyal: That’s a great question. I’m a big fan of Lean StartupTM, and I think that what I seek to do in my processes is to help makers overcome what I struggled with. That was one of the three phases of the Lean Startup, the three steps as proposed by Eric Ries, of build, measure, learn, the hardest phase, the place where all the blood, sweat, tears, and of course all the money went, was the building phase. That’s the hard part. So my work really fits hand and glove because it seeks to help product makers identify what they should build. A few years ago what we should build was determined by the highest paid person in the room. If you’re really progressive today, you’ve heard the Lean Startup methodology, and you listen to customers – the customer development and hearing what customers want.

I think there is actually a deeper layer. There are things that people want that they’re not able to articulate and yet predictably will guide their behavior even if it they can’t tell you they want it. I believe by looking at consumer psychology, by looking at these tenants, these design patterns of habit-forming products, we can build the right thing sooner. We can reduce waste by informing which of our many features we build. The entire point of the hook model is to plug in to the build, measure, learn methodology. To have a little bit of a framework, to have these four steps to ask yourself if your product requires habits, does it have these four steps and how can you brainstorm new features based on where you might be lacking. So the book is really meant to be super practical. I give these, “Here’s what you do.” I call these little sections at the end of each chapter, “Do this now,” to help product makers literally with the next step. It’s all about creating ideas for new features. What else can do to your product to make it more habit-forming? But it all still fits into the Lean Startup methodology of building, measure, learn.

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Do We Know How to Learn from Customers? 0

Any reader of the Business901 blog or twitter followers for any length of time has heard words echoing in this space such as…

“The only competitive advantage you have is the rate at which you learn from your customers.”

“Positioning your organization in your customer’s playground is the most important role marketing has.”

Along with discussions about Service Dominant Logic (SD-Logic) and their core foundational premises:

FP-1. Service is the fundamental basis of exchange.

FP-6. The customer is always a co-creator of value.

FP-9. All social and economic actors are resource integrators.

FP-10. Value is always uniquely, and phenomenological determined by the beneficiary.

The entire list of 10 Foundational Principals can be found here: Service Dominant Logic.

In the blog post, Are you Marketing Consumption or Participation:

Take away all the fluff in sales and marketing today, and I believe the single most important aspect that will determine your long term success and sustainability in the marketplace is your role in participating in your customer’s playground.

When I say this, most people think of experimentation, prototyping or even call it a specific playground term like sandboxing. These are necessary functions and on the road to customer development but are they on the road to vendor development? Are we really viewing things from the customer’s viewpoint? How a customer views a vendor?

I believe a few of the components that makes Lean Sales and Marketing so special are:

  1. A training system on how to define knowledge gaps and close them.
  2. Different perspective on knowledge transfer. It is not the perspective of educating the customer; it is from the perspective of learning from the customer, understanding how your customer uses and benefits from your product or service.
  3. Leave your customer be the professor, the Sensei, who will take you through a certain number of exercises (their decision making steps), the customer leads.

LearningI use Lean to build knowledge versus a way to reduce waste; an appreciative way or strength building application of Lean. Most organizations still believe efficiencies and effectiveness can drive demand. It is that process thinking mentality that took place when supply exceeded demand. Now, the tables have turned, Service Design, Design Thinking, and the Lean Startup are becoming more prevalent because we lacked processes to build knowledge companies. The most value I have taken from the Lean Startup movement is its systematic way of learning from the customer. However, we still struggle with this basic concept because we don’t understand the basics of what it takes to learn from the customer. We are still taught to manipulate, guide and show our expertise, but few of us are ever shown how to learn from the customer.

In Novak’s book,Learning, Creating, and Using Knowledge: Concept Maps as Facilitative Tools in Schools and Corporations, he discusses six basic principles for learning that must occur. When you read these, think of your organization and yourself in the role of the learner, not the customer.

  1. There must be motivation to learn. No learning will take place unless the learner chooses to learn.
  2. We must understand and engage the learner’s existing relevant knowledge, both valid and invalid ideas.
  3. We must organize the conceptual knowledge we want to teach.
  4. Learning takes place in a context, and we must consider what will be a facilitative context for educating.
  5. Learning can be aided by a teacher who is knowledgeable and sensitive to the learner’s ideas and feelings.
  6. Evaluation is necessary to assess progress and further motivate the learner.

When our customer becomes our Sensei (Teacher), I envision these principles in this frame:

  1. The vendor must be motivated to learn. No learning will take place unless the vendor chooses to learn (We have to want to learn from our customer).
  2. The Vendor must be willing to understand and engage the customer’s existing relevant knowledge, both valid and invalid ideas (We cannot pre-determine the value of knowledge).
  3. The Vendor must organize the conceptual knowledge they want to learn (We must seek patterns and people within customer’s organization that are learning centers).
  4. Learning takes place in a context and the vendor must consider what will be a facilitative context for learning (Do we construct context that we can learn from rather than tell).
  5. Learning can be aided by a vendor who is knowledgeable and sensitive to the customer’s ideas and feelings (This can be said both ways.).
  6. Evaluation is necessary to assess progress and further motivate the customer to teach (Are we learning enough, quick enough?).

Is our sales and marketing team prepared for a journey of this type? Are organizations prepared?

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Are Outcomes and Impacts old news? 0

Is Outcome-Based Planning being passed by Design Thinking, Lean Startup(TM), and the other Innovation chatter that we see? This focus is certainly deserving and a necessary component in today’s marketplace. Where the strength of an Outcome approach takes place is in understanding your customers, markets and most of all the people that you influence. Outcome-Based planning is a compilation of your Target, Influential, and one to one marketing all combined and on steroids.

Outcome-Based Planning does not focus on traditional approaches such as problem solving, activity, process or vision. It focuses on the behaviors and what is important to your partners and customers. Rather than finding a product/market fit, we try to find a market/product fit.

I see a lot of talk about co-creation, open innovation, community, etc. but I see little in the way of programs on how we might create and improve on this type of relationship or cooperation. If anyone thinks managing a sales pipeline or a marketing funnel will create community, I believe needs to re-think their thoughts. Any type of manipulation in the long run will stunt any type of a co-created platform.

I happen to be a big proponent of understanding your own capabilities and working from your strengths, see my musing in the Lean Scale-Up. This leads to a different way of engagement. Though I am not the best at it, I find myself slipping all the time, I think a strength-based approach is the new and a better method over the traditional problem-solving approach.

Another area that we see emphasized a great deal is change management. It is a large part of the strength of Lean. At the heart of Lean is Kaizen or continuous improvement (change). Lean offers us a business process to accomplish this on a company wide basis.

These four components, cooperation, capabilities, change, and strength-based, are supported well by an outcome-based approach. However, we are not viewing these components from an internal view, rather from a view of how our customers and ourselves must behave and interact to accomplish.

When we use the traditional thinking processes mentioned above, we view the customer being driven by our actions. We think of the customer in a static position and seldom address their evolving structure, and the unsettledness that are initiatives my create. We think of what they want to accomplish, mostly from a functional perspective. Do we ask questions that may be termed as Sensemaking? Questions like:

  1. In what ways can this decision be difficult?
  2. How much time and effort is made into making this decision?
  3. How do you assess the situation or broader context of the decision?
  4. What are you already doing well or current expertise that this decision affects?

As you can see, the flow of What’s and How’s versus the drilling down of Why? Why is for solution finding. What’s and How’s are for empathetic search and discovery. As we explore empathetically the Behavior, Attitudes, Conditions, Knowledge, and Status (BACKS) associated with people and the organization surfaces.

In Outcome Based Planning, BACKS is what we measure and monitor. This is how we create a Service Dominant Thinking environment. At the heart of Outcome-Based Planning is not the process of creating the model. That is transactional, GD-Logic thinking. Instead, it is the on-going evaluation of the model that is the driver as we attempt create a co-created value proposition, Service Dominant Logic (SD-Logic). More about that in a later blog post.

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 Book references:
Outcome Mapping: Building Learning and Reflection into Development Programs
The Nonprofit Outcomes Toolbox: A Complete Guide to Program Effectiveness, Performance Measurement, and Results

Increase your Innovation Capacity: Manage your Sphere of Influence 4

In an Outcome-Based mapping approach, we do not try to reach out immediately to the beneficiaries or all the people/organizations that may have an interest in our product or service. We reach out to people/organizations that we can influence. This is quite different from the Lean StartupTM approach where we are trying to find product/market fit and reach audience. It is also different from the typical idea of finding the ideal client or target market. This is about sitting back and viewing people that we can influence in the short-term, medium-term and long term.

I contend that the typical tools such as marketing funnels, customer journeys or sales cycles limits us to Goods-dominant logic (GD-logic) thinking and prevents us from viewing from the perspective of Service Dominant Logic (SD-Logic). If that is not a big enough picture, it is what separates commoditized products/services from building an eco-system and platforms such as Starbucks, Amazon or Apple.

Amazon and Apple have both concentrated on their core and their core capabilities within their sphere of influence to increase market share and introduce products. My views of developing from core capabilities are highlighted in the Lean Scale-Up Outline. This view does not say; we don’t innovate and create new capabilities. It simply states that we do this from developing a shared understanding and co-creating with our markets. Influence

When we concentrate on people/organizations that we have the ability to influence, we understand new and old marketing cycles better. We are close to them so that we can understand, ask, experiment and see what obstacles are present. We look for what behavior change we need to create (short-term, medium-term and long term outcomes) to drive the desired impacts in the end beneficiaries of our product/service.

When viewing from a GD-Logic, we look at how to steer someone down a path to purchase. Even if we accomplish this, we have difficult developing long term customers that will not change when offered a better solution. The solution is the value. This leads to the most “agile” company that can adapt quickly to the market place an advantage.

In SD-Logic thinking, value creation is interactional. This allows our sphere of influence to grow because our customers are participating in the creation of value. As our influence and ability to co-create with our customers increases, our sphere of influence becomes a resource for value creation. Value creation happens as a result of our network. If we try to co-create directly with beneficiaries, without those being in our sphere influence, we will fail miserably. Our innovative capacity is increased because we are not looking in the marketplace for solutions rather we are participating in the marketplace and are part of the solution.

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The Maker Movement 0

TechShop, a do-it-yourself workshop and fabrication studio with six locations open and hundreds more planned over the next decade, is the largest public access tools and computer enabled manufacturing platform in the world.  Mark Hatch recently authored The Maker Movement Manifesto: Rules for Innovation in the New World of Crafters, Hackers, and Tinkerers to capture his learnings and I do not believe you will be disappointed in the book or the podcast. Recently, The San Francisco Business Times presented Mark with a “Bay Area’s Most Admired CEO Award.” Fast Company has recognized him in its “Who’s Next” column, and TechShop received the EXPY Award, given to the “experience stager of the year.”

Transcription and PDF Download

Mark Hatch-Maker

Transcription and PDF Download

Mark recently authored The Maker Movement Manifesto: Rules for Innovation in the New World of Crafters, Hackers, and Tinkerers.

Related Podcast: Mark Hatch on The Maker Manifesto

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Lean Offers a Variety of Choices to drive a Nail 1

If we review just a few of the different Lean venues of Lean Six Sigma, Lean Startup, Lean Manufacturing, Lean Healthcare, Lean Software and that upstart of Lean Marketing, it seems once there is a methodology that works we all piggy back on the term to create some foundation for us to tweak and create an opportunity for ourselves. Which is a good thing; it expands the foundational base of the method by bringing new life through new ideas and structure. It is a compliment to the brand, let’s say. It creates Growth. Traditionalists may argue, which is a good thing too, because it reinforces those foundations that make the methodology strong in the first place.

When thinking how Lean has proliferated through industry after industry, we owe a great deal of this credit to the Toyota Production System and Dr. Edwards Deming. However, Lean was originally coined by a MIT Group studying several Japanese motor companies, not just Toyota and Dr. Deming provided little directly to the promotion of Lean itself. I find studying the practices of Komatsu and Honda, for example, very insightful. Examples Such as Four-Fields Mapping and Lean 3P being the ones that cross my mind.

When we look at actual methodologies, such as Lean versus Six Sigma or Lean Six Sigma, we make a comparison how Lean is not limited to a process; it is a way of doing business. When we compare Lean to Systems Thinking, we arguably could say that Systems Thinking is a way of Thinking and not operationally orientated. If you buy into Lean, it has seemed to develop as the best of both worlds.

I wrote a blog post a few months back, The Dead Language of Systems Thinking, in it I said

In summary, I believe that all systems are very similar. The differences from DMAIC to PDCA to Casual Loops are not all that different. The difference is the path we take to get there and the people we align ourselves with to accomplish it. It is a shame we spend so much time bashing the other methods. Lean happens to be a popular business model at this time. For Systems Thinkers to say that it is a tool box, it appears to me that they are internalized in their own thinking. They even cited ASQ as adding Systems Thinking to the Lean body of knowledge. What they failed to realize, it was being added to the Lean body of knowledge, not the other way around.

I left thinking that Systems Thinking may be a dead language. It is seldom spoken in business and only a few study it.  It may be the basis and important part of how we must view things, but it has been swallowed up in the dialect of other methodologies. It reminds me of the Latin language. Latin is an important part of most Mediterranean languages, but it is not spoken. Its usefulness has passed.Hammer and nail

I hope that the foundational roots of Lean, which I believe to be PDCA/Kaizen, remains strong and does not fall the way of Systems Thinking or swallowed up by one of the subsets. Lean is a sound business model with a toolbox that includes much more than a hammer.  Using the Jobs to be Done metaphor what we are looking for is a driven nail,  the outcome. Lean gives us that flexibility to choose how to drive the nail.

P.S. We all know the concept known as the law of the instrument or Maslow’s hammer; “If the only tool you have is a hammer, to treat everything as if it were a nail”.

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