The Lean Management Journal caught up with Joanne Molesky and Barry O’Reilly the authors of Lean Enterprise: How High Performance Organisations Scale Up.
We picked their brains about how lean applies to start ups and the possible problems of over reliance on technology.
- What do you think the most important aspects of a lean startup are? [JOANNE]
Most ideas are not great ideas. In fact very few startups actually succeed. The key question for lean startups to ask themselves is not “can we build it, but should we build it?”
Teams that embrace lean startup principles foster a culture of experimentation and learning that is supported by collecting data from real customers by continuously testing their proposition using minimal viable products (MVP) to find out what works, and what doesn’t. Eric Ries describes a MVP as “that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.” That means not necessarily creating software products to test your ideas. A test can be a simple as talking to your customers and getting their feedback and insight.
It is critical for lean startups to identify a business model hypothesis then create a test using a MVP to gain knowledge by validating ideas through experimentation, improving value to customers. Without this foundation for learning, success is more likely to be achieved through luck than investment in hard work.
- What tips would you give to innovators and entrepreneurs interested in improvement? [BARRY]
The first step is to create meaning for the people in your organisation. Everyone must understand the overall mission and goals we want to achieve (or whatever you prefer to call them). From there, listen to the people working with you. Give them the autonomy to make decisions which help them achieve these goals. To make this work, you need to create an environment where everyone feels safe to bring everything they are to work, empowering them to make decisions AND take responsibility for the outcomes; you need a strong sense of compassion and empathy for both your employees and customers.
As organisations grow, it is sometimes hard to maintain the culture that fosters further innovation. They often lose their sense of purpose and customer value in favor of rigid processes and structure designed to deliver shareholder value. Don’t fall into that trap, as it is a short term play and actively discourages your people from being creative and responsible.
Once you are on a path to success, get and keep your technology straightened out so you can collect more data on which to make decisions on what is a good, or not so good, idea. The ability to adapt quickly is reliant on technical capabilities – E.g. DevOps, continuous delivery, simplification and reducing technical debt.
Lastly, manage your portfolio wisely. Don’t be satisfied with the status quo, even if you are making buckets of money from it. Always look for the next thing to replace your current products and learn when to stop adding features and disrupt your own business with new innovative ideas and products.
- Are there any challenges you see coming to the future of innovators? [JOANNE]
Privacy, security and regulatory compliance will become increasingly demanding on how products are built and information is collected and processed. For example some States in the USA are considering passing laws that make consumer buying habits private information. This will affect the way information can be collected, stored and utilised by retailers and marketers.
Existing laws and regulations may also interfere with the use of products in certain locations. Uber is currently facing backlash and has been banned from different political domains due to existing regulations that control public transportation options. AirBnB also faced similar challenges in New York City. However it can be viewed that their success was driven by their willingness to test the boundaries of those laws and regulations in themselves.
As established organisations with political connections increasingly feel threatened by innovative products and services, they bring out laws and regulations as a way of preventing market penetration by new innovative alternatives.
- Do you see any problems emerging from possible over reliance of technology and niche startups? [BARRY]
When you rely heavily on technology, it is easy to forget that it is people driving the need and use of technology. As technology advances, the possibilities of using it seem to grow exponentially. It is easy to get bedazzled by technology and build new products just because we can. It is important to always consider why we are building it and what outcomes do we expect to achieve?
Another problem in over reliance on technology is in using it to eliminate work without creating meaningful alternatives for people. As we follow this path, the world becomes increasingly polarised in wealth and values between the haves and have nots. The resulting conflicts may be our undoing. It would be more beneficial to see more use of technology to make lives better, such as providing affordable medical care, creating self-sustaining micro-economies and safer, affordable places for people to live. Be My Eyes provides blind people with greater mobility, Uber provides jobs for drivers, KIVA provides loans so people can run businesses to provide work for themselves and their families.
- What are you hoping people learn from the book? [JOANNE]
If nothing else, we hope the readers will start to think differently about the way we manage the use of technology within organisations and realise that learning to adapt is key to success in business and indeed life itself. We can’t plan away uncertainty. We need to stop trying to control all aspects of the way people work and allow them to make decisions and take responsibility for the outcomes of their work.