Six Ways to Prompt Lean Innovation
The 2019 Lean Startup Summit in Europe’s tech heart of Berlin offered the mental armor necessary for grappling with VUCA, a militaristic term referring to a combined state of Volatility, Uncertainty, Complexity, and Ambiguity. This status directly affects our work world, economy, psyches, and it demands a different way of doing business and building teams. But navigating VUCA circumstances generates opportunities to support innovative projects, which require new ways of thinking — using both qualitative and quantitative approaches.
Mitigating VUCA with a Lean Approach: 6 Topics
Whether you are building a startup from the ground up, or innovating your corporation to compete, acquire, or innovate with said startup, you already inhabit the VUCA world. Welcome! As such, it makes sense to deeply consider how you conduct business, treat teams, and build products.
The VUCA world can be best sorted using a ‘lean’ approach. In this post, you’ll find an overview of learnings from a power-packed day delivered via panels, keynotes, and workshops at the Lean Startup Summit in Berlin. This Summit connects experts, authors, founders, intrapreneurs, and C-levels who are part of a global innovation movement, spawned from the paradigm of Eric Ries’ book The Lean Startup, to share transformation methods and best practices.
In this recap, you’ll discover Summit insights across six sections:
I. Product development
II. Innovation strategies
III. Business model planning
IV. Cultural entrepreneurship
V. Lateral Leadership
VI. Failure Archetypes
I. Product Rules to Live By
- Talk to Customers: Find pain-points, solve them, get to market, and grow.
- Don’t stop testing: Look through the whole discovery loop; test and retest solutions.
- Don’t fool yourself: Use a scientific method to avoid a situation in which you realize: “What we made is great! But the customers find little value there.”
- Share learnings during sprints; create a demo that shows the product discovery timeline.
II. Innovation is a Puzzling & ‘Wicked’ Problem
Tendayi Viki from Strategyzer gave a captivating talk on how to actually innovate. He says there is no right solution, there’s only what works and what doesn’t. He suggests:
- Apply the ‘No stop rule”: For example, if you proceed in a traditionally linear fashion: Idea → Product-Solution Fit → Product-Market Fit → Scale, then you still need to continually superimpose the repeating loop of Design & Test onto that model.
- Look for the Riskiest Assumption: Try this approach as opposed to the idea of ‘start with the problem.’ Be honest and curious with what you find.
When trying to innovate, Tendayi says we don’t necessarily start with a picture of an assembled puzzle, and therefore know precisely where we are headed. We may have puzzle pieces that don’t match, or the puzzle changes! This makes it exceedingly difficult to solve.
He recommends moving the puzzle pieces around in a Business Model Canvas. He says the job of innovation leaders is to ask the right questions at the right time (RQRT), for example:
- Feasibility: Can we build it?
- Desirability: Do people want it?
- Viability: Can we generate value?
- Adaptability: Are we able to respond to change?
III. Study Business Model Mechanics
In his keynote, CEO of Strategyzer, Alexander Osterwalder, added that Roger Martin from the University of Toronto’s Rotman School of Business, says ‘business experts must be designers’ in order to tap into new markets. (Think of the Nintendo Wii’s success).
Alexander encouraged thinking about business from the customer perspective and from the resource side, citing IKEA as the incredible success story of “let other people do the (assembly) work!” He raised the idea of innovation beyond the product, citing Über. He suggests considering how you can innovate from the financial side to generate more value at less cost.
To look at business through a prism of customer, resource and financial angles, he shared a handout with seven questions to assess your business model design. He stressed that if you consider existing mechanisms, you can build a great business model with better financial benefits and performance factors.
IV. Build a Culture of Entrepreneurship
A panel on entrepreneurship moderated by Ralf Westbrooke,p covered how best to navigate your organization towards a culture of so-called “Unternehmengeist,” or entrepreneurial spirit.
Team Building: Despite modern workplaces of different languages, the aim is still to have a unified culture and language. Consider cultural trainings to encourage broader understanding amongst diverse teams. Consider bringing people together from different teams to further the organizational goals.
Provide clear communication: Don’t expect everyone to understand the problems. Avoid acronyms which might lead to misinterpretation. Your mission and vision are key and must be understandably related.
Align the team: Have a clear product vision and communicate that across the team. Can everyone on the team answer: “what are we building towards; where are we trying to go?”
Empathize First: Consider the middle manager and what they are struggling with. Frame things as what outcome the innovation is striving for, so the manager can get on board. Help prioritize priorities! Educate board members to ask the right questions too, for example, there may not yet be a business case, but the experiment might still be worth pursuing.
Understand the middle manager’s conundrum: They’re rewarded for maintaining current results from efficiency KPIs, but innovation KPIs differ. Sometimes a consultancy can come in and shake things up in order to shift towards a new model of ‘Build, Learn, Measure’. The goal is to create an environment that encourages Adaptability, Determination, and Permission. Ask yourself: are these goals reflected in your organization’s management? Middle managers can be involved and convinced but you need to change the measurement, reward, and criteria for innovation.
Empower your team: Everyone needs to work towards a vision together. Agree on what you define as success. Make clear what criteria is needed for a new scope of work. Ask the tough question of yourself: do you need to change people if you change to an innovation approach?
Walk the Talk: Don’t just generate ideas; take time to experiment. Give teams the leeway and time to experiment. Consider flex hours, hackathons, and actual work time to develop ideas.
If you are seeking to rethink how organizations can be structured, check out this influential read on what it takes to reinvent them.
V. Develop Lateral Leadership
The notion of lateral leadership was the focus of a complete workshop and the topic of a new book, which presents an interesting tool called the Agile Team Canvas. Lateral leadership means influencing people without formal authority. This turns out to matter a lot in less-hierarchical environments, for example in Agile and software development. The underlying idea is that people are more important than processes. Cross-functional teams still need this kind of leadership but it tends not to be taught. Offering leadership training can be a useful starting point.
Lateral leadership occupies the overlap between alignment and empathy. Recall the topic of alignment from exploring cultural entrepreneurship: alignment refers to a shared understanding of what needs to happen. Ask yourself, what it is needed to create enough autonomy for my team to thrive and deliver? Co-Founder of Lean Startup Company, Heather McGough, is a big proponent of using empathy, as mentioned in an interview during the Summit.
VI. Analyze Failure Archetypes
- Create a failure-positive culture: Leaders need to make it safe to fail at a small scale
- Analyze and categorize failures: E.g. Are you a startup junkie who is addicted to your project and doesn’t know when to quit? This can be confusing territory because of the pull between perseverance and despair. Maybe you’re a recovering executive who works 17 hours a day and must repeat the same mistakes before learning lessons.
- Value Introspection: Reflect on your value, purpose, and boundaries. In other words, know thyself.
- Adjust Communication: Adapt your language to ask: “What is the problem I can help you solve?” Create feedback loops. Consider reporting vs. storytelling. Try a roundtable approach.
- Look ahead: Ask what will we be doing in 5-years time on a human level to improve?
Another good suggestion was to make more use of Mentorship Opportunities: Try these startup methods that are action-based:
- Organizational Change: Try running events to share learnings
- Practical Practices: Build learning environments to bring reflection into daily work; share stories and analyze them at a higher level; tell those stories first-hand and with passion.
- Personal Journey: Share the aha-moments and shift your passion to impact, like addressing real-world issue, for example, the refugee crisis.
Wrapping up the Day
A live video with the Godfather of Lean Startup, Eric Ries, capped the day through a very human interaction with attendees. What stood out were two things Eric said:
- Innovation Accounting: Everyone wants to know: you spent money, what did you get? But you need to consider what metrics are used to evaluate progress. What can you then measure to actually gauge progress?
- Try a grassroots approach: Talk to executives after you’ve done some experiments. Speak from experience saying, ”I’m passionate about this. I’ve done this at scale x, now I’d love your permission to do this at 2x or 4x.”
It takes bravery to do all these things — to change the way we are accountable for innovation and to experiment and even to ask for permission to continue. This summit stoked that fire.