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Move fast & fix things

🔵 Käsillä on menetelmäopas, jolla luvataan ”viikossa” ratkaisuja. Kukaan ei sano “I wish I had taken longer and done less”, ja sen takia pitää olla menetelmä, jolla viikossa saa asiat uudelle uralle. Kohderyhmänä on johdon kehittäminen sekä organisaation kulttuurin muuttaminen.

🟢 Kirjan tavoite on tarjota nopea ja hauska muutosjohtamisen työkalu. Se toimii oppaana vaikeiden ongelmien ratkaisemiseen sekä muutoksen kiihdyttämiseen. Tavoite on ratkaista ongelma viikossa. Menetelmä on sukua kasvuhakkeroinnin tilannehuoneelle.

🟢 Keskeiset pääviestit:

– Kuinka hyvin organisaatio huolehtii sidosryhmistään, niin nopeasti organisaatio pystyy muuttumaan ja mukautumaan uusiin tilanteisiin.

– Luottamus on kulttuurin perusta, ja nopeus on avain muutokseen.

– Organisaation menestys riippuu vastuullisuudesta ja nopeudesta.

– Vauhti ja vastuullisuus ovat keskeisiä menestyksen tekijöitä organisaatiolle.

🟢 Kirjoittajalla on mielessä neljä organisaatiotyyppiä, joiden muutosjohtamiseen työkalu sopii. Organisaatiotyypit ovat: Vääjäämätön taantuminen, Kiihdyttävä erinomaistaja, Rempseä häirikkö, Vastuullinen isännöitsijä.

1) Kiihdyttävä erinomaistaja (Accelerating Excellence) kuvaa organisaatioita, joissa on luova kulttuuri ja tuloksellisuus tasapainossa. Ne ovat erittäin vastuullisia sidosryhmiään kohtaan ja tuottavat maksimaalisesti arvoa. Nämä johtavat lopulta organisaation menestykseen.

2) Vääjäämätön taantuminen (Inevitable Decline) kuvaa organisaatioita, jotka eivät huolehdi sidosryhmistään. Ne eivät luo arvoa sidosryhmilleen ja menettävät niiden luottamuksen. Tämä johtaa lopulta organisaation tuhoon.

3) Rempseä häirikkö (Reckless Disruption) kuvaa organisaatioita, jotka ovat liian nopeita muuttumaan ja kovia innovoimaan, mutta ovat heikkoja synnyttämään luottamusta. Ne eivät kykene ennakoimaan muutoksia ja tekevät virheitä. Tämä johtaa lopulta organisaation epäonnistumiseen.

4) Vastuullinen isännöitsijä (Responsible Stewardship) kuvaa organisaatioita, jotka ovat kiinni menneessä. Ne luottavat konsensukseen päätöksenteossa ja työntekijät ovat mukavoituneet. Tämä johtaa lopulta organisaation taantumaan.

🟢 Kirjan tarkoitus on toimia menetelmäoppaana nopeaan ongelmien ratkaisuun ja muutoksen aikaansaamiseen organisaatiossa. Tarkoituksena on vauhdittaa muutosta yhdistämällä nopeus ja luottamus.

🟢 Playbook tarjoaa järjestelmällisen viikkokalenterin vaikeiden ongelmien ratkaisuun:

– Maanantaina sovitaan, mikä on ongelma, joka ratkaistaan perjantaihin mennessä.

– Tiistaina päätetään, mitä tai kenen luottamus tarvitaan, jotta ongelma on ratkaistu perjantaihin mennessä.

– Keskiviikkona sitoutetaan avainpelaajat.

– Torstaina tehdään narratiivi/tarina, joka kertoo, miten ongelma ratkaistaan ja miten asiat ovat paremmin, kun muutos on saatu aikaiseksi.

– Perjantaina ei rikota asioita, mutta ajetaan suunnitelmaa ylinopeudella organisaatioon.

– Muuttuuko organisaation kulttuuri tai johtaminen viikossa riippuu ongelmasta, mutta ainakin on olemassa suunnitelma, miten eteenpäin.

🟢 Vinkkejä muutosjohtamiseen:

– Marcel Proustin kysymysten avulla saa muutoskeskusteluihin rungon. Muokkaamalla niitä omaan tilanteeseen sopivaksi saa yhtenäisen tavan käydä keskusteluja.

– Jan Carlzonin ja SAS:n muutosjohtaminen on tämän tarinan pohjalla, sen ymmärtäminen auttaa nopeuden merkitystä.

– Asenne: Kirjoittaja ehdottaa, että työssä omaksutaan antropologin ja johtajan asenne. ”The curiosity of an anthropologist and the accountability of a leader.”

🔴 Kuusi sanaa: “What is the trait you most deplore in yourself?” – Marcel Proust

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Joyce Nilsson Orsini: The Essential Deming

Kirjasta

W. Edward Demingiä pidetään laatuajattelun kanta-isänä. Hän yhdistää tilastotieteellisen ajattelun omiin johtamis-menetelmiin. Oikeasti Deming oli aikansa punk-rokkari ja kasvuhakkeri.

Halusin lukea hänen kirjan, koska hänen ajatteluunsa viitataan usein. Kirjaan oli koottu Demingin näkemyksiä kirjeistä ja luennoista. Lukijan kannalta se oli hankala valinta, koska esimerkiksi kirjeiden sisältö oli kirurgin tarkka leikkaus tiettyyn aiheeseen.

Minkälainen kirja oli?

”The greater the productivity, the better the economic lot of everybody. This is a simple principle and it is learned in Japan at an early age” lause kertoo kaiken kirjasta. Demingin kirja on yhtälö hänen laatuajattelun sekä hänen kokemuksiaan Japanin loikasta teollistuneiden maiden kärkisijoille. 

Pakko silti myöntää – kirja oli sekava. Demingin ajattelun erinomaisuus kompensoi sekavuutta.

Mitkä ovat kirjan keskeiset ideat? 

Demingin salaisuus on uskollisissa asiakkaista. Hänen mukaan voitto ja kasvu tulee asiakkaista, jotka “kehuvat” yrityksen tuotteita.

”Satisfied customers are not the answer. A satisfied customer may switch. Profit and merit come from loyal customers. A loyal customer waits in line and brings a friend with him.”

Toiseksi Demingin mukaan kaikenlaiset meriittijärjestelmät tuhoavat yrityksen. Kiintiöt, bonukset, yksittäiset tavoitteet jne ovat tuhon alku. Hänen mukaansa ainoastaan parempi johtajuus on mitä yritykset tarvitsevat.

Laadunparannuksella voidaan aikaan saada kykyä investoida kasvuun. Sitä voisi kutsua Demingin kolmioksi – “Quality is improved in three ways:

1. Through innovation in design of a product or service,

2. Through innovation in processes, and

3. Through improvement of existing processes.”

Huono johtaminen

Huono johtaminen on Demingin kirjassa jatkuvasti esillä. Hänellä on loputtoman oloinen lista johdon virheistä – The wrong style of management:

• Management of failure (too late). It is better to work on the causes of failure. Failures are not causes; they come from causes.

• Tampering with a stable system. For example, track down anything that goes wrong with a product or service. This policy does not improve the system. It is tampering, worsening the problem.

• Compile a list or chart to show percentages right or percentages of product or service that went wrong last month.

• Annual appraisal of performance, the so-called merit system – a destroyer of people. • Annual rating of divisions. (A manager of a division is rewarded on the basis of this rating.) • Campaign to reduce costs—as if costs were causes. • Incentive pay, commissions and bonuses.

• Top management failing to understand their responsibility for quality, for innovation of product and processes and for improvement of processes. Quality starts in the boardroom.

• Short-term planning and quick profit.

• Churning money.

• Competition without cooperation. Getting a bigger slice of the pie, but not making the pie bigger.

• Doing business by price tag.

• Short-term contracts.

• Management by objectives (MBO) or management by the numbers.

• Investment in gadgets, computers, automation and new machinery without guidance of profound knowledge.

• Posters and slogans for the workforce.

• Work standards—quotas. They double the cost of production, rob people of pride of workmanship and are a barrier to improvement.

Esimerkki hän sanoo, että: “Our people in the plants are responsible for their own product and quality. We expect them to act like owners.”

Johtamisparadoksi

Toinen hyvä johtamisparadoksi on, että numeraalinen tavoite ilman menetelmää on huonoa johtamista…. ”The worst example of numerical goals came out of our own Department of Education. Numerical goals. No method. No method suggested. Just numerical goals drawn out of the sky. Such nonsense in high places.”

Dmingin polku

Demingin tekstistä on helppo keksiä erilaisia loogisia ajattelukulkuja. Esimerkiksi Demingin polku tai enemmänkin ketjureaktio on seuraavanlainen:

Improve quality → Costs decrease because of less rework, fewer mistakes, fewer delays, snags; better use of machine-time and materials → Productivity Improves → Capture the market with better quality and lower price → Stay in business → Provide jobs and more jobs.

14 kohtaa

Demingin liikkeenjohdon teoria perustuu seuraavaan 14 kohtaan:

Point 1

Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.

Point 2

A new theorem: I’m afraid that it’s new in a lot of American industry. Dependability of service is an important quality characteristic. Reliable service reduces cost. Delays and mistakes raise cost.

Point 3

Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.

Point 4

End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust. ….. One company that I work with is reducing their number of vendors from 4,000 to 800, and they are allowing themselves five years. (Toimittajan vaihtaminen maksaa liikaa….)

Point 5

Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.

Point 6

Institute training on the job. Use effective methods by which you can improve the system. People are part of the system. Management could improve the system by making it possible for people to understand better what is acceptable and what is not.

Point 7

Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production-workers.

Point 8

Drive out fear, so that everyone may work effectively for the company.

Point 9 <= siilojen murtaminen / tear dow the pyramid

Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.

Point 10

Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.

Point 11

(a) Eliminate work standards (quotas) on the factory floor. Substitute leadership.

(b) Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.

Point 12

(a) Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.

(b) Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective.

Point 13

Institute a vigorous program of education and self-improvement.

Point 14

Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.

Teoria

Demingin teorian 14 kohtaa tuli hänen kokemuksistaan. ”The 14 points of management” -perustuu neljään tekijään:

–      Variaatioon, jota Deming muuten fanitti pitkin tekstiään.

–      Systeemiajatteluun, koska johtaminen on systeemien johtamista.

–      Tiedolla johtamiseen, ei mutu-tietoon.

–      Psykologiaan, koska se auttaa ymmärtämään ihmisiä.

Milloin Demingin teoria tuottaa tuloksia:

• Pikavoittoja on tiedossa kun työlle saadaan määriteltyä standardeja (No. 11).

• Keskipitkän aikavälin voittoja on saatavilla jos pelko onnistutaan poistamaan organisaatiosta (No. 8)

• Pitkäkestoiset voitot saavutetaan kun siilot murtuvat (No. 9), mutta sen jälkeen voittoja on vaikea estää Demingin mukaan.

Mutta onko yrityksillä varaa Demingin ajatuksiin? Koska tuloksia hän ennustaa syntyvän 5-10 vuoden kuluessa. ”Unmistakable advances will be obvious within 5 years, more in 10.”

Hyvät uutiset

Hyvät uutiset sen sijaan on, että työn ilo voidaan aikaan saada nopeasti, jos ihmiset saadaan ymmärtämään kuinka tärkeää heidän työnsä on ja tieto miten heidän työnsä vaikuttaa. Siihenkin Demingillä oli menetelmä, jota hän kutsui “The Plan-Do-Study-Act (PDSA) Cycle is a flow diagram for learning”:

1. The first step is plan: ideas in people’s heads about improvement or innovation, new method or comparison of methods.

2. Step two. Do it, carry out the test, comparison, or experiment, preferably on a small scale, according to the layout decided in step one.

3. Step three. Study the results. Do they correspond with hopes and expectations?

4. Step four. Act, if we get that far. And what do we mean by act? We mean adopt a change, or abandon it, or run through the cycle again, possibly under different environmental conditions.

Kuusi tapaa

Kuusi tapaa, jolla Deming suositteli käyttämään tilastollisia menetelmiä laatujohtamisessa:

A. Not how much product, but how much acceptable product is what counts.

B. The only way to get a critical dimension right, and to know that it is right 100 percent, is to know that it is being made at a safe distance from the required tolerances in the first place.

C. Safety, economy, and quality assurance all require specification in terms of a distribution.

D. How much variation can you take out of your product, and how much improvement can you achieve without making expensive changes in your equipment or raw material? The statistical method helps to answer these questions.

E. Statistical control furnishes a rational basis for deciding whether specifications should be changed.

F. Two problems are always present in the production or purchase of materials; Problem A. What to do with this lot? (Accept it, reject, pass, scrap, rework, regrade, or further inspect it before deciding which to do.) Problem B. What to do with the process? (Leave it alone; or look for some identifiable cause, make some adjustment, use different raw materials; carry out more or less inspection than you have been doing on previous lots.)

G. There are two kinds of mistakes occasionally made in any quality control program: 1. Looking for an assignable cause of variation or increasing the amount of inspection, when the variations in quality are only random. 2. Failing to look for an assignable cause of variation, or failing to increase the amount of inspection, when an assignable cause actually did exist.

H. Each point on the control chart is derived from inspection tests carried out on a supposedly homogeneous batch of product.

I. It is the responsibility of every industrial executive to acquire an appreciation of the fundamental principles underlying the statistical method. Then when statistical methods are used in. his plant the organization must be such that action can and will be taken when need is indicated by the control chart.

J. Control chart uses include the following problems: Mass production in the usual sense is not necessary to their use. Most of them can be handled satisfactorily in no other way.

Japanin teollisuuden loikka

Japanin teollisuuden loikkaan oli yhdeksän syytä Demingin mukaan:

1. Genuine and resolute determination on the part of management to improve quality. 2. Confidence in their ability to lead Japanese industry forth from the bad reputation that Japanese products had built up in the past, confidence in Japanese scientific ability, and confidence in Japanese skills. Confidence also, I might add, in statistical methods.

3. They were Japanese, with industrial experience, and with an inbred pride of workmanship.

4. Japanese top management, statisticians, and engineers, learned the statistical control of quality in the broad sense of Shewhart, as defined further on.

5. Management took immediate interest and learned something about the techniques of the statistical control of quality as well as about the possible results, and still more about what their own responsibilities would be. Proper arrangements for contact with top management, at the outset, was one of the fortunate features of statistical education in Japan.

6. Statistical education became a continuing process. Statistical methods cannot be installed once for all and left to run, like a new carpet or a new dean. They require constant adaptation, revision, extension, new theory, and new knowledge of the statistical properties of materials. Perhaps the main accomplishment in the eight-day courses that began in 1950 was to impart inspiration to learn more about statistical methods.

7. The Japanese learned the difference between a statistical problem and one in engineering, chemistry, management, or marketing. They learned that statistical knowledge is not a substitute for knowledge of engineering or of other subject-matter, and that knowledge of engineering does not solve statistical problems.

8. Japanese manufacturers took on the job themselves. They did not look to their government nor to ours for help. When they arranged for consultation, they sent a ticket and a cheque. They gave financial and moral support to statistical education, mainly through the Union of Japanese Scientists and Engineers.

9. Suggestions and technical information have a fairly clear channel from lower to higher levels of supervision and management. A Japanese executive is never too old or too successful to listen to the possibility of doing it a better way.

Mitä meidän pitäisi tehdä kirjan perusteella?

1) Variaation johtaminen on Demingin keskeisiä ajatuksia – kuinka hyvin onnistuu ennustamaan variaatiota ja johtamaan sitä. Variaation kutistaminen eli tasalaatuisuuden tavoite oli Demingille keskeistä: “Understanding variation is critical to good management. Take the idea of continual improvement, which says that the only way you can improve a process is to continuously shrink the variation.”

2) Variaation lisäksi toinen keskeinen teema on ihmiset….. “If you understand how people work in a system, and treat people as part of that system, quality of your products and services will improve.”

Mitä minun pitäisi itse tehdä? 

Opetella toimimaan Demingin johtamisen määritelmän mukaan….. “Leadership and Management of People What is a leader? As I use the term here, the job of a leader is to accomplish transformation of his organization. He possesses knowledge; he himself has been transformed. He has personality and persuasive power. How may he accomplish transformation?

1. First he has theory. He understands why the transformation would bring gain to his organization and to all the people that his organization deals with, the customers, suppliers, environment.

2. Second, he feels compelled to accomplish the transformation as an obligation to himself and to his organization.

3. Third, he is a practical man. He has a plan, step by step.”

Mitä muuta opin Demingistä? Tilastotieteellisen lähestymistavan hyödyntämistä johtamistyössä.

Yhteenveto

Kirja kuudella sanalla:

“Paper profits do not make bread: improvement of quality and productivity do.”

”Everyone Doing His Best Is Not the Answer”

”There Is No Substitute for Knowledge (Information Is Not Knowledge)”

”Deming would point at tables of data and say, “Tons of figures—no knowledge.”

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Fried & Heinemeier Hansson: Rework

bout the book

“Why don’t we just call plans what they really are: guesses. Start referring to your business plans as business guesses.” This quote illustrates the content of the book. Fried and Hansson has great ideas and a lot of those. That’s why you should continue reading.

What are the key learnings?

The mission of the book is as they say: “We hope it inspires you to rework how you do things.” And in a way it does. No, you won’t be getting new skills nor learn new theories or even read about great cases. You simply get inspiration to the ideas that you have already been thinking.

The key learnings are

–      “Become a starter, not an entrepreneur.

–      Do not raise funding, because it’s a bad deal.

–      A business without a path to profit isn’t a business, it’s a hobby.

–      Build an audience, because an audience can be your secret weapon.

–      Marketing is not a department, it is something everyone in your company is doing 24 / 7 / 365.”

I would call this book as a growth hacking of work

–      “Contrast that with learning from your successes. Success gives you real ammunition. When something succeeds, you know what.

–      Maybe the right size for your company is five people. Maybe it’s forty. Maybe it’s two hundred. Or maybe it’s just you and a laptop. Don’t make assumptions about how big you should be ahead of time.

–      Small is not just a stepping-stone. Small is a great destination in itself.

–      Workaholics aren’t heroes. They don’t save the day, they just use it up. The real hero is already home because she figured out a faster way to get things done.”

How to become s starter?

–      “Let’s retire the term entrepreneur. It’s outdated and loaded with baggage. It smells like a members-only club. Everyone should be encouraged to start his own business, not just some rare breed that self-identifies as entrepreneurs.

–      Anyone who creates a new business is a starter. You don’t need an MBA, a certificate, a fancy suit, a briefcase, or an above-average tolerance for risk. You just need an idea, a touch of confidence, and a push to get started.”

–      Stanley Kubrick gave this advice to aspiring filmmakers: “Get hold of a camera and some film and make a movie of any kind at all.” Kubrick knew that when you’re new at something, you need to start creating. The most important thing is to begin. So get a camera, hit Record, and start shooting.”

Make a dent in the universe

–      “To do great work, you need to feel that you’re making a difference. That you’re putting a meaningful dent in the universe. That you’re part of something important.”

Don’t take money from outsiders. Why?

–      “You give up control.

o  When you turn to outsiders for funding, you have to answer to them too. That’s fine at first, when everyone agrees. But what happens down the road? Are you starting your own business to take orders from someone else? Raise money and that’s what you’ll wind up doing.

–      Cashing out” begins to trump building a quality business.

o  Investors want their money back—and quickly (usually three to five years). Long-term sustainability goes out the window when those involved only want to cash out as soon as they can.

–      Spending other people’s money is addictive.

o  There’s nothing easier than spending other people’s money. But then you run out and need to go back for more. And every time you go back, they take more of your company.

–      It’s usually a bad deal.

o  When you’re just beginning, you have no leverage. That’s a terrible time to enter into any financial transaction.

–      Customers move down the totem pole. You wind up building what investors want instead of what customers want.

–      Raising money is incredibly distracting.

o  Seeking funding is difficult and draining. It takes months of pitch meetings, legal maneuvering, contracts, etc. That’s an enormous distraction when you should really be focused on building something great.”

Start a business, not a startup. Why?

–      “It’s a place where the laws of business physics don’t apply.

–      The startup. it’s a special breed of company that gets a lot of attention (especially in the tech world).

–      The startup is a magical place. It’s a place where expenses are someone else’s problem.

–      It’s a place where that pesky thing called revenue is never an issue.

–      It’s a place where you can spend other people’s money until you figure out a way to make your own.”

A business without a path to profit isn’t a business, it’s a hobby

–      Would you meet with a divorce lawyer the morning of your wedding? That would be ridiculous, right? You need a commitment strategy, not an exit strategy.

–      About pivoting… Huge organizations can take years to pivot. They talk instead of act. They meet instead of do.

–      Build an audience. All companies have customers. Lucky companies have fans. But the most fortunate companies have audiences. An audience can be your secret weapon.

–      Teaching is your chance to outmaneuver them.”

Go behind the scenes

–      People are curious about how things are made. It’s why they like factory tours or behind-the-scenes footage on DVDs.

–      They want to see how the sets are built, how the animation is done, how the director cast the film, etc.

–      They want to know how and why other people make decisions.

–      Letting people behind the curtain changes your relationship with them.”

Marketing is not a department

–      “Accounting is a department. Marketing isn’t. Marketing is something everyone in your company is doing 24 / 7 / 365.

–      Just as you cannot not communicate, you cannot not market: Every time you answer the phone, it’s marketing.

–      Every time you send an e-mail, it’s marketing.

–      Every time someone uses your product, it’s marketing.

–      Every word you write on your Web site is marketing.

–      If you build software, every error message is marketing.

–      If you’re in the restaurant business, the after-dinner mint is marketing”.

About hiring

–      “Do it yourself first.

–      Never hire anyone to do a job until you’ve tried to do it yourself first. That way, you’ll understand the nature of the work. You’ll know what a job well done looks like.

–      Hire when it hurts.

–      Don’t hire for pleasure; hire to kill pain. Always ask yourself: What if we don’t hire anyone? Is that extra work that’s burdening us really necessary? Can we solve the problem with a slice of software or a change of practice instead? What if we just don’t do it?”

Who to hire?

–      “If you are trying to decide among a few people to fill a position, hire the best writer.

–      It doesn’t matter if that person is a marketer, salesperson, designer, programmer, or whatever; their writing skills will pay off. That’s because being a good writer is about more than writing.

–      Clear writing is a sign of clear thinking. Great writers know how to communicate. They make things easy to understand. They can put themselves in someone else’s shoes. They know what to omit.

–      Those are qualities you want in any candidate.

Comeback of writing

–      “Writing is making a comeback all over our society.

–      Look at how much people e-mail and text-message now rather than talk on the phone.

–      Look at how much communication happens via instant messaging and blogging.

–      Writing is today’s currency for good ideas.”

Ideas are forever

–      “Ideas are immortal.

–      They last forever.

–      What doesn’t last forever is inspiration.

–      Inspiration is like fresh fruit or milk: It has an expiration date.”

About inspiration

–      When you’re high on inspiration, you can get two weeks of work done in twenty-four hours.

–      Inspiration is a time machine in that way.

–      Inspiration is a magical thing, a productivity multiplier, a motivator. But it won’t wait for you.

–      Inspiration is a now thing. If it grabs you, grab it right back and put it to work.”

How should we change according to the book?

Put your inspiration into work.

What should I personally do?

Write to rework@ 37signals.com

Summary

The book in six words – ”Say and I will listen. Talk and I will reply. Ask and I will think” (Mikko Mattinen)

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Ries: The Lean Startup

How was the book?

This book is one of a kind although the first 30-40 pages were a bit dreary. The book is more or less the kind of content that you would expect to find from a startup book. After the first 40 pages the content became really interesting, even super-interesting. The book created some kind of flow that sucked me into the pages. I nearly read 150 pages in a single stroke.

What are the key learnings of the book? 

Mårten Mickos simplified the current startup way-of-working with two words. He said that we should ”test and measure”. The Lean Startup is about testing, measuring and building.

The goal of the book is to advocate a scientific and lean approach to the creation of startups and even developing corporations. The Lean Startup methods goal is to ”learn how to build a sustainable business as quickly as possible.” The need to find out sooner than later what works and what does not work.  

About the Lean Startup Method

The Lean Startup Method idea is that the different teams in a startup are accountable for the validated learning via innovation accounting, well-defined financial model and engine of growth. Speed and quality are allies in the pursuit of the customer’s long-term benefit. A startup is a portfolio of activities or a human institution designed to create a new product / service under conditions of extreme uncertainty. What happens when organizations start using the Lean Startup approach? They will stop wasting people’s time.

The Lean Startup method is simply. The recipe is:

1.  Entrepreneurs are everywhere

2.  Entrepreneurship is management

3.  Validated learning

4.  Build-Measure-Learn

5.  Innovation accounting

Building a startup is like ”commuting to home, you don’t give up because there is a detour in the road or you made a wrong turn. You remain focused on getting to your destination”. Startups vision is ”creating a thriving and world-changing business”. Engine of growth is a feedback loop that keeps the startups wheels rolling.

Try and measure, try and measure and then validate learnings. The Lean Startup model is all about validating learning. Learning is one of the measures of progress for a startup. 

”The goal of every startup experiment is to discover how to build a sustainable business around that vision.” The product is the end-result of the strategy. Startups strategy is that ”startups deploy strategy which includes”:

•     A business model,

•     A product road map

•     Partners

•     Competitors (?)

•     Ideas about customers

Build-Measure-Learn feedback loop:

·       Build

o  Product

·       Measure

o  Data

·       Learn

o  Ideas

·       Build

o  Product

·       Measure

o  etc….

What to do in Build phase?

•     As quickly as possible aim to build a minimum viable product (MVP).

What to do in Measure phase?

•     Innovation accounting offers a quantitative way to measure that are the efforts ”bearing fruit”.

What to do in Learn phase?

•     Set learning milestones.

About the era of Entrepreneurial Renaissance

We are living in the era of Entrepreneurial Renaissance. ”The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere.” So why shouldn’t corporations do that also? Entrepreneurs could also be intrapreneurs working within a corporation. Their task would be to build learning milestones within the company and measure the progress. Intrapreneurs have to choose between island of freedom or island of isolation? Or both.

Central question in lean manufacturing or in agile software development is ”which of our efforts are value-creating and which are wasteful?” Learn to see the waste. Lean thinking provides benefit for the customer; anything else is waste. Ask yourself ”what keeps me awake at night? How much less could have we done. And remember to pivot based on your experience.”

About business operations

A good business plan has:

•     Clearly identified facts (brutal facts).

•     What is needed is to do some empirical testing.

Analysis paralysis. Your are too eager to execute and have no time for analysis. Or your are analysing, but not talking with the potential customers. How to break this analysis paralysis? Enter MVP (minimum viable product) as quickly as possible.

With MVP you will test your business hypothesis. Dropbox used a video narrated by the founder as the MVP. It increased the beta waiting list from 5000 people to 75000 people.

How innovation accounting works?

1.                       Use MVP to collect real data about the company to track progress.

2.                       Iterate MVP to get closer to ideal.

3.                       Pivot or persevere.

Use milestones to track progress and tune the engine. Use smoke test (possibility to pre-order a product) and measure the interest in the market place to try the product. Like Tesla has done with the Model 3. Combine funnel and cohort analysis to analyse and express the progress of MVP.

About pivot and persevere

”When to pivot or when to persevere?” is the question. What is pivoting? It is a structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth. Low-quality MVP might be a good solution, because developing features for early adopters beyond their requirements might be waste. Mainstream customers are more demanding. #LEAN

Pivots in different flavors:

•     Zoom-in pivot

•     Zoom-out pivot

•     Customer segment pivot

•     Customer need pivot

•     Platform pivot

•     Business architecture pivot

•     Value capture pivot

•     Engine of growth pivot

•     Channel pivot

•     Technology pivot

About growth

Sustainable growth rule is that new customers come from the actions of past customers. Four primary ways that past customers drive sustainable growth:

1.  Word of mouth

2.  As a side effect of product usage.

3.  Through funded advertising.

4.  Through repeat purchase or use.

About engine of growth

Three engines of growth:

1.  The Sticky Engine of Growth means low churn rate and high retention rate.

2.  The Viral Engine of Growth i.e. Social networks or Tupperware. Growth happens as a side effect of customers using the product. For example Hotmail and ”P.S. Get your free e-mail at Hotmail” and a clickable link.

3.  The Paid Engine of Growth is about all paid services that helps the company grow.

You can use all engines of growth simultaneously or just one depending on the situation, but typically successful startups focus on one engine of growth.

About the Five Why-method

Ask five time why to get to the bottom of root cause. That way you might be able to prevent ”most problematic symptoms”. The method was developed by Taiichi Ohno as part of the Toyota Production System. This way you will evaluate technical and human error of the situation. Startup teams should go through the Five Why’s when they encounter problems. And then you can prevent the Five Blames. When deploying Five Whys gather everybody into a room and avoid anybody being blamed as the scapegoat. Start with a small problem so that the team get’s use to it. Overtime more larger problems can be solved with Five Whys, because people are used to it. Five Whys is a great way to facilitate learning and it will lead to an adaptive organization. Use also the spirit of Genchi Gembutsu (Go and See what the user is doing).

About innovation and experimentation

How to nurture innovation?

•     Scare but secure resources.

•     Independent development authority.

•     A personal stake in the outcome.

Create a platform for experimentation and ground rules to autonomous startup teams within a corporation:

•     How to protect the parent organization?

•     How to hold entrepreneurial managers accountable?

•     How to reintegrate an innovation back into the parent organization (if successful)?

About a company and lean

Four phases of a company:

1.  Startup phase lead by the entrepreneur

2.  Challenge of scale

3.  Operational excellence and a new manager

4.  Top-line growth.

An example of lean and way-of-working:

•     Single peace envelope flow works, because of the power of small batches.

•     And small batches helps to identify quality problems sooner.

About Leap-of-faith

Key learning in building the Leap-of-faith assumptions is the value and growth hypothesis. For example why Facebook raised so much VC money?

1.  Value hypothesis: The time that active FB users spent on the site. Customers found that FB was useful to them.

2.  Growth hypothesis: Penetration rate in the early campus market.

Value and growth hypothesis are the most important LEAP-OF-FAITH questions any startup will face. Turn the Leap-of-faith assumptions (value + growth hypothesis) into a quantitative financial model and your business will survive.

How should we change according to the book?

Three key points:

1.  Build – Measure – Learn

2.  Use MVP as early as possible.

3.  Stop wasting time.

What should I personally do? 

Early MVP’s rule the world.

Summary

The book in six words – Go and See to learn about your customers.