Busy to Death

There’s a famous story about an executive that hired Edward W. Deming to spend a week with his team and offer recommendations on how to improve both their own performance and the performance of the organization they led. Word has it that Deming arrived on the first day, said “hello,” and then walked straight to the corner of the executive’s office to sit down. He stayed there, sitting silently for the entire day as the executive went about his daily activities.

At the end of the day, the executive approach Deming and asked “Do you have any thoughts?” All Deming said was, “I’ll be back tomorrow,” and he walked out the door.

The next day—just as he had the day before—Deming walked into the executive’s office, sat in the corner, and said nothing. He did scribble a few notes from time to time as the executive went about his daily activities. Again, at the end of the day, the executive asked Deming for his thoughts. Again, Deming simply said, “I’ll be back tomorrow.”

This cycle continued throughout the entire week until Friday evening, when the executive lost patience and pushed Deming for a more informative answer. Deming asked him one question: “What are the top-three priorities for the business?” The executive rolled them off like a shot. “Well,” said Deming, “you’ve spent the entire week working on none of them, yet your time has been entirely booked, and every conversation with you and every conversation with every individual that walks into your office starts with how busy you are. Can you guess why?”

We all love being busy. In fact, we celebrate and subtly enjoying telling our colleagues, collaborators, and competitors how “busy” we are. The question we don’t consider is this: What is the cost of all this busy-ness?

In the majority of organizations, being “busy” is systemic, and often for perverse reasons. Being visibly busy is often seen as or at least equated to hard work, real work, important work. Yes, being visibly and easily observed as busy by constantly running around from meeting to meeting, short on time with places to go and people to see signifies credibility of hard, committed work. In many cases, people are rewarded for it—further propagating the hero culture of <insert name> working late nights, evenings, and weekends to get us over the line. It becomes the drug to keep and reward the motion of the hamsters’ wheels as they keep spinning. But too often this spinning motion is mistaken for progress.

Believe me, it’s not.

Over-optimizing for executing work is dangerous. Actually, it’s very dangerous indeed as it causes us to get stuck in plan-do-plan-do cycles. We compromise reflection, retrospection, and review of the outcomes of all the output we are creating. We stop building learning loops into our work to plan-do-check-act the results of all this effort. We don’t allow time to study, consider, or understand if the result of all this activity is actually aligned to what we are hoping to achieve. We are frankly too busy to.

STOP (AND THINK)

I find myself constantly reminding people that thinking is an activity too. Yet how much time to you really make for it? If I was to go through your schedule for the week, where would I see it? When would it happen?

In Thinking Fast, Thinking Slow by Daniel Kahneman, we are told that we essentially have two modes of thinking before acting, known as System 1 and System 2. System 1 is our reactive, speedy response to circumstance decision-making. It is a bias loaded, preprogrammed neural network of pathways that essentially exists so we don’t have to think. System 2, however, is when we deeply, slowly consider numerous situations, options, and alternatives when decision making.

Now, we obviously can’t use System 2 for every decision we have to make, or we would get nowhere. Similarly, only using System 1 the entire time means we are in danger of making snap decisions full of false assumptions based on incomplete information or little evidence. The point to be aware of is this: if you are over-optimizing and not balancing these modes of thinking—and, in turn, decision-making—you are likely to end up in a less than desirable state.

I challenge leaders to consistently make time for System 2 thinking during the course of their workday. It’s an imperative, not only important. The trick to achieve this is to consider the decisions that need to be made. Know what they will require and be deliberate about when to use either mode.

Make time to reflect, to retrospect, and decide next steps or corrective actions that need to be made. Define the information you need to make those decisions, then seek out, absorb and process it. When you over-optimize for “doing,” you lose the power of “thinking.” We need to do both for effective decision making while still allowing the organization to move at speed.

One exercise I get leaders to do is mark where they think they are on each aspect of the above three continuums. You might surprise—even scare—yourself when you do it. 

COLLABORATE

More often than not, we cannot make every decision on our own—as much as we might like to! Making time to coordinate with colleagues is important, especially when delivering complex and interdependent initiatives. However, how much time do you make for debate and alignment, both unplanned and planned, with your collaborators?

It’s not uncommon for me to see executives and leadership teams that are unable to “get time” with one another for weeks out into the future. The side effect of this symptom is further queuing of work and delayed decision making. When you fill your plate to the maximum, you’re removing opportunity or showing no empathy for the people you need to collaborate with. Expecting them to drop everything they are doing and report to your office is a form of disrespect. Further still, if you’re setting this example of behavior with your reports, you can be sure the same behavior will trickle down to theirs.

Making time and space for planned and unplanned collaboration is important, especially if you want your organization to move fast at scale. It’s easy to say “I empower my teams to make decisions,” but in truth they can’t, don’t, or won’t want to make every decision in isolation.

AND LISTEN…

Be sure to find time to listen to what your people are discovering through the course of their work, to inform and improve your own decision making. Free space to allow timely support for collaboration and communication with the people you rely on—especially for when the unexpected but expected happens!

Try creating a Vanilla Ice calendar with a lotted time to stop (and think), collaborate and listen.. Yo! V.I.P let’s kick it 

Remember, our most valuable commodity as leaders is time. What are we spending it on, who are we spending it with, and how do we use it to achieve the outcomes we desire? If you’re in the business of being busy, I’d suggest you get out of it before you and your organization become busy to death.

Things to consider:

• Have a list of your top priorities. If what you’re being ask to do isn’t on it, then don’t do it, or alternatively suggest how people can move ahead without you.
• Thinking is an activity too—don’t undervalue it. Make time and space for it in your daily work schedule (not evenings and weekends).
• Stop booking all your available capacity. It means you’ve no adaptability or optionality in your schedule for unexpected events (which should be expected to happen).
• Use an activity account to understand where you are spending your time. It doesn’t have to be overly sophisticated. Look at last week’s calendar and write down notes about each day
• Set relative percentages for where you want to spend your time, then track and monitor it. If it’s not what you want, think of how you can adapt how you spend your time to move toward it.

 

Optimize to be Wrong, not Right

Let’s be honest. We have no idea what is going to happen a year, a week, or even five minutes from right now. And what’s worse, believing we do means we are not only kidding ourselves, but it’s almost certain we will not achieve our desired result.

Rarely do predictions come true. We live in a complex world that frequently and without warning changes around us. It’s a system of constant flux, shape shifting and randomness. Yet still the prevailing approach to deal with this uncertainty is to seek and expect statements of assurance, predictability and guaranteed success. Why? We all know the numbers, facts and figures served up are fiction.

We need to change our mindset.

It’s time to optimize to be wrong, not right.

Invest in information

Imagine, if you will, how a financial trader operates. With $100 to invest and many funds from which to choose, a trader would never bet their entire $100 in one single fund. Instead, they use a system that allows them to explore many possibilities while continually developing options for better investment decisions based on what they discover from exploring each possibility.

The strategy is to limit investment and spread the risk across a number of funds where the potential for a great reward is offset by the potential for a small loss. Instead of investing $100 in one fund they invest $1 in five different funds to find out which is the best investment. It’s a quick, inexpensive way to test the market. From there the trader can pull out of weaker investments with little money lost and increase investments in higher-performing funds. They are paying for information, as information has value.

Figure 1: Antifragile by Nassim Nicholas Taleb

This system and strategy embraces the principle of optionality. The majority of options will turn out to be bad options but the point is that those options are now visible as such. This means they can be abandoned before we commit major financial, time or emotional investment in them. If it becomes clear that the investment is not going in our desired direction, we still gain value information for that investment plus we’ve narrowed our cone of uncertainty.

Accepting that the majority of your ideas and/or methods aren’t going to work out as expected is liberating, but more important it’s advantageous. Yet, counterproductively, the majority of business organizations, teams and individuals resist the reality of the world, seeking certainty before making a move, or worse, believe their Industrial-Age governance process to serve up scope, time and budget is a proven approach to predict success. If anything, they invest more time, money and resources refining and refining it.

So, why do people behave this way? Why do we frame the certainty of result when we have little evidence to support it aside from experience, case studies and statements of “<insert famous tech company> does it” to back up our claims? Furthermore, why do we continue to use processes that are biased to predict the undeniable success of our idea and seek to validate our hypothesis rather than test to invalidate it?

Most companies and individuals are stuck in an unhelpful rut of scrambling to prove our ideas and methods right rather than prove them wrong, or at least find their weaknesses so we can strengthen them and build something better than what existed at the start.

People tend to forget that the measure of progress for innovation is not how many “good” ideas you validate, but actually how many you invalidate quickly and inexpensively. Not over-investing in ideas and/or methods with little or no traction frees up investment and time to pursue alternatives based on valuable information we obtain from invalidated experiments. This optionality is what helps us all make better decisions when dealing with conditions of extreme uncertainly, which is of course inherent in any innovation activity.

Optionality works on negative information, reducing the space of what we do by gaining knowledge of what does not work. For that we need to pay for negative results. The information collected through board experimentation helps to narrow the cone of uncertainty, and inform our next best step, action or newly discovered options. The more options you have, the more you are able to explore different opportunities, meaning you can test quickly a variety of ideas without investing in an entire product launch and committing to it too early.

Counterintuitively, for most organizations the management of unpredictable innovation requires providing certainty of the results. High-performance organizations crave unpredictable results, but certainty in the management of innovation.

A rigid business plan, product roadmap and/or set of requirements forces people to do whatever it takes to prove that the idea or method is a good one. If we are determined to convince others that a certain result is possible, we will lose sight of all of the alternative possibilities and potential options available along the way.

Success doesn’t happen in a straight line, which is why it’s important not to let our business idea tie us down too hard, too early. The market may change, customer needs fluctuate and ideas evolve. If we cling too tightly to an idea or method that doesn’t work, then we’ll go down with it.

When a large amount of effort is required to just get an idea off the ground, it’s easy to become overly invested (time, money or emotionally) in that first idea. Similarly, simply hoping you’ll iterate your way to the answer is its own death march and time sink to excessive investment. Writing the funding documents, roadmaps and dates, schedules and scope slowly starts to close your mind to alternative exit ramps to get off the highway to hell.

Instead, making multiple small investment to experiment—to dig deeper and find out whether your hypothesis is true or false (or somewhere in between)—means at worst you’ve lost a small amount of time, money and resources but learned a lot. From there, you can synthesize what you have learned and feed it forward into your next round of experiments while continuing to run relatively inexpensive experiments with small risk that cover a broad base of hypotheses. Now, you’ve created a recoverable situation and one with which you can work. Even better, we can scale this method up to match our appetite.

One option is not a real option

So, how could you even start to test ideas quickly, discover information and determine whether your innovation is on the right path? There are many ways of getting there. But one I like is Toyota’s Set-Based Concurrent Engineering, or SBCE for short. Toyota uses SBCE at the concept stage for new-product development when there is extreme uncertainty regarding potential new solutions. Therefore, they plot a path to explore numerous sets of solutions in parallel to test, inform and discount potential options of the final solution. This process is used for everything from new steering wheels to suspension systems for cars.

In SBCE, cross-functional teams design, develop and test sets of conceptual solutions in parallel. As the solutions progress, teams build-up understanding, knowledge and evidence about the sets. Each iteration allows the team to gradually narrow these sets by eliminating bad and/or infeasible solutions based on the outcomes of their experiments.

Even as they narrow the sets they are considering, teams commit to staying within them so that others can rely on the sets to continue to remove further uncertainty from the overall problem space. At the end of a cycle, designs are compared, cut and/or progressed with improvements based on learning from the other teams. SBCE enables deferring commitment until the last possible moment and optionality.

Figure 2: Toyota’s Set Based Concurrent Engineering

Toyota appears to judge uncertainty based on experience and simple (often unwritten) rules such as, “If there’s only one solution and we have not established what it will cost to produce, then the set is too small.”

While the Toyota SBCE standard process provides guidance, the chief engineer is empowered to customize the standard to their particular situation. For instance, failures to reduce uncertainty at the proper time or cycle turn into emergencies. Not having enough options to explore is in itself an emergency, with all effort focused on resolving the problem.

When design happens in large batches and/or increments, we can’t explore all the different possibilities and the system may fail. Simultaneous small experiments enable us to experience many small options, outcomes and failures, each of which gives more information about how the design should be modified. In essence, the system becomes more resilient with each failure, which aligns to Nassim Nicholas Taleb’s definition of Antifragility.

Embrace opportunities

Optionality is a portfolio of de-risked opportunity, meaning it can be applied features, products, even portfolios of products for businesses.

The trick is to change our exposure to rare events in a way that we can benefit from them. When uncertainty is high, maximizing your exposure to exploring many possibilities while investing a relatively small amount to test a broad range of hypotheses yields large amounts information to inform better decision-making of what to invest in next—all while simultaneously limiting risk.

New product solutions emerge by feeding forward the information collected from multiple experiments that did not lead to success. Remember…

Product development is not about developing products. It's about developing knowledge about the product. Great products emerge as a result.

— Barry O'Reilly (@barryoreilly) March 11, 2017

References

Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb

http://sloanreview.mit.edu/article/toyotas-principles-of-setbased-concurrent-engineering/

http://seedcamp.com/resources/be-nimble-keeping-milestone-optionality/

http://www.slideshare.net/MarkHart2/antifragility-in-new-product-development

https://whatsinnovation.com/2016/06/06/the-time-tested-value-of-optionality/

https://25iq.com/2013/10/13/a-dozen-things-ive-learned-from-nassim-taleb-about-optionalityinvesting/

https://en.wiktionary.org/wiki/optionality

 

Leading Culture Change Means Changing Yourself Before Others

Leaders today are inundated with reasons to transform their organizations in search of better outcomes. New market entrants erode profit, competitors seem to be always moving ahead, all while customers seek higher quality and cheaper sources of service.

The pace and appetite for change is exhausting. Yet comparatively, it feels like your organization is sinking deeper into the mud. “We want to change but the culture here is too difficult to change”. It’s a frequent remark we have all heard and said but what does it mean?

Culture is the original business meme. Its meaning and usage are as abstract and intangible as the word itself. “If we just fix the culture we will be successful”. A statement full of positive intent yet lacking a clear directive or step to take.

A new culture is not a browser plugin. Leaders cannot simply select an extension, download and install it from the Web. Nor should, leaders expect the update to be applied only to others and not to themselves.

The prevailing thinking is the need to change people’s mindset. The belief being if we tell people to think differently, they will act differently. All hands meetings are called, PowerPoint decks are prepped and an executive tour is scheduled to rally the troops for the mission ahead. A one, maybe two day training session is delivered and the metamorphosis begins. But it does not.

Culture is our behaviors. It is the actions we perform. The way we talk, and treat one another. The way we behave reflects the values and expectations we have of ourselves, and of one another.

The single most important action of any leader is to role model the behaviors they wish to see others exhibit in the organization.

Actions are what matter. Not talk

Culture change does not lead with words, it leads with action. By changing the way we behave, our actions begin to change the way we observe, experience and eventually see the world. By seeing and experiencing the world differently, it changes the way we think about the world. People do not change their mental model of the world by speaking about it, they need to experience the change to believe and feel it.

John Shook’s Change Model, http://www.lean.org

John Shook was the first American manager to be hired by Toyota. He moved to Japan without knowing a word of Japanese, just a desire to immerse himself in the organization for a prolonged period of time to learn the Toyota Production System by doing it.

What he observed was not a group of managers telling people what to think, or how to perform their work. Instead he experienced the deliberate practice of experimentation, reflection and improvement by all employees in the entire organization. Toyota had developed a set of behaviours that advocated continuous learning and adaptation to new circumstances.

What Toyota understood is that culture and circumstance is always unique and changing, and to manage change one has to be ready to learn, adapt, and apply new changes as they are happening.

A Journey for Leadership and Behavior.

Shook’s model highlighted that transformation starts from our behavior. Therefore, to start changing culture we need to change how people do their work.

In our experience a very effective first step for a major transformation is to start with a set of hand-picked initiatives that do things differently. We did this together with the engine manufacturing company Wärtsilä. Wärtsilä is over a century old manufacturing company that serves roughly half the ships in the world and has five billion dollar revenues – not a typical Silicon Valley startup.

To kickstart the transformation, leadership provided sponsorship and support to four cross-function teams to explore new ideas and ways of working. The purpose of these teams was to bump into and make visible the cultural glass walls that so often had stalled and hindered other initiatives.

Rather than have the four teams take courses or workshop ideas, the underlying idea was to have four teams experience a new way of working for real. This was ensured by selecting the top strategic innovation initiatives for the teams focus on.

The second step was to create an environment to cultivate the new ways of working. In other words, we made the workspace inspiring, different, and importantly, we let the team personalize it to make it their own. We provided guidance, tools and innovation frameworks for the people to leverage.

By embracing Shook’s philosophy, it was extremely important that the teams had a mandate to work differently and to really experiment with new ways of working, new behaviour. The mandate created a psychological safety net for them. Failure is expected when working creatively and trying out new ideas, and therefore, it was critical to enable safe failure and learning opportunities.

To further facilitate the cultural transformation, the teams broadcasted their intermediate results in demo sessions to the whole company. This turned out to be both popular and effective in further spreading the transformation by showing concrete results rather than talk of trying things differently.

In the demo sessions the audience gave scores to the teams, and the winning team always won quality craft beer. The happy winners of demo #1 from left: Shelley, Henri, Jan, and Martti of Wärtsilä.

Throughout the eight week program the teams fully experienced working in new, interesting and unforeseen ways. Rather than just reading a book or taking a course on lean, agile and design thinking the teams had to apply the new methods and mindset while creating meaningful outcomes for the business. For the individuals participating in the program it was an extremely effective way to safely learn new ways of working, and perhaps more importantly, to learn the limitations of the former company culture.

Jump-starting the transformation today

What did we learn from running this, and similar programs?

First, jump-starting the cultural transformation with a couple of spearhead projects, the right people and leadership support is very effective. The projects will demonstrate that the company’s own people can achieve the desired results and business outcomes with new ways of working.

Second, the people who have experienced new ways of doing are transformed. Applying the new behavior into real projects transforms their thinking about innovation and the whole company, which makes them the key people in spreading the new culture.

Finally, choosing the people to the spearhead projects is critical as those people will become the ambassadors for a bigger cultural change in the organization. They will tell the stories others will listen. They will introduce the new ways of working to others, as they are the people who know best how the new thinking applies to your company. They are the first penguins to dive into the cold water, swim and survive.

However, none of this matters if you, the leader of change, don’t change as well. As the leader of this change you are penguin number zero: the very first person who has to change your behavior. You need to be transparent about your vision, words, and actions. You need to work according to the new culture you wish to see.

This post was co-authored by Risto Sarvas and I.

I’m partnering with Futurice to host executive roundtable sessions in London and Berlin, as well as an event in Helsinki, ‘Lean Rocks’, all during February. Futurice and I will be offering bespoke training and workshops with clients in Helsinki during February, if you’re interested in learning more about this please contact me or Timo Hyvaoja

Stop Typing. Start Testing.

“If I knew where all the good songs came from, I’d go there more often”, so said Leonard Cohen when asked how he wrote classic hits like Suzanne and Hallelujah. Formulating the ideas behind timeless hits is not an easy task – serendipity, stimulation and skill all equally play their part.

Yet in large organizations, a lack of ideas is rarely the problem. Business leaders and executives are inundated with suppositions, proposals and pitches on how to increase, invent and imagine new revenue streams for their organization. Most often, the biggest challenge is not conjuring up the concept… it’s killing it as quickly and cheaply as possible.

In The Principles of Product Development Flow, Don Reinertsen’s research concluded that ~50% of total product development time is spent on the ‘fuzzy front end’ i.e. the pitching, planning and funding activities before an initiative starts formal development. In today’s fast paced digital economy the thought of spending half of the total time to market on meetings and executive lobbying with no working product to show isn’t just counterproductive and wasteful – it’s ludicrous.

 

Furthermore, the result of all this investment is often an externally-researched, expensive and beautifully illustrated 100-page document to endorse claims of certain success. The punch-line presented through slick slide transitions is “All we need is $10 million, two years, one hundred people and we’ll save the business!” Science fiction, theatre and fantasy rolled into one.

What is really needed is a systematic, evidence-based approach to managing the uncertainty that is inherent at the beginning of any innovation process. Our purpose when commencing new initiatives is to collect information to help us make better decisions while seeking to identify unmet customer needs and respond to them.

New business possibilities are explored by quickly testing and refining business hypotheses through rapid experimentation with real customers. Our goal is to perform this activity as early, quickly and cheaply as possible. Lengthy stakeholder consensus building, convoluted funding processes and hundreds of senior management sign off sessions is not.

Decisions to stop, continue or change course must be based on the ‘real world’ findings from the experiments we run, not subjective HiPPO (Highest Paid Person’s Opinions) statements supported of how they’ve “been in the business for thirty years and know better”.

Imagine a world without costly executive innovation retreats, and where the practice of pitching business cases at annual planning and/or budgeting cycle meetings is extinct. Instead, a similarly sized investment is assigned to small cross-functional teams to explore given problems, obstacles or opportunities throughout the course of a year. Over a short fixed time periods a team creates a prototyped solution to be tested with real customers to see if they find it valuable or not.

We are investing to reduce uncertainty and make better decisions. You are paying for information. The question is really how much do you want to invest to find out?

In his book, How To Measure Anything, Douglas Hubbard studied the variables that hold the most information value when making investment decision is software projects. The results showed two important insights, how much a project cost and how long a project is going to take held little significance in terms of understanding if a project would be successful or not. What really matter was (1) will the project be cancelled, and (2) will anyone actually use it.

Now, let’s compare how investment decisions are made in the traditional and experimental worlds.

A traditional business case is a set of untested hypotheses and assumptions, backed up by subject matter experts, case studies and market research. In an experimental approach to innovation, real data is collected from working product prototypes that have been tested and informed by feedback from real customers. Which of these strategies do you believe will most effectively provide answers to Hubbard’s most valuable variables?

Similarly, what happens next? In a traditional world once a business case is signed off, detailed requirements are created and a project initiated to build, integrate, test and hopefully, release the entire recorded product requirement backlog – only once all the requirements have been captured, built and release will we find out if our customer will use any of it. With an experimental strategy, we already have validated or invalidated our early working product prototype upon which we can stop, pivot and/or immediately build new features and enhancements based on the customer feedback we collected through our early testing cycles.

Finally, and the most telling and critical piece, the most expensive way to find out if a product works is to build the entire product and then release it. The key to rapid experimentation is not to prove that all our ideas are winners, but to kill losing ideas early to cut out wasted effort, time and further poor investment.

Summary

Not all our ideas will have a positive impact on the business. By testing early and often with the real people we are designing for – our customers – we can use their feedback to make more informed and evidence-based investment decisions for the future success of our business.

Like Cohen said, “I think you work out something. I wouldn’t call them ideas. I think ideas are what you want to get rid of… [they].. dissolve into deeper convictions”.

Next time you have a new initiative in your organization remember these six principles:

1. Stop typing documents. Start testing with real customers as soon as possible.
2. Our mission is to discover as quickly and cheaply as possible the most valuable information to base further investment decisions on i.e. will the project get cancelled or will anyone use it. Optimize for this.
3. Define success before you start experiments. You need to hold yourself accountable to the results of your experiments to make decisions to stop, change course or continue with your activities. Doing that after the fact isn’t an experiment. It’s “Experiment Theatre“.
4. Form small cross-functional teams and equip them to explore problem domains at speed.
5. When uncertainty is high favour shorter, faster feedback cycles to generate information to make the next decision.
6. Remember true progress is as more about killing bad ideas early than proving you’ve discovered the next unicorn idea.

References

Leonard Cohen: ‘All I’ve got to put in a song is my own experience’

How To Measure Anything, Douglas Hubbard

The Principles of Product Development Flow, Don Reinertsen

Lean Enterprise named in Top 10 books on Digital Transformation for Business Leaders

The Enterprise Project scoured the internet to find the most highly-rated and recommended books on digital transformation. As we approach 2017, it’s time to set up your organization’s path forward in this ever-changing digital world.

We’re delighted that Lean Enterprise has been named by The Enterprise Project in the Top 10 books on Digital Transformation for Business Leaders.

 

As one Amazon review wrote, “[Lean Enterprise]… clearly explains how the disciplines of lean, agile, kata, lean startup, and design thinking are converging through the unifying principles of an adaptive learning organization.

The authors show how to grow organizations which can innovate rapidly in response to changing market conditions, customer needs, and emerging technologies.”

Get in touch to start your Lean Enterprise journey!

ExecCamp: Turn Enterprise Executives to Entrepreneurs

The acceleration of change impacts technology, consumer expectations and economic models. The lifespan of companies is tumbling, from a 67 year average in the 1920s to 15 years today.

Are you responding? How? Organization wide transformation programs that lose momentum and slowly die? Innovation Labs that never produce or deliver? Training courses to certify teams in the next great method? Talking a lot of theory, yet showing next to no action. It’s time to stop doing the same things and expecting a different result.

The problem with transformation is never a lack of ideas. It’s lack of behavior change.

The enterprises that will survive embrace the entrepreneurial mindset, culture and approach at all levels of their organization.

In this talk Barry, will share how he is helping Fortune 500 companies rekindle their innovative spirit to tackle uncertainty and win on his executive immersion program ExecCamp.

A Retrospective On Entrepreneurship

One year ago today I quit my job, leaving my comfort zone to start a new business. The thought had been circling in my mind for some time, but I’d always silenced it with self-doubt and a perceived sense of security from my regular paycheck. But last October I finally stepped into the unknown, thanked my fantastic colleagues for their inspiration and encouragement, and moved from London to San Francisco.

Entrepreneurship (and in fact any new venture) is never really what you expect. In many ways that’s the point. It’s a voyage of personal and professional discovery — about yourself, your customers and your business model. There isn’t a linear trajectory toward success or failure. It’s an experiment, and a challenging one at that.

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A post shared by Barry O'Reilly (@barryoreilly)

I spent today at Ryōan-ji in Kyoto, a Zen temple with a famous rock garden where only fourteen of the fifteen stones are visible at any one time. It is said that only through attaining enlightenment can one view all fifteen stones at once. I thought it was the perfect place to run my own personal retrospective of the last year. Here’s what I’ve learned so far.

Clarity of vision matters.

A clear vision sets the context for all the other pieces of the venture to fall into place. How well I communicate my vision matters — and maybe it even matters the most. Being able to clearly articulate my vision helps people connect with it, and if people can connect with it they can buy into it. My vision also informs what matters most and helps me to prioritize what and where I invest my most valuable commodity — time.

I constantly ask myself, ‘Is this helping me move towards my vision or not?’. If it is, do it. If not, don’t.

Define success over multiple time horizons and perspectives, and review it regularly.

In conditions of extreme uncertainty I need a mechanism to make difficult decisions. Without anything to be accountable to, it’s easy to continually spin wheels, burn time and convince myself that I’m making progress.

Every well executed experiment begins with defining success before it starts. I have a regular cadence to set and evaluate target conditions over multiple time horizons (one week, one month, three months, six months, two years) and perspectives (personal, business, customer, market). This designs rigor, discipline and good governance into my operation rhythm.

If business partner(s) aren’t  100% committed, don’t continue together.

If the team has misaligned expectations or if someone discovers that the reality isn’t what they thought it would be, it’s best to accept the situation, part company and move on. Team members who aren’t fully committed can cause friction, poor decision making and negatively impact others.

Entrepreneurship is a learning experience, most of which you’ll only discover once you start doing it.

Just as no business plan survives first contact with customers, the same goes for personal assumptions and entrepreneurship. They’re hypotheses that only get exercised when tested. Failing fast, cheaply and early is as successful and validating that you’ve found a willing team.

Work hard to be self-aware.

I’ve learnt to understand what I like and don’t like. Where do I need help? What are my gaps, and how can I plug them? No one excels at all aspects of life or business. The trick is to enhance strengths and manage weaknesses. If you struggle with accounting, get an accountant. If your enjoy writing blogs, write them. Don’t ignore what needs to be done because you don’t like or understand it, it will come back to bite you – it’s only a matter of time.

Accept self-doubt and trust yourself.

I constantly ask myself questions like ‘Why me?’, ‘Do I have what it takes to make this work?’, ‘Should I have left my job, friends and city?’ or ‘Was this a bad idea?’ These thoughts run through more people’s minds than you would think. Questioning yourself can be healthy, but over-analyzing less so.

I remember that the reason I decided to get out of my comfort zone was because that’s where the real magic happens. I remember to trust myself, the decision I make and my ability to get there. I’ve never met anyone who said they wouldn’t hire me because I tried to start my own company, regardless of whether it worked out or not. Actually they admire it, often sharing how they wished they had tried it but never did. Remember that.

Entrepreneurship is about embracing uncertainty as a lifestyle.

There will always be ups and downs. To deal with this I have what I call an emotional control chart. I celebrate the wins, but don’t get too drunk on them. Similarly, when failures happen I don’t get down, but gather the lessons learnt and keep working. Persistence is what breeds success.

From Kryo Beshay Jul-31-2015 https://twitter.com/kyro/status/627250292116078592 It’s in my office to constantly remind me and keep me focused on what matters. Thanks Kryo!

Not many other jobs offer the same level of experiential and exponential growth.

I moved to a new country, started a business, immersed myself in a new work culture and learned a new tax system along they way! I’ve done aspects of business I’ve never had to do before – digital marketing, accounting, business operations, procurement processing, company legislation and healthcare policies. The list is endless, but so has been the growth.

I’ve learnt new skills, and learnt by doing. I’ve discovered new things about myself I never knew existed (good and bad) but it’s been great. I’m more self-aware, confident and humble. No other job has offered me this level of experience. That alone has been worth the investment.

Do everything manually, then decide what to automate.

When I was a developer I learned the hard lesson of automating too early. Automating removes you from the process and prevents you from learning more from it. When you experience how each aspect of a business operates you understand how it works. By feeling the pain you develop context to make better decisions on what to outsource, automate, or stop doing altogether.

Doing expenses still sucks but I have a much better insight into where expenses come from and go to. Doing things manually helps me to build that context and understand the process. Then I can decide how to handle it going forward.

Find a mentor, or even better find a few.

I’ll never have all the answers. No one does. Mentors won’t either, but the best ones know that. Their role isn’t to provide me with answers, it’s to help me ask better questions – of myself, my direction and business purpose.

I’ve been lucky to have a lot of great people share words of encouragement and advice with me over the last year – my late cousin Philip J. Moore specifically. Thank you to everyone who made time to help me. The list is long. I hope it continues to grow and I give a little back in return.

Entrepreneurship can be a lonely existence. Don’t be afraid to reach out to people for support and advice. And try to share what you’ve learned with someone you know who is starting out. Mentoring other people is as powerful, if not more, than receiving guidance from others.

Have a small trusted group of people for collaboration, discussion and support.

Having a group of people I respect and admire to test crazy ideas, hypotheses and thoughts with has been invaluable. Their social, emotional and operational support is essential. My group started with a few people in a Slack group. We help and encourage one another, and collaborate on all sort of initiatives. It’s a community I never would have discovered without changing my circumstances, and I couldn’t be happier with the result.

Your network is a great source of business opportunity and growth.

My personal network is a source of hidden strength and has rescued me at least twice. Building and nurturing that network is one of the best investments I’ve made. Seek out interesting people, with a growth mindset and appetite for learning. The future belongs to folks like that.

The people I’ve enjoyed working with are the people I want to continue to work with in the future. Value great working relationships when you find them because they are difficult to find.

There isn’t just one shot, there are many.

Many people mistakenly believe that you only have one shot at success. That introduction, that meeting, that deal. There’s nothing further from the truth.

Entrepreneurship is about life, and life is about growth through learning experiences. Sometimes things I’ve tried have worked, other times they haven’t. The trick is to pick yourself up, dust yourself down and ready yourself for your next shot when it comes around, because it will come around.

As my cousin Philip always said, “If you are still breathing, you haven’t failed. Make sure you learn something for the next spin. Take the night off, send your special someone some roses and go out and see something to inspire you.”

Today, I found myself at a rock garden in Kyoto. Tomorrow I’ll start year two.

Talks At Google: How ExecCamp is tackling Business Transformation

I was recently invited to Google to share my experiences of working with executives from leading global organizations who have taken part in ExecCamp.

ExecCamp is an ‘intervention program’ where executives leave their regular roles for 4-8 weeks with the goal of launching new businesses to disrupt their existing organizations.

The purpose of ExecCamp is to provide executives with a deeply immersive experience in which they can develop new skills and capabilities to transform themselves and their organizations.

By embracing Lean Enterprise principles and learning by doing, ExecCamp helps business leaders explore the intersection of business model innovation, product development, organizational design and culture transformation.

10 Principles Of Business Transformation

Transforming organizations, teams or even yourself is challenging. There’s no one-size fits all method to achieve success. It’s a combination of hard work, persistence and patience.

The most successful enterprises are continually experimenting to learn what works and what doesn’t. They focus on meeting customer needs by clarifying goals, shortening feedback loops and measuring performance based on outcomes, rather than outputs.

To become a high performance organization you must develop the capability to continually adapt, adjust and innovate. This requires a deliberate practice of experimentation and learning.

But experimentation alone is not the answer. To enable and empower decision-making at scale, team members need a framework of reference to align their actions to the organization’s mission. The mission is the statement of purpose for what your organization stands for. The principles help individuals and teams to make independent decisions at speed that are aligned to the organization’s mission, valued behaviours and desired culture. It is not a set of explicit rules or command-and-control statements of how people should operate.  

Based on my own experiences I’ve distilled a set of 10 Principles Of Business Transformation to help businesses on their journey to become high performance organizations.

Think BIG, learn fast, start now

Every great mission needs a compelling and aspirational vision. The clarity with which you communicate the vision gives people purpose, direction and constraints as to why the initiative they are taking part in matters. Thinking BIG means challenging assumptions of we believe may even be possible.

For example thinking BIG at SpaceX is, “SpaceX designs, manufactures and launches advanced rockets and spacecraft. The company was founded in 2002 to revolutionize space technology, with the ultimate goal of enabling people to live on other planets.”

However a vision is a theory, a set of beliefs and untested hypotheses that must rumble with reality.

In the information-age the organization that can most effectively accumulate new knowledge, and leverage that insight to make better decisions wins. Organizations with the highest quality information make the best quality decisions. To accumulate new knowledge we must experiment. By experimenting we learn. Whoever learns the fastest wins.

Be uncompromising with the BIG vision, but develop methods to learn fast what works and what doesn’t. Start testing the BIG idea with real customers and users as quickly as possible – even when it’s feels early and uncomfortable.  

Secure mandate, sponsorship and support

You will only be as successful as the level of leadership in your organization that gets behind the initiative. If there’s no support in the team, the leadership or executive group, then forget it. That said, making innovation only the CEO’s job isn’t going to cut it either.

If you want to be a leader of change it’s your responsibility to create the space, support and sponsorship to enable experimentation to happen.

Do this by focus on outcomes not outputs. Define constraints, limit investment, or risk thresholds to create safe-to-fail experiments. This creates a sandbox for learning and will result in demonstrable evidence of progress. It allows teams to explore uncertainty within the bounds of recoverable situations, reducing learning anxiety and paralysis from the fear of failure.

“If the highest aim of a captain were to preserve the ship, they would keep it in port forever.” – Thomas Aquinas

Right people in the right place

Putting change-averse people into a high change environment won’t break the system, it will break the people.

Similar to Geoffrey Moore’s model for technology adoption, there are all types of mindset in an organization towards change, from innovators to laggards.

Geoffrey Moore: Crossing The Chasm

Be aware of people’s natural bias when it comes to building teams capable of dealing with extreme uncertainty and frequent iteration. High performance teams start small with a cross-functional representation of business, technology and design. This is the nucleus to build a team around.  Be deliberate about how you form the team and the type of work – be it highly exploratory or otherwise – they focus on.

Act your way to a new culture

John Shook was the first American to be hired by Toyota. He moved to Japan in the mid-70s without knowing a single word of Japanese, only a curiosity to learn about the Toyota Production System. What he observed contradicted everything he had seen and heard in Western organizations. The Western belief was if you told people to think differently they would suddenly act differently.

What Shook actually experienced at Toyota was that changing the system of work is what led to a change in the way people behaved. People didn’t think their way to a new culture, they acted their way to a new culture. This is what SCRUM, XP and many other agile methodologies actually try to enforce – a change in the system of work using iteration, ceremonies, reflection and cross-functional teams to change how people interact and ultimately behave.

Sadly many organizations still believe that sending staff on a one or two day certification course can suddenly make them agile, adaptive and aware. Often the result is people blindly following a methodology of what to do without ever understanding why they are doing actually it.  

Build the right thing, then build it the right way

Working software is an experiment, just a really expensive one.  

Unfortunately building the entire solution and only then testing it with customers is still the prevailing model of operation for most organizations.

One of the key components of the Lean Startup movement championed by Eric Ries is to encourage teams to test their business hypothesis as quickly and cheaply as possible. This is achieved by creating a Minimum Viable Product (MVP) – a basic early working example, prototype or experiment to test the area of greatest uncertainty related to the hypothesis.

Diagram inspired by Jussi Pasanen, with acknowledgments to Aarron Walter, Ben Tollady, Ben Rowe, Lexi Thorn, and Senthil Kugalur

A MVP approach enables you to fail fast and cheaply, while also gathering valuable data from the experiment. As you prove or reject different hypotheses, you build confidence that the problem/solution fit is on the desired path. You can then invest more to improve the fidelity of the solution, widen the marketing reach and/or enhancing the solution based on the data gathered — essentially increasing your exposure to risk in a controlled manner.

Deliver small, fast and frequently to build momentum

One of the most important aspects of agile and lean methodologies is working in small batches. Reducing the size of work batches enables us to optimize for end-to-end throughput of our system of work. This allows use to gather data against the outcomes we achieve and compare them to our initial expectations of success.

Secondly, the data we collect becomes inputs for reflection, decision-making and adapting strategies. How are we moving toward the desired outcome? Should we adapt the objective of our original mission? It’s how doing and learning enables better top-level decision making, not just in the execution of a given solution. The longer we wait to collect data to inform our next steps – especially when operating in extreme uncertainty – the higher the level of risk we are exposed to.

The best way to build trust with stakeholders is with frequent demonstrable progress. Showcasing small, completed pieces of work fast and frequently creates feedback mechanisms, trust and belief that team members can deliver.

Teamwork is about trust. Trust is about believing in your team members to deliver. You create belief with frequent demonstration of progress

— Barry O'Reilly (@barryoreilly) March 30, 2016

Build in feedback loops with customers and users

Customer testing should be for breakfast, not dessert. If you’re not testing with customers as soon as possible to understand if their problem really exists and that your solution addresses it, then you’re wasting valuable time, effort and resources.

The best people to provide feedback on your hypothesis are real customers – not your boss, or colleagues, or even team members. Regular and direct customer feedback is your  guide towards fit, purpose and success. Make sure you design a system of work that gives the team frequent opportunities to test and incorporate customer and user feedback.

Following a recent ExecCamp, one of the participating executives sent me the following note:

“One of the team came to me today to ask to review the new designs for a system we’ve been developing. After ExecCamp the response was obvious to me… “I’m not the person you need to be testing with. The real people you need to talk to is our customers. Go find a few of them and get their feedback for what works and what doesn’t.”

Adapt your approach based on validated learning

Lean and agile aren’t just about experiments to create new knowledge, they’re about using that knowledge to make better and more informed decisions on what to do next.

Many experiments will ‘fail’, but even these will result in validated learning. Validated learning means that we test — to the necessary degree of precision and no further — the key assumptions behind the hypothesis to understand whether or not it will succeed, and then make the decision to persevere, pivot, or stop.

By defining and communicating what success looks like before we start we create an accountability loops to decide  if and when our initiatives are getting traction based the outcomes achieved.

Organizations that fail to define success before experimenting get caught in Plan->Do cycles, only validating outputs. Their success is on time, on budget, on scope without any learning mechanism to ask the questions; Did we achieve the outcome we expected? Are we getting better?

Demonstrate evidence for future investment decisions

Writing a well-crafted business case may secure initial funding, but it has little impact on whether your initiative actually succeeds or fails. As Douglas Hubbard documented in his book How to Measure Anything, the two biggest risks to any new initiative are not how much it costs and when will we deliver it but reducing the concern that the initiative will get cancelled and will our customers or anyone use it?

What’s important when making investment decisions is to take an evidence-based approach to ongoing funding by creating an evaluation framework to manage and prioritise future investments.

The cadence of iteration and review should match the level of uncertainty. For example, in financial markets traders get continuous and virtually real-time feedback on how the market is adapting in order to make further investment decisions and improve their probability of success. In contrast, an organization with an annual planning cycle and quarterly review process has only four iterations or feedback loops a year. In my experience, when working in a highly complex and adaptive environment four learning cycles per year is rarely sufficient.

You can minimize risk, uncover options, and get the best return on your efforts by using techniques such as customer testing, pre-defining measures of success and setting investment boundaries around time, effort and scope. This builds in regular feedback loops for course correction or close.

As I’ve said previously in blogs and talks on agility in financial management – It’s time to blow up the business case.

Scale lessons learnt to cross the chasm

Scaling agile practices or frameworks doesn’t work – scaling learning does.

Teams learn best from the lessons of their peers. What challenges did they face? How did they address them? What would they do differently?

People remember stories and take inspiration from the experiences of others. Start by encouraging teams to showcase their experiments, discoveries and next steps. Make it easier for everyone to learn from one another, build momentum and drive change.

As a leader, your responsibility is to enable organizational learning by reducing collaboration friction between teams and designing systems of work with in-built learning mechanisms. The purpose of a learning organization is to help others make better mistakes, not the same mistakes.

Thanks to Qiu Yi Khut and Jonny Schneider for their feedback on initial drafts.

For more on these topics and theme read my book, Lean Enterprise: How High Performance Organizations Innovate At Scale, or follow my blog or Twitter

References

• How to Measure Anything by Douglas Hubbard
• Crossing The Chasm by Geoffrey Moore
• NUMMI story by This American Life on including John Shook
• Lean Enterprise: How High Performance Organizations Innovate At Scale by Jez Humble, Joanne Molesky and Barry O’Reilly

Lean Enterprise: closing the loop with Japan

I’m delighted to announce the release the Japanese translation of my book, Lean Enterprise: How High Performance Organizations Innovate At Scale.

Firstly, I wanted to thank Masanori Kado for his commitment, desire and willingness to spend late nights and long days translating the entire book. It is a selfless task and highlights his passion to bring the ideas captured in the book to his local community and native language. Thank you Masanori.

Secondly, thanks to O’Reilly Media Japan for their supporting in publishing the book in the Japanese market.

The book has now been translated into Japanese, Chinese and Portuguese (Brasilian). I’m continually amazed by the international interest and impact the book has had.Thanks to all that have read it, shared it and encouraged others to pick it up across the world.

Finally, I’m excited to announce that I will be in Tokyo on October 27th to speak at an event to officially launch of the book in Japan.

I will be spending the majority on October in Japan visiting Toyota and other businesses in the country.

Get in touch if you would like me to speak with your leadership team or company.