Last week I spent two great days in Brighton at the The Lean Event and here is what I learned. Lean is a strategic system that combines principles, activities and artifacts to make better decisions about how to create customer value. The Lean Event provided a pocket guide to creating and operating within such a system.
Complex adaptive systems
Lean strategy views business in a different light from what was common in previous centuries. The world should no longer be thought of as a machine that can be known, optimised and planned for, but instead we should think about it as a complex adaptive system. This new world is forever in motion and demands constant exploration and adaptation. Lean strategy aims to be what Ed Catmull (quoted by Melissa Perri) called ‘a balance between clear leadership and chaos’.
Strategy is a bet on the future, a hypothesis about how the consumer landscape is going to evolve — Roger L. Martin
One way to provide clarity without rigidity are principles. A foundational principle of Lean is that every statement about the future should be seen as a hypothesis. Creating hypotheses allows us to move away from spending many weeks designing a product before we reveal it to the customer, and encourages the creation of prototypes and experiments to find out if the customer actually values what we are planning to make.
A principle that Jeff Gothelf discussed was that business value equals customer value (or in the words of Peter Drucker: ‘The purpose of business is to create and keep a customer.’). Any activity in a business that does not contribute to more and happier customers, either in the short or long term, should be questioned.
From this followed Jeff’s next principle: prioritise learning over delivery. It’s more important to learn about what customers value than to ship more stuff more efficiently. We first need to find out what people value enough to pay for, before we invest our time into building products that might end up on the shelf. This ties back to the idea of a complex adaptive systems, where the outcomes of your actions cannot be known in advance, which forces us to continuously check if our current offering still meets customer needs and if there are other ways we can provide value.
Themes and metrics
One benefit of the machine-age system is that it provides clarity about what should be done and what success looks like, but this clarity is deceptive, because it is based on overestimating the amount of certainty we can have about the future. Lean aims to move beyond these clear but flawed commands and yet avoid chaos by providing themes and metrics.
Themes, argued Jared Spool are much better than features to create focus around what should be done in the future. Because themes are descriptive and not prescriptive, they make it clear what is expected as an outcome, but don’t limit people in how this outcome should be achieved. For example, instead of stating that next quarter we will build a chat function on the homepage, we can state that we want to focus on the theme of creating more conversations with potential customers. Themes can be found through customer interviews, analytics and usability testing; they are areas where there’s often a clear opportunity to provide more customer value. They allow management to set directions while at the same time encourage experimentation by the individuals who have to deliver the work.
Metrics, as they were promoted by Ben Yoskovitz and Chris Matts, provide another way to create alignment on what matters. Ben promoted the idea of an OMTM: one metric that matters. Sticking to one metric allows everyone to focus on the same thing. Chris argued that we should choose the metric but not the expected value of this metric (a KPI). For example, do say ‘this quarter we want profit to go up’, but do not state by how much. A metric creates freedom for experimentation, since individuals can decide what they want to do and how to do it as long as they focus on the metric. A fixed KPI, on the other hand, encourages people to become risk averse. One easy way to make profits go up, for example, is to cut costs and delay investments. However, this would make them hit the short term goals, but wreck the business in the long term. Metrics connect well with themes; they create clarity of direction and enable freedom of execution.
The more I empower my staff, the better my results were — Raffi Krikorian
To make use of principles, themes and metrics you need a shared set of values, a framework that defines how you will play. Jane Austin delivered a great talk on how to create an environment that works around openness, autonomy and empowerment. Interestingly, these are very much aligned with themes that make people happy at work. Freedom on the one hand and clarity of themes and metrics on the other hand make it possible to work autonomously while still adhering to the larger organisational aims. Jane echoed Ben Yoskovitz’s statement that Lean allows business leaders to move from providing the right answers to asking the right questions (preferably early and often).
Jeff Gothelf furthermore suggested that to make values such as transparency, autonomy and empowerment meaningful they need to be tied to rituals — activities that take place with regular intervals — such as daily stand ups, weekly sprint planning and retrospectives and quarterly away days. Other important activities can be regular access to customers to interview and test ideas with, and access to analytics for everyone.
Artefacts connect people and provide visibility over time. Lean uses some well known artefacts such as personas and prototypes, but The Lean Event especially highlighted maps.
Jared Spool and Roman Pichler both discussed the idea of roadmaps filled with themes as a way to bridge the gap between the clarity of planning features and the wide ocean of providing customer value. Roman further argued that roadmaps provide a continuity of purpose, facilitate stakeholder collaborations and help with prioritisation. Even though theme-based roadmaps don’t appear to be very precise Roman jokingly quoted Keynes by stating ‘it’s better to be roughly right, than precisely wrong’.
It is better to be roughly right than precisely wrong― John Maynard Keynes
Jiri Jerabek gave an example of generating a customer experience map as a shared activity over time instead of a reclusive one off activity done by a headphoned researcher at a computer.
Overall the two days showed a broad variety of themes and ideas that all tied together magnificently. Count me in for next year.