Five key lessons for corporates from an Entrepreneur in Residence

- June 1, 2016 8 MIN READ
Entrepreneur in Residence

At 5ft tall, most of my life has been informed by my being petite – my nicknames growing up, my dating life (I tend to prefer taller gentlemen…), my choice of furniture and the now infamous height of my heels. The last thing I thought would be informed by smallness would be my career. And yet, I have carved a whole career path by embracing minuteness. Namely, getting big things done by starting with the tiniest of things.

As an Entrepreneur in Residence, starting from little things has become a mantra. In fact, the hardest part of being the lean engine inside a large organisation is convincing the people in it that small things are worth paying attention to. And I’m not even talking about MVPs; I’m talking about cultural changes at the individual level.

The secret to lean transformation is that it is, above all else, a cultural shift. The values, practices, and systems that got an organisation to its current state – slow, risk averse, stale, fearful, insular – have to change in order to let new practices in. If we think about adopting lean enterprise methodologies as learning a new language, then we have to make sure that every person in the organisation can speak it, understand it and navigate its nuances. This has to be done one person at a time; arguably the smallest unit at a large organisation: a single employee.

It’s not enough to put posters on the wall and make aspiration proclamations for “collaborative cultures” and “disruptive innovation.” Cultural change doesn’t hang on the walls – it lives in the individual decisions each employee makes, in how he or she talks about work, how he or she feels performing it and what drives him or her forward. If we agree to take this view, then starting small makes sense.

When I go into an organisation, I often find that this type of work is met with skepticism. The notion of an Entrepreneur in Residence sounds wacky and plays to the “buzzword bingo” of the current #IdeasBoom. The truth is that the endgame for corporate cultural transformation and the iterative learning of a startup are eerily similar. Both type of organisations are learning to learn. Beginning with small lessons is the only way to go.

So, you ask, what is the smallest thing you can do to get this transformation started?

My answer is…learn how to use a lean canvas.

I wrote a column in 2014 with some tips and advice around tackling your first Lean Canvas as a founder. Since then, I’ve had the chance to apply these principles in larger organisations, including corporations and universities. The lessons are similar but the applications differ greatly. As opposed to startups, large organisations tend to want to fix internal problems, at least at first. Therefore, the implementation of lean enterprise tends towards being inwardly gazing. They are their own customers. This presents its own set of learning challenges – just as human as a startup’s, but observed through a different lens.

I have found a pattern of ten concepts that are difficult to grasp as a large organisation adopting lean startup as an operating principle. Let’s explore the first five…

Your Customer is a Person

A customer is a person with a problem, not an employee with a title. When I say “a person”, I mean “a fully formed human” with motivations, needs, wants, and autonomous behaviour. This is important to distinguish because large organisations tend to view their internal customers as “departments” and “teams”.

Let me explain. As the EiR for the ABC’s Technology Division, I implemented the first technology outpost to tackle a journalist pain point: real time news gathering. It was the first lean startup initiative undertaken at that level, so the stakes were high. When the Technology and News divisions went into the Lean Canvas workshop for this project, the customer was simply identified as “journalists at the ABC.” Rookie mistake. As the first lean canvas session unraveled, questions starting popping up: What kind of journalist? How long have they been at the organisation? If they leave the ABC, will they continue to be a customer? What’s important to them? Is technology something they think about? Is technology something they want to think about?

The lean startup way of approaching this Customer would have been to start with who they are and what’s important to them. Here is an example of how a lean startup practitioner might have approach this Customer assumption:

“He/she is a field journalist, early tech adopter. Has an iPhone/Android (company provided tool-of-trade). Their favourite part of their job is working with the crew. The most important thing to them is getting to the story first (not necessarily in-depth). They get joy from celebrating a news break. They have to make the News Director happy and proud in order to advance in the organisation. They worry about being scooped in a story. They value speed and efficiency above all else, they consider themselves storytellers and creatives.”

If your assumptions are right, you can immediately determine what this cohort’s priorities are at a behavioral level (speed, efficiency), what they value (which will lead you to what they are willing to pay money for), where they operate (in the field), what they need to do above all else (make the News Director happy and proud), and what they want to achieve (the news break!).

By testing these assumptions you will whittle down some (perhaps they don’t value efficiency as much as speed or they see the News Director as a blocker rather than an enabler), and add others (they are mostly between the ages of 35 to 50 or they only get an hour’s notice to cover a story…).

Many organisations have a silo problem – which is really an empathy problem on steroids. There is a distance created between people and teams, so there is no need to get to know them as human beings. There is a comfort in the assumptions made by teams about other teams. “The tech support team are meanies!” “The sales team are a bunch of self-serving wankers!” “The accounts team only think about invoices, what do they know about anything else!” We’ve all heard it.

The important thing to remember is that understanding your customer’s behaviour and motivations is crucial to starting a functional lean process. The beauty of the lean canvas is that everything in it is a hypothesis. It’s not only okay to be wrong, we expect that you’ll be wrong 90 percent of the time. Learning you were wrong is part of the process.

The Lean Canvas is a Test Lab

If you think about the lean canvas as a test lab, each slot is a test tubes. You will need to fill out those test tubes with assumptions, but only assumptions that you can test right now. Everything else (all your “change the world” plans!) should go on the 10 BIG IDEA slot. If your current lean canvas template does not include a BIG IDEA slot, add one immediately! You’ll thank me later…

The secret to running a good lean canvas is to know that you’ll have many iterations. You will need to test one assumption at a time and iterate accordingly. Focus is the key. Are you testing whether your have the right Customer cohort or if your Problem is actually painful enough for your Customer to take action? Are you testing your Cost assumption?

Once you get the hang of it you can start testing the relationship between two slots. If you change your funding strategy, would that change who your customer is ? Would the way the solution is delivered affect what metrics you track ?

The lean canvas is that it doesn’t let us escape the relationship between our test tubes. This is especially important in a multi-departmental organisation as this will sprout empathy between silos. Individuals will discover that they are all linked and that considering the full scope of decisions is important. With some luck, they will start seeing “competing silos” as peers as they go through this discovery process and silos will slowly start crumbling down!

Your Solution doesn’t need to be tech-based

Technology is just a tool. This is where a lot of us get stuck. Technology has become so ubiquitous that it has actually become a distraction when trying to test initial solutions. Everybody wants to build an app! Everything will be solved with a new platform! But take a step back and remember that technology should be an enabler for value, not the endgame.

I have seen many brilliant founders get bogged down by what technology can deliver instead of being truly creative and coming up with something new. In the case of corporate intrapreneurs, the possibilities are even more exciting – what if you solution was not a platform but a person? What if the solution was creating a new role to enable value for your Customer? What if it was an event? A meetup? A flyer? A crossword puzzle? A puppy party?! I hope it’s a puppy party.

Technology is our favourite tool, but it shouldn’t limit the fun! A big part of my job as an EiR is to enable creative thinking outside of technology solutions. What else does your team have in their toolbox?

You’re not Santa Claus

You are not tasked with delivering the perfect present to every boy and girl in the world in one night. Don’t try to be everything to everybody. You’ll exhaust yourself and get cranky; there is nothing jolly about that! Instead, focus on one little cohort of people you can service and get feedback from, then add another and another. I recommend the Pizza Test (used by Amazon and Zappos): if you can’t feed your initial testing group with 2 pizzas, it’s too big.

If you ultimately want to service “All Technology Employees” or “all ABC journalists”, that is a worthy and lofty goal. Pop it on 10 Big Idea and test your way there!

Instead, be the Tooth Fairy. The Tooth Fairy, at least when I was growing up, gave $1 to little boys and girls who have lost their first tooth. She would do this only at night and once the kid had gone to sleep (provided that the parents are comfortable lying to their children…). The Tooth Fairy has a very focused market, with a lifetime customer value and a specific customer cohort. So in your next big product meeting as yourself and your team: Are we being a Santa Claus or a Tooth Fairy?

A Problem belongs to a Person (your Customer)

The problem is a pain point that belong to a person. That person, in turn, finds value in having the problem solved. As simple as this sounds, it is very common for large organisations to confuse “broken solutions” with “customer problems” when trying to uncover an internal problem to solve.

This is a tricky one, so let’s unpack this together.

My Telstra phone stopped working last week. I didn’t drop it; my account was up to date, my software had been upgraded…it just stopped working. I spent an hour with Telstra on the phone trying to get to the bottom of why it had stopped working and how they could repair it. Needless to say, the process was long and unpleasant. I couldn’t find the right option on the IVR; I kept being bounced from one department to another; customer service seemed to be frustratingly uneducated as to whether the problem was the Telstra network or the Apple device. It was a nightmare.

The next week, I brought this up with one of the ABC teams going through our innovation training program and asked them what they thought the problem to solve was. The initial reaction predictably were “the Telstra IVR is confusing” or “the process is too long and has unnecessary steps” or “their customer service needs a better way to share notes…” But the truth is that the problem was the fact that I, a Telstra customer, was without a phone.

Yes, the IVR was confusing. Yes, the process was convoluted and long. Yes, the customer service representatives had little knowledge of their own products. But none of those are customer problems – they are broken solutions.

Employees in a process-driven organisation often fall into the trap of confusing broken solutions with customer problems. They also tend to think that a “lack of my solution” is a problem. A common one I encounter when I start any type of EiR engagement is: “There is no central platform to lodge employee ideas.” Is that really the problem? Or is it that employee ideas are not valued enough by management to have a dedicated system to enable them? Or that nobody has allocated a budget to adopt new ideas? Or that employees are too busy doing their “real job” to develop ideas enough to be put through an adoption process?

Problems are linked to people’s behaviour, motivators, fears and blockers. Broken solutions are linked to systems and processes. Focusing on broken solutions is symptomatic of a myopic organisation, which is a fancy word for “short sighted.” As this suggests, the solution is to look at the problems though a different lens: customer empathy. As you become more familiar with the process, you’ll find that empathy and connection are the sharpest tools in any corporate innovation toolbox. Unfortunately, they are often the most ignored.

Do these problems sound familiar to you? I’d love to know how you all are tackling these challenges. There is no one-size-fits-all solution for lean enterprise transformation. The last two years have certainly been a steep learning process for both me and the organisations I work with. The lean startup journey is one full of humbling moments and sharp corners. I hope sharing our lessons will help us embrace the lean enterprise and how to enable individuals to make those changes, one day at a time. In the meantime, let’s start celebrating the power of starting small!

Image source: owned.