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5 Things Leaders Must Do To Empower Lean Startup Continuous Innovation

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Lean Hero’s Journey

Read Eric’s Book

Fail to Rally Support

Small Win

Business Revolts

Big Success

Cultural Change

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An organization's ability to learn, and translate insight into action rapidly, is the ultimate competitive advantage.

BRANDING LEADS THE WAY EXISTING MARKET PROBLEM WELL UNDERSTOOD INNOVATION IMPROVES DIFFERENTIATION INCREMENTAL CHANGE

PRODUCT LEADS THE WAY UNKNOWN / NEW MARKET

PROBLEM NOT WELL UNDERSTOOD INNOVATION IS DRAMATIC

RADICAL CHANGE

Innovation Continuum

Innovation ContinuumFINANCE

BRAND

LEGAL

COMPLIANCE

IT

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WALK BACK FROM WALL STREETNumber One

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No legal requirement exists for publicly-traded companies to

maximize returns to shareholders.

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Behavior Incentived• Lower costs • Increase productivity • Increase sales • Quarterly profits

This can only happen in existing markets.

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Behavior Not Incentived• Understanding customers’ needs • Taking risk • Learning • Iterating on ideas to get them right

In other words, all the requirements of Innovation.

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Actions• Tell Wall Street you’re spending x$ on

innovation that will lessen near-term returns • Compensate senior leaders for investing in

innovation • Incentivize entrepreneurial activities

Lessen the financial barrier to Innovation

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CREATE A CULTURE OF SAFETYNumber two

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COMPLACENCY PASSION

APATHY FEAR

Urge Bold Behavior

Prov

ide

Secu

rity

Bold w/o Safety = FEAR

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Actions• Consciously reduce “fear of failure” through

language and performance management • “Take arrows” for the innovators • Work with functional support organizations • Walk it like you talk it

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REIGN IN THE LAWYERSNumber Three

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US Constitution“To promote the progress of science and

useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

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Patents are a Vanity Metric• Universities & large enterprises

love to tout the # of patents they’ve earned.

• There is no VALUE to society in the patent itself.

• This is how Marketing took over “Innovation”

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Patents Slow New Value• Patents are written for lawyers, not innovators • Patent litigation reduces profitability • Used often merely as protection • R&D stops research at issuance • Intellectual property rules run amok

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Food for ThoughtYesterday, there was a wall of Tesla patents in the

lobby of our Palo Alto headquarters. That is no longer the case. They have been removed, in the

spirit of the open source movement, for the advancement of electric vehicle technology.

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Actions• Incentivize commercialization testing • Measure progress via LS validated learning • Establish legal guidelines for LS rapid

experimentation • Teach LS to Legal to increase value

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MENTOR NOT MANAGENumber Four

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Mentor vs Manage• Manage when in execution mode

– Mentor when searching or learning. • Manage when working with the “known”

– Mentor when dealing with uncertainty.

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Action: Lean Startup Mentors• Inspire • Encourage risk taking • Pivot or Persevere? • What’s the riskiest assumption? • Experiment to overcome conflict

Mentoring is creating the environment for insight

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LEAN STARTUP FOR MANY, NOT A FEWNumber Five

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Competitive Advantage• Better customer satisfaction and passion • Improved internal processes • Experimentation reduces “fear of failure” • Culture change = continuous innovation

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Actions• Go beyond accelerator programs and

innovation teams. • Teach everyone lean startup, from

Accounting to HR to Product teams • NOT everyone will be innovators, but

innovation can come from anywhere

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So, Why Take This On?

26

Your company needs you. The WORLD needs you!

It’s (potentially) HUGELY rewarding. It’s hard, but fun.

EMPOWERING. CREATIVE. INSPIRATIONAL.

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Thank you!@BrantCooper

brant@movestheneedle.com