The New Imperatives for a Modern Business

Kevin Donaldson

If you like these cartoons – they are created by Hugh MacleodSee Hugh’s entire gallery at http://gapingvoid.com/

About the Speaker

Twitter: kevnd

kevin@donaldsoncrew.org

Ent. Community

My company/industry is stable – it has been

around for X yearsWe know what's best for our customers

We are big enough where there is no

risk from small startups

We have been successful up until now so why

change a working formula?We have all processes

in our organization mapped and everyone

knows what to do

Familiar?

• ‘Global’ can apply to anyone• Disruption is coming to an industry near you• Wicked Problems are common• Chaotic Environments are normal• The nature of ‘employment’ is changing• Intersectional Innovation happens more easily• Geographic boundaries are meaningless

It’s a New World

• Recording industry• Newspaper industry• Book/magazine publishing• Television• Telecom• Energy• Automotive• Education

What was once stable…

Your organization need to match the relative stability of your environment

Intrinsic Motivation

Organizational Agility

Customer Development

How

WhyWho

What

3 Imperatives

WhoCustomer Development

You must attack your assumptions at all times

(You) Our Product is Awesome

(Customer) Your Product is Awesome

This is Good…

This is what you want

(Customer) I am Awesome!

[because of your product]

Product Development

Concept/ Bus Plan

Product Development

Alpha/Beta Test

Launch/1st Ship

What’s wrong with this model?

Customer Discovery

Customer Validation

Customer Creation

Scale the business

Pivot

Question your core business assumptions and find a market

Customer Development

Example

• File sharing across computers• Hostile environment – many competitors• MVP: Learning vs. Launching• Put something in users hands to get real feedback• Know where your target audience hangs out and speak

to them in an authentic way• Make something you will use• If your customers don’t think they have a problem –

hard to pitch a solution• Traditional marketing isn’t always the best approach

Example

• First Pivots– market interest but expectations between cost and value not aligned

• Second Pivot – found an early adopter/paying customer; no additional customers

• Third (current) Pivot – new product; early adopter /paying customer to fund development

• Currently 20+ clients with thousands of users; approx. at transition of customer validation and customer creation – still carrying out micro pivots

• One Learning: In our market, software alone is not enough to satisfy the customer need

Your opinion, while interesting is irrelevant

The Customer Feedback Pivot

Idea

Build

Product

Measure

Data

Learn

WhyIntrinsic Motivation

‘Flow’ is a single-minded immersion and represents perhaps the ultimate in harnessing the emotions in

the service of performing and learning

The carrot and the stick no longer

have the power they once had

TaskTime

TechniqueTeam

the urge to get better and better

at something

that matters

Autonomy PurposeMastery

Yearning to do what we

do in the service of something larger than ourselves

Example

• Google 20% Time• The real value of 20% is not the time, but rather

the “license” it gives to work on things that aren’t important

• Open Culture and a quest for the pursuit of ideas

• Gmail, Google news• Larry/Sergey: Montessori school philosophy

influenced their ideas on 20% time

• Autonomy is required to support agility– Agile software dev practices promote autonomy– Team decide on ‘tasks’ to support goals

• The Morning Dig: to provide individual focus time• Hiring process helps select intrinsically motivated people• Small teams eliminate slack and support a drive to mastery• A mission that supports a larger purpose – why before

what

Example

Kevin’s Theory On CreativityC

reat

ivit

y

Work Time

40 hrs

Level/Type of Mental Stimulation

Intrinsic Motivation Drivers

Most Organizations

Effectiveness/Efficiency Inflection Point

HowOrganizational Agility

Can organizational design be beautiful?

Small is the New Big• If you are small…

– Elance.com, Alibaba.com, cheep/free software tools remove location constraints

– Flat/elegant organizational design – don’t just create a doll house company

– Don’t be ashamed of being/staying small– Focus, focus, focus

• If you are big…– Create autonomous business units– Force teams/departments to function like startups– Constraints drive creative thinking– Move to Agile execution

Business Model Agility

“Agility…execute your OODA loop

more quickly than your adversary”- USAF Colonel John Boyd

Agile Thinking

Process & Tools ComprehensiveDocumentation

Contract Negotiation Follow the Plan

People & Interactions Results Customer

CollaborationRespond to

Change

Team Vision & Discipline

Validated Learning's

Customer Development

Initiate Change

Example

• History– Started in 1999 as a 3 person web consulting firm– 2004 – decided to build project mgmt software for themselves

for use with clients– Clients wanted the software for their use

• Over 3 million users, millions in revenue• Intentionally small – 16 people spread across 8 cities and

2 continents• Invented and open sourced ‘Ruby on Rails’• Build products that intentionally are light on features• No long term plans because they are scary and usually

wrong

• Success in using Agile for Product Development• Using Agile (Scrum) as a management framework across

the business• Annual Strategic themes > Quarterly Goals reviewed each

quarter, translated into monthly or bi-weekly sprints• Add process when needed – test first• Capital constraints force agile thinking• One Lesson: Getting good at agile execution can put too

much emphasis on throughput and actually enable a lack of focus

Example

Organizational Rhythms

Daily

Weekly

Monthly

Quarterly

Annual

Intra-day (Drive Gear of the Company)

Mapped processes take you a step

closer to business commoditization

Lets Review

Intrinsic Motivation

Organizational Agility

Customer Development

Idea

Build

Product

Measure

Data

Learn

Cre

ativ

ity

Time

Who Why

How

Books

Enlightened Discussion

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