Driving Lean Innovationin Agile TeamsPresented by Arlen Bankston

Arlen.Bankston@LitheSpeed.com

@abankston, @lithespeed

About MeArlen Bankston• Co-Founder of LitheSpeed, LLC• User experience & product development

background• 15 years of Agile experience• Lean Six Sigma Master Black Belt• Lately 40% training, 20% each of coaching,

product development & management

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• Sensei Story• Agile Blues, Lean Startup• Lean + Agile Innovation

• Holistic Discovery• Risk-Driven Product Backlog• Exploratory Sprints• Data-Driven Sprint Review

• Lean & Agile at Established Companies

Agenda

“Life’s too short to build something nobody wants.”

Ash Maurya, Lean Entrpreneur, Author of Running Lean.

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Sensei Story

http://www.senseitool.com

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First, an Idea!

Sensei is an Agile retrospective tool by LitheSpeed. www.senseitool.com

A tool to facilitate Continuous Improvement via the Scrum Retrospective

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Quickly built a prototype

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And, we took it on the road

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Everyone said this was the best thing since…

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And so…

Built, Built, Built

Built some more

Lost our Team, Got

a New Team

Build and they will come?

Customer Discovery

Feature Development

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Agile Blues, Lean Startup

Risks of Agile1. Backlog items are not always validated

against true end-user needs

2. Critical reliance on a fallible Product Owner

3. Lack of clear advice on how and when to “pivot”

4. IT bias… fall back on what we know: build, build, build

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Now What?

• Solution crafted, few customers

• No ideas on how best to proceed

• Keep building?• But…we’re almost out of

runway!

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A Serendipitous Epiphany

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The Lean Startup Cycle: Build-Measure-Learn

• Know your customer• Start small• Fail fast• Test relentlessly• Seek customer validation at all levels

Lean Discovery + Agile Delivery Illustrated

Holistic Discovery

List Market, Customer,

Product risks

Illustrate business

model/case

Risk-driven Product Backlog

Prioritize by riskiest

assumption

Include validation

mechanisms

Exploratory Sprints

Team intercepts users

Team helps design

experiments

Data-driven Sprint Review

Review experiment results

Pivot, Persevere, Punt

Scan for new opportunities

ValidatingProduct Increment

Measure key usage patterns

Focus MVP on early adopters

DISCOVERY

Holistic DiscoveryAssessing key customers, problems & markets

Holistic DiscoveryList Market, Customer,

Product risks

Illustrate business

model/case

Risk-driven Product Backlog

Exploratory Sprints

Data-driven Sprint Review

ValidatingProduct

Increment

Iterative Risk Management

• Are we solving a substantial problem?• What are our technical challenges?Produ

ctRisk

• Who are our ideal customers?• Do we understand their needs?Customer Risk

• Do we have a viable market niche?

• Are we better than the competition?Market Risk

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Test Your Riskiest Assumption

What critical assumptions would sink your business case if untrue?

We assumed that most agile teams did (or at least wanted to do) retrospectives.

Do your teams?

Discovering Customer Needs[In]validate your assumptions by:

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• Interviewing users• Observing users in their native

environments• Manually simulating your system

(“concierge”)• Rapid usability testing• Tracking behavior of customer

cohorts (related groups)

Parallel Collaborative Design & the Design StudioDescribe Key Goals & Context

Sketch Designs Independently

Share Designs

Steal Ideas & Try Again

Select Designs to

Iterate

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Design Studio Approach

Benefits:•Rapid idea generation & iteration•Avoid missed opportunities•Buy-in across team(s)

2-3 cycles

Sensei Lean Startup

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STREAM OF VALIDATED FEATURES

Lean Feature Validation

& Elaboration

Invalidated

Agile Feature Delivery

& Release

Lean Canvas to draft your Business Model

Thanks to Ash Maurya, Leanstack.com23

Draft your business case in a simple, single-page format, and adjust based upon the results of your interviews, prototypes and releases.

Example Lean Canvas for Sensei

Risk-Driven Product Backlog

Challenging & testing your assumptionsHolistic Discovery

Risk-driven Product Backlog

Prioritize by riskiest

assumption

Include validation

mechanisms

Exploratory Sprints

Data-driven Sprint Review

ValidatingProduct

Increment

The MVPA “Minimum Viable Product” might be:• Learning: Onsite observation, fake menus, ads• Pitching: Preorders, comparisons, joint design• Experiencing: Concierge, prototypes

Early releases focus on quickly & cheaply testing ideas.

Later releases focus on scaling.

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MVP

Pivot Key Differentiators

Flexibility & Safety

Scaling & Optimization

Story A1

A2

A3

B1

B2

C1C2C3

D1

D1D2

B3

Epic 1 Epic 2 Key Activity Major Component

Plan Releases & Pivots with a Story Map

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Unbounce for Landing PagesYou can create dynamic landing pages that help you tune your pitch and garner pre-orders with tools like Unbounce.

Validation Board for Experimentation

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Plan and track experiments to test your assumptions about customers, problems & solutions. Pivot based upon the results that you see.

Adjusting the PlanBased on what you learn, you might:• Stick to the plan • Target another customer group• Target a different need• Expand or contract feature focus• Change platforms or architecture• Change channels• Kill the idea entirely

Persevere, pivot or punt.30

Exploratory SprintsQuick, cheap ways to validate your approach

Holistic Discovery

Risk-driven Product Backlog

Exploratory Sprints

Team intercepts users

Team helps design

experiments

Data-driven Sprint Review

ValidatingProduct

Increment

Concierge to Test without CodingA manual simulation of your product or service.

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Overcoming the fear of being “Salesy”

Balsamiq Mockups for Low-Fi Prototyping

http://balsamiq.com/products/mockups/

Test layouts and flows without coding or graphic design.

Data-Driven Sprint Review

Using data to drive decisionsHolistic Discovery

Risk-driven Product Backlog

Exploratory Sprints

Data-driven Sprint Review

Review experiment results

Pivot, Persevere, Punt

Scan for new opportunities

ValidatingProduct

Increment

Lean Canvas as Dynamic Dashboard

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Think of your project as a set of small experiments.

The results of these experiments should be simply stated and reviewed regularly to guide decisions about product direction.

Thanks to Ash Maurya, author of Running Lean:http://www.runningleanhq.com/

“Pirate” Metrics & Customer Funnels

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Acquisition

Activation

Retention

Revenue

Referral

How many users are interested and find you?Preorders, signups, ad responsesHow is their experience when they do? Successful runs through key use caseDo they stick around for the long run?30, 60, 90 day retention by cohortDo they pay?Ratio of paying users or ROIDo they tell their friends?Successful recommendations

Thanks to Dave McClurehttp://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version

Validating Product Increment

Analyzing & evolving your production systemHolistic Discovery

Risk-driven Product Backlog

Exploratory Sprints

Data-driven Sprint Review

ValidatingProduct

IncrementMeasure key

usage patterns

Focus MVP on early adopters

Quantitative A/B & Multivariate TestingSplit (A/B) testing randomly presents users with competing versions of specific application pages and features.• See what works best by running parallel experiments• Choose the winning option after appropriate time

Header

Sign up form

Demo movie

Story

Header

Sign up form

Demo movie

Story

58% of visitors signed up

35% of visitors signed up

A B

A/B Testing Sensei with OptimizelyWe found a 60% increase in registrations just from adding the term “distributed teams” to our landing page.

Zopim Live Chat We envisioned live chat to be largely a help tool, but it ended up connecting us with our most passionate early adopters.

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Watching users in action

Lean & Agile at Established Companies

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Challenges to Innovation at Large Corporations

1. Talent 2. Heavy Governance3. Heavy duty consumer research processes4. Decision culture centered around HIPPO (Highest Paid

Person’s Opinion)5. Success measured as # of units6. Culture that frowns upon pivots

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Lean for the Enterprise at Capital One*1. We hire only the best digital talent and then

massively empower them2. We have designed new workplace environments

to spark innovation3. We have retooled the way we do consumer

insights generation4. We don’t create business cases first - We build

and test prototypes to create the business case5. We build concierge based solutions before we

build the technology6. We measure success as customer engagement

rather than unit production

*Gagan Kanjlia, Senior Vice President, Capital One Bank

Thank You!

Reading List – Lean & Agile Innovation• Running Lean – Maurya• Essential Scrum – Rubin• The Entrepreneur's Guide to Customer Development – Vlaskovits• The Lean Startup – Ries• Discover to Deliver – Gottesdiener• The Other Side of Innovation – Govindarajan• Four Steps to the Ephiphany – Blank• Business Model Generation – Osterwalder

Contact Us for Further Information

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Arlen BankstonExecutive Vice PresidentArlen.Bankston@LitheSpeed.com

On the Web:http://www.lithespeed.comhttp://www.senseitool.com

"I only wish I had read this book when I started my career in software product management, or even better yet, when I was given my first project to manage. In addition to providing an excellent handbook for managing with agile software development methodologies, Managing Agile Projects offers a guide to more effective project management in many business settings." John P. Barnes, former Vice President of Product Management at Emergis, Inc.