lean enterprise - enabling innovative culture
TRANSCRIPT
Joanne Molesky & Barry O’Reilly @jemolesky #LeanEnterprise @barryoreilly
ENABLING INNOVATIVE
CULTURE
Right now, your company has 21st century Internet enabled business processes, mid 20th
century management processes, all built atop 19th century management principles.
- Gary Hamel, American Management Expert
MEET THE NEXT GENERATION
$1-2B Valuation $2-5B Valuation $5-40B Valuation $40+B Valuation
Sources: Dow Jones VentureSource and The Wall Street Journal. Valuations as of March 2015.
KEY FINDINGS OF 2014 DevOps Report
• High performance IT doubles your chance to exceed profitability, market share and productivity goals.
• DevOps practices strongly correlates with IT performance
• Culture matters. Collaboration and experimentation contribute to organizational performance.
• Job satisfaction is the No. 1 predictor of performance.
BUSINESS CEO, COO, CFO, CMO
TECHNOLOGY CIO, CTO, CDO (Digtial and/or Data)
SOFTWARE IS EATING THE WORLD
BUSINESS CEO, COO, CFO, CMO
TECHNOLOGY CIO, CTO, CDO (Digtial and/or Data)
SOFTWARE IS EATING THE WORLD
BUSINESS CEO, COO, CFO, CMO
TECHNOLOGY CIO, CTO, CDO (Digtial and/or Data)
SOFTWARE IS EATING THE WORLD
BUSINESS CEO, COO, CFO, CMO
TECHNOLOGY CIO, CTO, CDO (Digtial and/or Data)
SOFTWARE IS EATING THE WORLD
Technology as a strategic capability Willingness to support experimentation
Iterative, adaptive working processes and practices Reduce learning anxiety across organization
Ability to innovate at scale
CULTURE OF EXPERIMENTATION
Theme 1
SHOOK’S VERSION
John Shook, MIT Sloan Management Review
CONTINUOUS IMPROVEMENT
Humble, Molesky, O’Reilly Lean Enterprise: How High Performance Organizations Innovate At Scale
CONTINUOUS IMPROVEMENT
Humble, Molesky, O’Reilly Lean Enterprise: How High Performance Organizations Innovate At Scale
PORTFOLIOMANAGEMENT
Theme 2
DIFFUSION OF INNOVATION
Everett Rogers, Diffusions Of Innovations
CROSSING THE CHASM
Geoffrey Moore, Dealing With Darwin
CONTINUOUS LIFECYCLE OF INNOVATION
Geoffrey Moore, Dealing With Darwin
BUSINESS MODEL STRATEGIES
EXPLORE
• Uncertainty
• Complex
• Emergent
• Experimental
EXPLOIT
•Improved understanding
•Cause and effect
•Accumulated knowledge
•Forecast
INNOVATION PORTFOLIO
explore exploit sustain retire
kill kill kill killHumble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
INNOVATION PORTFOLIO
explore exploit sustain retire
kill kill kill killHumble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
INNOVATION PORTFOLIO
explore exploit sustain retire
kill kill kill killHumble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
INNOVATION PORTFOLIO
explore exploit sustain retire
kill kill kill killHumble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
INNOVATION PORTFOLIO
explore exploit sustain retire
kill kill kill killHumble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
INNOVATION PORTFOLIO
explore exploit sustain retire
kill kill kill killHumble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
INNOVATION PORTFOLIO
explore exploit sustain retire
kill kill kill killHumble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
INNOVATION PORTFOLIO
explore exploit sustain retire
kill kill kill killHumble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
INNOVATION PORTFOLIO
explore exploit sustain retire
kill kill kill kill
DISRUPT
Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
PORTFOLIO MANAGEMENT
TRANSPARENCY AND ALIGNMENT
NOTICE A PATTERN?
NOTICE A PATTERN?
NOTICE A PATTERN?
PROOF OF DISRUPTION
G I G A F A C T O R Y
THE DISRUPTION POINT
Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
CREATING END-TO-END FLOW
Theme 3
The main obstacles to improved business
responsiveness are slow decision-making, conflicting
departmental goals and priorities, risk-averse
cultures and silo-based information.
Economist Intelligence Unit: “Organizational agility: How business can survive
and thrive in turbulent times”
COMMAND AND CONTROL
Compliance rules Risk models
Quality controls Inspections
Balanced scorecards
Target and
incentives
Budget contracts
Adapted from:http://www.bbrt.org/beyond-budgeting/bb-problem.html
COMMAND AND CONTROL
STRATEGY
EXECUTION
ALIGNMENT
Compliance rules Risk models
Quality controls Inspections
Balanced scorecards
Target and
incentives
Budget contracts
Adapted from:http://www.bbrt.org/beyond-budgeting/bb-problem.html
COMMAND AND CONTROL
STRATEGY
EXECUTION
ALIGNMENT
MICRO MANAGEMENT
CONTROL
ACCOUNTABLE FOR TARGET& BUDGET
Compliance rules Risk models
Quality controls Inspections
Balanced scorecards
Target and
incentives
Budget contracts
Adapted from:http://www.bbrt.org/beyond-budgeting/bb-problem.html
COMMAND AND CONTROL
STRATEGY
EXECUTION
ALIGNMENT
MICRO MANAGEMENT
CONTROL
ACCOUNTABLE FOR TARGET& BUDGET
Compliance rules Risk models
Quality controls Inspections
Balanced scorecards
Target and
incentives
Budget contracts
Adapted from:http://www.bbrt.org/beyond-budgeting/bb-problem.html
THE CONTROL OF BUREAUCRACY 10-20% OF COSTS
TRADITIONAL VIEW
TRADITIONAL VIEW
BUSINESS Many good ideas, we need money!
TRADITIONAL VIEW
BUSINESS Many good ideas, we need money!
PROJECTS We’re working, give us money!
TRADITIONAL VIEW
BUSINESS Many good ideas, we need money!
PROJECTS We’re working, give us money!
OPERATIONS That doesn’t work – need more money!
STOP THE PROCESS MADNESS
Lean Enterprise Loop
Enterprise LoopHumble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
STOP THE PROCESS MADNESS
Lean Enterprise Loop
Enterprise LoopHumble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
STOP THE PROCESS MADNESS
Lean Enterprise Loop
Enterprise LoopHumble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
STOP THE PROCESS MADNESS
Lean Enterprise Loop
Enterprise LoopHumble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
Adhering to budgeting rules should not trump good
decision making.
- Emily Oster, American Economist
WHAT COULD POSSIBLY GO WRONG?
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!!!!Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
WHAT COULD POSSIBLY GO WRONG?
$$ $$
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!!!!Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
$$BIG PROJECT!
WHAT COULD POSSIBLY GO WRONG?
$$ $$
!
!!!!Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
$$BIG PROJECT!NO CHANGE
WHAT COULD POSSIBLY GO WRONG?
$$ $$
!
!!!!Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
$$BIG PROJECT!NO CHANGE
!
!!!!
WHAT COULD POSSIBLY GO WRONG?
$$ $$
!
!!!!Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
$$BIG PROJECT!NO CHANGE
!
!!!!
WHAT COULD POSSIBLY GO WRONG?
OPERATION COSTS
$$ $$
!
!!!!Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
$$BIG PROJECT!NO CHANGE
!
!!!!
WHAT COULD POSSIBLY GO WRONG?
OPERATION COSTS
$$
$$ $$
!
!!!!Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
$$BIG PROJECT!NO CHANGE
!
!!!!
WHAT COULD POSSIBLY GO WRONG?
OPERATION COSTS
$$
GREAT JOB!
$$ $$
!
!!!!Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
$$BIG PROJECT!NO CHANGE
!
!!!!
WHAT COULD POSSIBLY GO WRONG?
OPERATION COSTS
$$
GREAT JOB! WTF?
$$ $$
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!!!!Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
FROM PROJECTS …
BUSINESS PROJECTS OPERATIONSMany ‘good’ ideas -
WE NEED $$$! We’re working - GIVE US $$$!
That doesn’t work - NEED MORE $$$!
Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
TO PRODUCTS…
PRODUCTS / SERVICES OPERATIONS
Customers
Service DeskOps Management
Cross-Functional Product Teams
Teams PushChanges Continuously
Product Teams for IaaS / PaaS
Infrastructure / Platform-As-A-Service
Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
PERFORMANCE MEASUREMENT
PERFORMANCE MEASUREMENT
MEASURE THINGS THAT MATTER •Do our customers advocate us to others?
•What is the outcome we achieved?
•Have we reduced complexity of our technology?
•Are we getting better?
TAKE AWAYS
TAKE AWAYS
Think Big, Start Now, Learn Fast
Continuous innovation is a strategic capability
Technology is the business
The Lean Institute: http://www.lean.org
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Management Innovation eXchange: http://www.managementexchange.com/
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Beyong Budgeting Round Table: http://www.bbrtna.org/
OTHER RESOURCES
THANK YOU
Joanne Molesky [email protected] @jemolesky
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Barry O’Reilly [email protected] @barryoreilly