Lean Enterprise in Africa

Last week I achieved a significant personal goal. When we released Lean Enterprise: How High Performance Organizations Innovate At Scale, I set myself an objective to visit every continent on the globe to engage local communities and business leaders interested in the mission to change the way we work in large organisations forever. I’m delighted to say that by visiting South Africa last week I have achieved it – in 300 days!

Lean Enterprise Africa

Why I wanted to go to Africa… and save the best till last

Working at ThoughtWorks has helped me experience and understand what true social and economic justice means. I’m also lucky to have colleagues and friends that believe in equality and opportunity for all. Therefore to help me develop a deeper understanding of the South African market I asked Aslam Khan, our General Manager at ThoughtWorks, for his viewpoint;

“On the continuum of software development in South Africa, we have 100 year old companies like Standard Bank and highly successful startups like Fundamo (acquired by Visa), and iKubu (acquired by Garmin).  In that continuum we have extremely lean and nimble organisations that can compete with global tech giants in terms of process, efficiency and sophistication of software solutions.  We also have slow changing organisations encumbered by decades of legacy software. That takes a long time to change and that change is being forced by a shift from product and service centricity to customer centricity. Thus, software and processes need to change to accommodate the shift in strategy.  Many will then look towards becoming a lean enterprise.

Regardless of the continuum, the limiting factor is the density of software talent in the country.  The history of apartheid and its decimation of the education and social systems has yielded a privileged minority with the necessary skills to tackle a national and continental scale sector.  Compared to the other countries in the BRICS (Brazil, Russia, India, China, South Africa) cluster, South Africa is lagging in density of software developers.  This cannot be addressed until we address the upstream social and education problems.  Until then, South Africa will continue to be a net importer of software.”

We have many challenges in the technology industry based on diversity of thought, gender and privilege. That is why capability building is such a key aspect to creating a lean enterprise.

Talent shortage

There will never be enough experienced people in new technologies — no one will have five years of lessons learnt in the latest and greatest programming language or tool! This is why it is so important to create a culture of experimentation and learning in your organisation. You need to build your people while they build new solutions to new customer problems. Organisations that will thrive in the future are not the ones with the most people with 15 years experience in Java. It will be the ones that have created a capability to continuously learn new skills and technologies, adapting to the changing environment both inside and outside your business. As my co-author Joanne Molesky often says, “What worked for you today, may not work tomorrow”.

So what did you do?

The trip kicked off with a local meetup event in the ThoughtWorks office in Johannesburg with my friend and colleague Rouan Wilsenach. The event was targeted at practitioners with the goal for Rouan and I to share our experiences, lessons learnt, along with the tools and techniques we regularly use when trying to drive change in large scale organisations.

With Rouan

What was billed as a 45 minute session turned into a 2 hour dialogue between ourselves and everyone in the room. Typically I try to keep the presentations short and emphasise the question time at the end. However, the attendees in Johannesburg just wanted to keep going and going. More questions, more stories, more sharing. It was without doubt one of the most enjoyable sessions I’ve done.

Meeting Business Leaders

The following evening we ran another of our Lean Enterprise Executive Briefings in Sandton with 25 business leaders from some of South Africa’s largest organisations in attendance. It was a very open and transparent session, with many attendees sharing their own experience and learnings on embracing lean enterprise in their organisations.

As with many of these sessions, creating a space for leaders in different organisation to collaborate with one another in a safe environment fosters a great sense of community and a network to know you’re not alone.

The key themes that emerged are well known to us all. Many organisations have suffered the crippling consequences of not adapting to new business models because of the enormous challenge of developing a new organisation mindset. The difficulty of trying to balance experimenting with new ways of working while still achieving lofty targets to improve delivery or reduce costs is daunting.

The most vigorously debated subject was understanding the true outcomes of strategies they have devised to achieve organisational objectives and goals. It easy to point at Executives, make jokes and say they have no idea what is happening in the organisation, but must remember that a lot of the time they are making decisions based on information as it is collated and presented to them by others. The details and facts are so watered down and sanitised by the time they reach their desk that they are essentially meaningless. They are making decisions in good faith based on watermelon reporting: hence it should be no surprise that they don’t achieve the desired result.

The challenge for all of us is to create an environment where it is safe to share the real information across the entire company without repercussion. To make better decisions, we need better quality of data on which we base those decisions.

Another way for Executives to bridge the gap between their ambitions and customer needs is to gain first-hand experience of a customer’s interaction with the product or service. They also need  exposure to the experience of the organisation’s people trying to deliver that service or product. This is the principle of ‘Go and See’. In order to change your mental model of a situation, you must experience it. The best way to achieve that is walking a mile in your customers’ and team members’ shoes. In so doing, leaders are able to reshape preconceived notions and respond appropriately to what customers/team members want, and how they want those needs fulfilled.

Meeting leading Organisations

Finally, I had the honour of being invited to Standard Bank to give a keynote to the senior leaders in the organisation. Standard Bank Group is the largest banking group in Africa by assets and earnings. Its 49,000 employees operate in 20 countries in Sub-Saharan Africa, serving over 15 million customers.

Lean Enterprise Johannesburg

Standard Bank are now two years into their journey and recognise the critical role that technology plays in meeting the ever-evolving needs of their customers, Standard Bank partnered with ThoughtWorks to develop their new Internet banking website, an essential customer-facing platform for their business.
It was fantastic to see such strong executive support and team engagement in transforming a bank at scale. They are constantly challenging themselves to move forward and think about the next thing. Embodying the mantra of lean enterprise, THINK BIG, start now, learn fast.


To visit Africa was a privilege. The openness, transparency and willingness to learn was a refreshing reminder as to why I love meeting people and organisations as we all go on this journey together.

Upon reflection after all the airports, flights, hotel rooms, good, bad and indifferent coffees there is one thing that continues to hold true. Lean Enterprise has helped me build my own global community for which I am very grateful, and my only wish to continue to grow it and make it stronger.

300 days | 28 events | 9 countries | 6 continents | 1 global community


Thank you Australia, Brasil, Canada, China, Germany, Ireland, South Africa, the United Kingdom and United States for inviting me to your fantastic countries.

What is ‘Lean Enterprise’ and Why it Matters

The acceleration of change impacts technology, consumer expectations, and economic models. Nowhere has this been so profound as in the decease in the lifespan of companies​ on the S&P 500​, from 67 years average in 1920 to 15 years today.

In order to survive​,​ organizations need to ​innovate at scale. Technology is now core to business​,​ but business is not only technology. Transformation in organizational structure​and governance​, financial ​management, product development and culture must accompany technical excellence to optimize innovation and ensure ongoing business relevance.

Will your organization be able to keep up with the pace of change?  Will you be a disruptor or disrupted? Lean Enterprise: How High Performance Organizations Innovate at Scale proposes a roadmap for competitive survival. In our new book, we share how leaders can create thriving ​organizational ​cultures​ required to build an adaptive, resilient Lean Enterprise ​that can survive the future.

lean enterprise

[podcast] Lean Enterprise interview with Software Engineering Radio

Johannes Thönes interviewed me recently for SE Radio regarding our book Lean Enterprise: How High Performance Organizations Innovate At Scale.

Interview introduction by Johannes: “A lean enterprise is a large organization that manages to continues innovating while keeping its existing products in the market. O’Reilly talks about the idea of scientific experiments and the build-measure-learn loop popularized by the lean startup method.

He shares his experiment of an online wine seller using Twitter. He further discusses the challenges for enterprises trying to do something similar and introduces the three-horizon model, to manage innovative, growing, and sustaining products.”

Related Links

Make Failure Taste Better With Failure Cake

For any leader in business one of the most challenge aspects (and a question I get asked a lot) is how to manage failure — especially in large organisations?

Typically, workers within organisations fear how executives will respond to lack of success. On the other side, executives cannot seem to get the message through to workers to embrace experimentation and be bolder. A paradox of purpose, expectation, and culture that ultimately damages both parties ambitious of improvement.

Innovation is an exploratory event. There is no guarantee of achieving a desired outcome. Any work we undertake inevitably results in either success or failure. But failure is not the opposite of success, it is the step prior to achieving success. Both results are part of a learning process.

Failure Cake

When undertaking any new initiative we all stumble along the way, and those that follow also struggle and fall. Put simply: if you’re not failing, you’re not really trying. As Joanne always says: playing it safe is actually risky for your long term business success.

Safe Is Risky

It’s hard to fail but what is even worse is to sit there and never attempt anything new, risky or unknown.

The result of failing is never one moment of oversight or a sole individual’s actions. It is a series of events that leads to failure. Yet cultures that seek to punish people for mistakes or find one neck to choke actually achieve a worse outcome. People freeze; hold position while the world, customer needs, and the competitive environment rapidly evolve around them.

Companies are always trying to find ways to dispel this inertia to change. At our recent event at the Churchill Club, Jody Mulkey, CTO at Ticketmaster, shared how they had created an award for “Epic fails” to encourage more experimentation and risk-taking in their business.

One of my favourite culture hacks was introduced to me by Tom Sulston while I was at the Agile/Lean Europe conference in Berlin, and giving a presentation on ‘Mental Models for Agile Adoption’ with Jo Cranford in 2011.

When you experience failure the best way to make it taste better is eating up some Failure Cake!


How Failure Cake Works:

  1. Someone identifies an exception in the system.
  2. A person or team accepts responsibility for the exception and takes ownership for the resulting failure.
  3. The person (or team) that accepts ownership for the exception buys cake for the team.
  4. The person brings the cake back to the team area and calls all parties together.
  5. The team eat the cake while discussing the exception and how they can develop options for future mitigation or improvement. Remember the retrospective prime directive!

“Regardless of what we discover, we understand and truly believe that everyone did the best job they could, given what they knew at the time, their skills and abilities, the resources available, and the situation at hand.”

It’s not the failure that we celebrate, its the discussion and learning that follows.

Plus, how can you be angry with one individual or team if they’ve just bought you cake!

Taking risks still carries responsibility and accountability. By defining boundaries in terms of scope, effort, investment, and risk level you take you can create scenarios that are acceptable and recoverable should your hypothesis turn out to be flawed. This is what we term ‘safe-to-fail’ experiments in Lean Enterprise: How High Performance Organisation Innovation At Scale.

Next time you or your team fails, use it as an opportunity to improve, build knowledge and trust within your team. Go buy a cake. Maybe even invite another team along to the party and share your success and failures together. Our biggest advances are rarely achieved alone; it’s the shared lessons that help us make progress.

Remember, it’s a privilege to taste failure! Demonstrate the behaviour you wish to see in others and act your way to a new way of working. Make a cultural impact to stamp out stigma and encourage others to experiment their way to new heights… all while eating fantastic tasty cake along the way!


Cakes kindly inspired from http://www.cakewrecks.com

[Videocast] Lean Enterprise: The Future High Performance Enterprise at the Churchill Club

Churchill Club
The acceleration of change impacts technology, consumer expectations, and economic models. Nowhere has this been so profound as in the decrease in the lifespan of companies, from 67 years average in 1920 to 15 years today.
In order to survive organizations need to arrange for high performance and innovation at scale. Technology is now core to business but business is not only technology. Transformation in organizational culture, financial governance, product and people development must accompany technical excellence to optimize innovation. Will you be able to keep up the pace of change?  Will you be a disruptor or disrupted?
Churchill Club
During this session at the Churchill Club in Santa Clara Bask, Barry, Joanne, Jody and Jonathan shared their perspective on how leaders need to create thriving high performance organizations of tomorrow and what are the key attributes of success.


Jonathan Becher, Chief Digital Officer at SAP
Bask Iyer, Chief Information Officer at VMware
Jody Mulkey, Chief Technology Officer at Ticketmaster
Joanne Molesky and Barry O’Reilly, co-authors of Lean Enterprise: How High Performance Organization Innovate At Scale and ThoughtWorks

Tagged , ,

Lean Enterprise Book Tour: North America and Europe

Today Joanne and I commence a three week series of events in North America and Europe to support the launch of our book with Jez, Lean Enterprise: How High Performance Organization Innovate At Scale.

The response to the book has been fantastic. Thanks to everyone that has taken the time to write a review on Amazon or O’Reilly Media. If haven’t already, please add your thoughts too — we thrive on feedback!

The purpose of this series is to engage business leaders in discussing the topics covered in the book, along with how you can start to implement them in your own organizations.

Lean Enterprise

By 2025, 75% of the companies in S&P 500 will be replaced. In 1960, the average lifespan of a company on the list was 61 years. In 1980, it was 25 years. Today, it’s 18.

The pace of change is accelerating. Organizations must continually revisit the question, “What businesses are we in, and how can we organize to maximize our long-term potential?

We’ll show how you can lead in the era of disruption by sharing pragmatic strategies on navigating the most troublesome and counterintuitive aspects of scaling innovation. Gain insights into processes, portfolio and financial management practices, and organizational design and culture that will help you unleash innovation in the enterprise.

This is an exclusive executive event, and space is limited. Reserve your spot today, and we’ll confirm your registration


  • Dallas – Wednesday 27 May
  • Atlanta – Thursday 28 May
  • Toronto – Tuesday 2 June
  • New York – Wednesday 3 June
  • Chicago – Thursday 4 June
  • Santa Clara – Tuesday 9 June
  • London – Thursday 18 June

In Santa Clara, we are hosting an exciting breakfast program in partnership with Churchill Club.

Joanne, Jez and I will join Jonathan Becher, Chief Digital Officer at SAP; Bask Iyer, Chief Information Officer at VMware; and Jody Mulkey, Chief Technology Officer at Ticketmaster to discuss key trends and their implications for the future of the high-performing enterprise. More details here.

What if I cannot make it?

If you are not able to attend, I would recommend tuning into the recent series of webinars Joanne, Jez and I did with O’Reilly Media.

You can also download sample chapters of the book for free here!

We’ll be tweeting on #LeanEnterprise and posting more thoughts as we go.

Hopefully see you along the way!

Blow Up The Business Case

Writing a well-crafted business case may be key to securing funding but it has little impact on whether your initiative succeeds or fails. A clear product vision, strategy for testing it and knowing which initiatives to start, stop, or continue will serve you better every time — especially if your goal is to create a high performance organization.

Blow Up The Business Case

Blow Up The Business Case

While the discipline of creating a business plan is useful it doesn’t guarantee anything; except maybe that the plan will change once it comes into contact with customers. So it begs the questions, how do you manage investment risk without simply writing documents, cloning other companies success by becoming ‘The Uber of [insert domain here]‘ or implementing the next great HiPPO (High Paid Person Opinion) idea?

In the webinar ‘Blow Up The Business Case’ hosted by O’Reilly Media, I presented how to take an evidence-based approach to investment decision-making by creating a framework of evaluation to manage and prioritise your organization’s projects and products. It discussed how use techniques such as customer discovery, hypothesis-driven development, and innovation accounting can minimize risk, uncover and inform options, and get the optimal return on your efforts.

Throughout the course of the webinar I asked the attendees three questions to get a sense of what techniques they are currently using and how they are incorporating customer/user feedback, measurement and decision-making frameworks into their development process to drive success in their own organisations. As ever, the results are both interesting and surprising.

Closing the learning loop with customers and users

How often do you get feedback from real users and customers in an iteration?

How often do you get feedback from real users and customers in an iteration?

The two biggest risks to any investment in a new initiative is not how much it costs or when it will be done; but reducing the uncertainty of will it get cancelled and will anyone use it? The way a user tells you that they like your product is they use it. Customers tell you that they like your product by sending you money for using it.

If you’re not talking to the people ultimately responsible for the success of your products, how can you know if you’re creating something they deem to be valuable and worth sending your their hard earned cash for the honour of using it?

“The most expensive way to find out if something works is the build the entire thing, then find out if people use it.”

Involving customers and users in your development process helps to close the learning loop with the people that matter in making your product a success. If you are serious about co-creation get them involved!

What gets measured gets done — Peter Drucker 

How do you measure the impact of work in an iteration?

How do you measure the impact of work in an iteration?

Understanding the results and impact of our efforts should be the key focus for any high performance organisation and team. Sadly too many teams live in a world so disconnected from business/customer/user success that they only focus on their own inputs and outputs not outcomes.

Organizations that see technology and software development as a cost centre simply care about how much work gets done, not how effective that work was in achieving our ultimate business/customer/user goals. Teams also tend to fall in love with their process… how great and efficient their process is — often its all they want to talk about.

Stories complete is a vanity metric to make you feel good or get management off our back. Velocity, lead time and cycle time are process metrics. Information gained and economic value captured are outcome metrics. Velocity, lead time and cycle time tells you how well your process is working, not how effective the team has been about achieving business outcomes — bottom line impact for our efforts.

High performance teams understand the difference between vanity, process and outcomes metrics. They focus their one metric that matters to solve problems aligned to our current goals — which may be process or business focused depending on the problem they are trying to solve.

Frameworks for decision-making, evaluation and investment

How do investment decisions get made in your business?

How do investment decisions get made in your business?

Death by steering committee or HiPPOs handing out orders to implement — you decide. Engaging teams by framing problems to solve, rather than order to take, has a huge impact on how leaders can encourage teams to work in an innovative way.

Creating a framework for making decisions based on the ambiguity that is inherent when innovating and operating in conditions of extreme uncertainty is a critical factor for high performance teams. No one person can be expected to get it ‘right’ every time.   The goal of using economic frameworks such as Cost of Delay or WSJF is not to provide a magic number. The goal is to force people to expose and explain their assumptions behind why they came up with that number. The added advantage with exposing assumptions is that they are shared, testable, and we can create experiments to exercise those assumptions in learning loops.

It also means that we can start to create and link economic information back to business outcomes to provide a common language that is universally understood across the organisation — money!


The new business case isn’t a hundred page document with well crafted numbers and arguments as to why your idea is the best. It’s a runway for testing and learning all our best ideas to find out what what works, and what doesn’t.

When you are putting together your next business case, try using the following principles to set up for success;

  • Get across functional group together that understands and represents the organization
  • Map ideas out at speed using a canvas (like business model or value proposition canvas)
  • Treat the canvas as a living document, updated regularly based on the learnings from testing out your ideas
  • Test ideas with real customers and users — close the learning loop together
  • Optimise to reduce the uncertainty of building something no one wants and stop wasting peoples time
  • Create a framework for the evaluation of ideas for future investment.
  • Set investment boundaries around time, effort and scope to build in feedback loops for course correction or close.

Further references

Blow Up The Business Case was the final session in a series of three webinars with my co-authors and I. You can check out Joanne Molesky presenting ‘Financing Alternatives for Software Delivery‘ and Jez Humble talking about Running Agile Programs At Scale on O’Reilly website. All these ideas and more are discussed in detail our book, Lean Enterprise: How High Performance Organization Innovation At Scale

[Experience Report] KataCon the first and best Toyota Kata Summit conference ever!

I was lucky enough to be invited by Mike Rother, author of the fantastic Toyota Kata, to ‘KataCon’ – the first ever Improvement Kata and Coaching Kata summit in Fort Lauderdale, U.S. The goal of the event was to bring together the rapidly growing world of Kata users that are integrating practices of the IK/CK routines into their teams and organizations.

Improvement Kata

The opening keynote was from Jeff Liker, author of The Toyota Way. He shared his inspirations for writing The Toyota Way and discussed how Toyota Kata has built upon the same principles of continuous improvement driven by people-led innovation. He shared his 5 reasons for writing the book;

  1. A personal resonance with Toyota’s message of learning about uncertainty by doing
  2. An observation that people with a lot of accumulated knowledge don’t like experimentation or learning new ways of working outside their comfort zone
  3. Frustration with people jumping to solutions without adequately understanding the problems or outcomes they really want to achieve
  4. The fit of the leadership model for Toyota Kata with The Toyota Way, especially the commitment to self development that is inherent in both
  5. A desire for people to experience what learning really felt like – simply knowing what you should do isn’t enough

It was interesting to learn that both Jeff and Mike, who had been academic colleagues, had written two of the most impactful books in this space without much collaboration.

Next was Brad Frank, President of Tulsa Tube Bending. Brad shared his lessons learnt from deploying Improvement Kata and Coaching Kata in his organization. He noted that as a leader, a lot of his coaching cycles are triggered by questions from visitors to the facility. This has helped him to consider the why of what Tulsa are doing, and has provided new ideas to further improve their work. His top 4 lessons learnt were;

  1. You must be the change you want to see. Tulsa had suffered from the classic problem of believing that others needed to change, not the organization itself.
  2. Understand where you are spending your time, and if it aligns to where you should be spending your time. Manage urgent vs. important.
  3. Company culture is always worse that management expects. “The culture in my office was great”, he said jokingly as the CEO. That doesn’t mean it is the same everywhere in the organization!
  4. Skills development and improving people is the real job, not managing profits. Like Toyota, he needed to build great people, who then build great cars.

These sessions were followed by other great examples from Cornerstone Healthcare Group, Zulily and GKN Sinter, each sharing different journeys in Healthcare and Manufacturing.

KataAfter the morning presentations W3Group created an Improvement Kata experience of ‘learning by doing’ with a domino game. The goal of the game was to build a structure with 200 dominos using Kata principles and practice routines: setting a vision, understanding and defining the current condition, and setting target conditions to work towards.

As a team we defined a hypothesis to achieve the target condition, then ran an experiment to test our hypothesis. We then ran a coaching cycle to reflect on the outcomes and developed new current and target conditions based on our learning. During the exercise we all got to experience the roles of the learner, coach and worker. The principle of ‘learning by doing’ really came into effect first hand!

Improvement Kata

The second day was broken into two practical components; workshops for attendees to discuss how to deploy Improvement Kata in their organization, and panel discussions (where I presented) from people working in manufacturing, healthcare, administration and software development that had deployed IK/CK.

My presentation showcased ‘Hypothesis-Driven Development’, including how we evolved our product development processes and expressions of work as hypotheses to be tested. For the majority of the audience this was their first experience of how this scientific approach can be applied beyond manufacturing and healthcare to a broad variety of domains, including software.

The software panel was hosted by Håkan Forss & Gary Perkerwicz. Mike Varecka from Obitial ATK, kicked it off by sharing his experience of trying to deploy IK/CK within his organization. Mike works on economic modelling for an aerospace organization, so finding ways to improve the efficiency of their supply chain is critical. He focused on the power of understanding the relationship between learner, coach and second coach as they support one another on the journey. Håkan shared the impact (through amazing Lego scenes) of shortening the learning cycle timeframe when trying to overcome persistent obstacles faced by teams.

The highlight of the conference was an opportunity to visit a B/E Aerospace facility in Miami and meet a team that had embraced Improvement Kata to achieve amazing results both in terms of business outcomes and people engagement.

The facility is responsible for building luxury airline seats (which can cost over $140,000 each) for private jets and Super First Class commercial airliners. We took a gemba walk to the shop floor and met staff as they went through their learning cycles and experiments.

Coming from a software background, I was interested to observe how the environment and its design was such a key consideration for the teams. Visual communication and the physical layout of people, card walls, information radiators and equipment are at the core of high performing Lean-Agile software development teams, as they build shared understanding, raise visibility and improve collaboration with internal and external stakeholders at speed. These principles were at play at B/E Aerospace too.

After the walk we had an open Q&A session with the business leadership and Kata coaches. There was plenty of great dialogue between attendees and employees during the session, and a B/E Aerospace employee raised a point that really captured the essence of the conference experience as a whole. When asked what has been the most transformational outcome of deploying Improvement Kata at B/E Aerospace, their answer was simple; “I feel I no longer need permission to experiment”.


Toyota Kata Website

LinkedIn Group

KataCon YouTube Channel

How to unleash innovation in the enterprise

I constantly hear how enterprises are poor at innovation, bad at product development and unresponsive to business change. So it begs the question, why do so many organizations get it wrong? And what are the key factors to consider when trying to innovate in large organizations?

Typically the factors constraining innovation are conflicting business goals, competing priorities, localized performance measures and success criteria. While these have traditionally been the tools of management – to control workforce behavior and output – in highly competitive and quickly evolving business environments they also have had the adverse effects of killing creativity, responsiveness and ingenuity.

So what are the components needed to unleash innovation in enterprise?

Strong Executive mandate

Ultimately, if any initiative is to be successful the CEO and Executive team need to buy into and drive the mandate. They must encourage or even force others with a stake in the game to participate and support the new initiative. The participants involved should be given the mission to explore and provide as many ideas as possible to form the key pillars of future growth for the enterprise.

Innovation collaboration sessionsExecutive sponsorship offers a powerful and immediate way for leadership to clearly articulate policy priorities and advance them. By linking innovation to a growth strategy it ensures it is a targeted, strategic and funded priority for the organization, and provides alignment between business strategy and execution through the action of delivery.

While I applaud the dissenters and nonconformists who attempt to start initiatives on their own, I find in practice that executive leadership support and sponsorship is required for systemic and lasting success.

Flexibility in innovation strategy

As with any business decision, organizations should begin by honestly assessing their capabilities. Organizations must access their culture, evaluate leadership support and people’s willingness to cooperate with various innovation strategies. For example, will employees behave territorially and discount ideas because they were generated by another department, or externally?

By choosing preferred focus areas for innovation, organizations can define an overall innovation strategy that is suitable for achieving the organization’s goals that are best aligned to its key capabilities. Organizations seeking to cultivate a culture of innovation should consider the merits and drawbacks of each of the options outlined below when making a decision.

Organizational Innovation Strategies

Organizational Innovation Strategies

When deciding on an innovation strategy I encourage leadership teams to base the decision on the answers to these key questions:

  • What is the intended outcome they want to achieve from pursuing the selected strategy?
  • Which strategy is best aligned to their objectives, capabilities, people and values?
  • Where do they want to be on the innovation curve — disruptor, early adopter, follower and laggard?
  • Finally, they should identify specific obsoletes and constraints that prevent them from being entrepreneurial in their pursuit of the strategy and find ways to remove or bypass them.

Consider Complementarity Strategies

An organization that chooses to pursue more than one of the six strategies simultaneously should consider strategies that complement each other, such as R&D and Strategic Alliances.

Procter & Gamble (P&G) launched a “Connect and Develop” program to systematically engage with partners outside the boundaries of the company to source new-product ideas. In 2012, its Head of Technology announced that P&G had tripled its percentage of ideas that made it successfully to market as new products.

Use constraining, not strangling control structures

Tight controls strangle innovation — as does lengthy planning, budgeting and review activities such as business case novels or annual budgeting cycles. Organizations should expect deviations from plan when exploring new domains. Opportunities emerge from unexpected places hence we need structures and control processes that are dynamic and respond to change based on new learning. Instead of strangling teams with KPIs, release milestones and fixed scope requirements, set shorter iteration cycle constraints on teams regarding time, budget and measurable target conditions to achieve based on feedback with customers/users/stakeholders. Then review the outcomes achieved and make decisions for further investment or closure based on evidence from performing the work, not writing the plan.

Open up the organizational network for collaboration

Businesses must also make organizational changes if they are to exploit innovation networks to the full. In particular, this means ensuring efficient collaboration and information sharing throughout the organization. Mechanisms for this include collaborative ideation workshops, organization-wide showcases by initiatives across the portfolio and cross-functional working days to meet and build relationship with other people in the organization.

Leadership must seek opportunities to increase the cross-fertilization of ideas between as many business units as possible. When starting new initiatives, this is typically achieved by creating small cross functional teams composed of representatives from all areas of the organization including development, marketing, finance and legal to explore the problem domain at speed.

Organizational ShowcasesEncourage customers/users to participate and co-create in innovation initiatives by regularly involving them throughout the process. Seek regular feedback on what you are doing with the people you are designing for. Close the feedback loop with them and use the learning to move forward and improve.

Tap into internal sources of ideas so that every part of the organization is regarded as involved in the innovation process. This often requires a shift in corporate culture – removing the ‘not invented here’ mentality to ensure that intrapreneurs and other leaders are prepared to open up to external sources of innovation. Be prepared to tell people within the business to consider the possibility that another part of the organization might be best-placed to exploit some of their ideas – together or maybe even without them.

Finally, innovation networks depend on the recognition that innovation doesn’t only come from the research laboratory, but also from other sources – both internal and external. To remain innovative in a world of distributed knowledge, many organizations are recognizing that they must open their innovation process to combine internal with external R&D. Many businesses are starting to open up to alternative structure models to bring thought leaders of independent tribes together. In doing so they are set to achieve greater performance than would be possible alone, such as complementing organizations with technology breakthrough capability with organizations specializing in design driven competencies (and visa-versa). Examples include IDEO, ThoughtWorks and others collaborating together on new pieces of work.

Find and empower talent doing the work

Culture comes from the top. It is up to leadership to define and enact the behaviors that make people feel empowered to innovate and experiment. Pushing down authority is an enabler and empowering teams to come up their own solutions to solve business problems can give rise to wider innovations.

If an organization only relies on recruitment, acquisition and strategic alliances to access creative talent, what does that say about its ability to generate and retain homegrown innovators? If you want your company to become a market leader, reflect on that question. The most effective way to achieve continuous innovation over the long term is to cultivate talented people and allow them to experiment, grow and learn on the job.

Underestimating the importance of growing the internal capability of your people cannot be understated. There is an onus on organizations to build a culture of learning that supports the development of their people and helps them get to the new vision of how the organization will operate.

The talent war is only getting tougher. There are limited people available in the world with experience in doing highly specialized work and the competition for their services is fierce. Hiring can only take you so far – you also need to grow people on the job.

Following this, you must empower and amplify trust in those performing the work to get on with it. Providing people with autonomy and accountability makes them intrinsically motivated to achieve the desired outcomes.

Make a long term commitment to investment

Change takes time. The culture shift needed in mindset, strategy and organizational structure is hugely challenging for most people. Fears of lost position, status or knowledge built up through existing practices and politics are often the biggest hurdles. The bigger the change, the harder the pushback.

Very few initiatives get it right the first time and people will stumble and fall along the way. However it is not the failure that we should celebrate, but the learning that ensues.


There is no single answer to solve every enterprises innovation challenge however I always remind leaders to consider the following points;

  • Ensure innovation has a strong executive mandate across your organization. If leadership are not willing to support it, success can only be incremental at best.
  • Understand your own organizations strengths and weakness, then be flexible in the innovation strategy you choose, then adapt it as you see what is working and what is not.
  • Don’t kill innovation with tradition operational KPIs, such as ROI, before they’ve ever had a chance to get traction. Use constraining, not strangling controls by setting short iteration cycles and reviewing the outcomes achieved before making further investment decisions.
  • Open up the organization network for collaboration by making it easy for people to meet, share what they working on and the information their learning. Encourage people to build up, not break others ideas.
  • Build a culture of intrapreneurship in your business. Find and empower people doing the work to make them as successful as they can be to further drive change in the business.
  • Make a long term commitment to invest as change takes time and needs support, funding and protection to build momentum over time.

Winning organizations are continually experimenting; testing theories to learn what works and what doesn’t. Not every innovation attempt will be successful, but those that do pass the test can have a massive impact on the organization’s future fortunes. Make your enterprise the place where that happens – without permission!

My new book ‘Lean Enterprise’ is now released

Lean Enterprise on Amazon

I’m delighted to announce that my new book, Lean Enterprise, is out. It’s been a fantastic journey and could not have been completed without the support of my family, friends, and co-authors.

I also want to thank everyone in the community who encouraged us, gave feedback, shared stories and provided guidance along the way. The final product is a collaboration of all our efforts, which hopefully will help move our industry forward to further innovation and excellence.

Gene Kim is calling Lean Enterprise “the classic, authoritative reference for how organizations plan, organize, implement, and measure their work.” Stephen Foreshew-Cain, COO of the UK Government Digital Service, says “it should be required reading for every executive who understands that we’re all in the technology business now.” Mary Poppendieck says its “the best current thinking about how to create great software-intensive products and services.”

You can click here to download a free sample of Lean Enterprise including  the preface and four chapters. You can purchase the ebook today or order the hardback (available for shipping from January 4th), at O’Reilly’s website.

If you are inspired by what you read, please write a review on Amazon or O’Reilly. Thank you so much.

In the spirit of continuous improvement, I look forward to hearing your stories of experimenting with these ideas.

Best wishes for the holiday season and hopefully see you in 2015.


Overview of Lean Enterprise: How High Performance Organizations Innovate at Scale

How well does your organization respond to changing market conditions, customer needs, and emerging technologies when building software-based products? This practical guide presents Lean and Agile principles and patterns to help you move fast at scale—and demonstrates why and how to apply these methodologies throughout your organization, rather than with just one department or team.

Through case studies, you’ll learn how successful enterprises have rethought everything from governance and financial management to systems architecture and organizational culture in the pursuit of radically improved performance. Adopting Lean will take time and commitment, but it’s vital for harnessing the cultural and technical forces that are accelerating the rate of innovation.

  • Discover how Lean focuses on people and teamwork at every level, in contrast to traditional management practices;
  • Approach problem-solving experimentally, by exploring solutions, testing assumptions, and getting feedback from real users
  • Lead and manage large-scale programs in a way that empowers employees, increases the speed and quality of delivery, and lowers costs
  • Learn how to implement ideas from the DevOps and Lean Startup movements even in complex, regulated environments

Praise for Lean Enterprise

“This book is Reengineering the Corporation for the digital age. It is destined to be the classic, authoritative reference for how organizations plan, organize, implement, and measure their work. Lean Enterprise describes how organizations can win in the marketplace while harnessing and developing the capabilities of employees. Any business leader who cares about creating competitive advantage through technology and building a culture of innovation needs to read this book.”

Gene Kim, co-author of The Phoenix Project: A Novel About IT, DevOps, and Helping Your Business Win, founder and former CTO of Tripwire, Inc.

“This book is a godsend for anyone who’s tried to change their organization and heard: ‘It’s OK for the little guy, but we’re too big/regulated/complex to work like that here.’ Humble, Molesky, and O’Reilly have written an easy-to-read guide that demystifies the success of Lean organizations in a way that everyone can understand and apply. Lean Enterprise provides a pragmatic toolkit of strategies and practices for establishing high performing organizations. It should be required reading for every executive who understands that we’re all in the technology business now.”

Stephen Foreshew-Cain, COO, UK Government Digital Service

“To thrive in the digital world, transformation must be more than technology driven—everyone within the organization must collectively work together to adapt. This book provides an essential guide for all leaders to change the way they deliver value to customers.”

Matt Pancino, CEO, Suncorp Business Services

“This is the book I’ve been waiting for—one that takes on the hardest questions in bringing Lean approaches to the enterprise. The authors provide solutions that are valuable even in low trust environments.”

Mark A. Schwartz (@schwartz_cio)

“This book integrates into a compelling narrative the best current thinking about how to create great software-intensive products and services. The approach in this book is both challenging and disciplined, and some organizations will be unable to imagine following this path. But those who make the journey will find it impossible to imagine ever going back—and if they happen to be a competitor, they are well positioned to steal both your market and your people. Ignore this book at your own risk.”

Mary Poppendieck, co-author of The Lean Mindset and the Lean Software Development series

“My job is to support people in practicing a scientific pattern, to help reshape thinking and working habits in business, politics, education, and daily life. The 21st century is increasingly demanding a way of working that’s cognitively complex, interpersonal, iterative, and even entrepreneurial. With Lean Enterprise, Jez Humble, Joanne Molesky, and Barry O’Reilly explain how software can and is leading the way to transforming our ways of working, which can change our ways of thinking and help us adapt to the emerging world around us.”

Mike Rother, author of Toyota Kata

“Nearly all industries and institutions are being disrupted through the rapid advance of technology, guided by the inspired vision of individuals and teams. This book clearly explains how the disciplines of Lean, Agile, Kata, Lean Startup, and Design Thinking are converging through the unifying principles of an adaptive learning organization.”

Steve Bell, Lean Enterprise Institute faculty, author of Lean IT and Run Grow Transform

“Building software the right way is a challenging task in and of itself, but Lean Enterprise goes beyond the technology considerations to guide organizations on how to quickly build the right software to deliver expected business results in a low risk fashion. This is a must read for any organization that provides software based services to its customers.”

Gary Gruver, VP of Release, QE, and Operations for Macys.com

“To compete in the future businesses need to be skilled at understanding their customers and taking the validated learnings to market as quickly as possible. This requires a new kind of adaptive and learning organization—the lean enterprise. The journey starts here in this book!”

John Crosby, Chief Product and Technology Officer, lastminute.com

“Rapid advancements in technology are creating unparalleled rates of disruption. The rules of the disruption game have changed, and many organizations wonder how to compete as new giants emerge with a different approach to serving their customers. This book provides an essential guide to those that have come to the realization that they have to change to regain an innovative competitive advantage but are unsure where to start.”

Jora Gill, Chief Digital Officer, The Economist

“Lean Enterprise was the book I gave my leadership team to get everyone on the same page about how we can challenge the status quo, remove roadblocks, and out-innovate our competition. By leveraging the continual insights we get from co-creating with customers, our people, and data, we now have so many additional new ways to grow our business.”

Don Meij, CEO, Domino’s Pizza Enterprises Ltd.

“While agile and lean methods have had a big impact on software delivery, their true potential only comes as they have a broader impact on enterprises of all sizes. In this book, Jez, Joanne, and Barry have set out what those changes look like—a realistic vision of how future companies will make today’s look like cassette tape players.”

Martin Fowler, Chief Scientist, ThoughtWorks

“This is an important book. It takes an informed and informative look at the fundamentals that need to shift to start building organizations capable of continuous learning and improvement. It moves well beyond the technical to the organizational. Lean Enterprise is a must-read for existing and emerging leaders seeking to ensure their company’s ongoing success.”

Jeff Gothelf, author of Lean UX, and Principal of Neo Innovation

“I was telling everyone to get this book for a year before it was finished. It documents the path being taken by the leading lean enterprises and the fat ones will be wiped out by the lean ones in the years to come.”

Adrian Cockcroft (@adrianco)


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