lean principles for nonprofits: because your annual plan is a fraud

LEAN PRINCIPLES FOR NONPROFITS

BECAUSE YOUR ANNUAL PLAN IS A FRAUD

INTRO• Kayvon K

• Twitter: @kayvonk

• Facebook.com/kayvank7

• Email: k@kahzoom.com

• To book an appointment: Go to :kahzoom.com/now and click on the orange BOOKNOW button

• Please also use #leanxvan

WHAT IS LEAN STARTUP?

CORE IDEASMINIMIZE WASTE

Lean startup philosophy seeks to eliminate wasteful practices and increase value producing practices during the product development phase so that startups can have a better chance of success without requiring large amounts of outside funding, elaborate business plans, or the perfect product.

CORE IDEAS

BUILD SOMETHING THEY ACTUALLY WANT

Customer feedback during product development is integral to the lean startup process, and ensures that the producer does not invest time designing features or services that consumers do not want.

CORE IDEAS

Lean startup philosophy counter-balance the infinite capacity of human to self-delusion

CORE IDEAS

WHAT IS A STARTUP?

A human institution designed to deliver a new product or service under conditions of extreme uncertainty.

CORE IDEASIf innovation is all about operating within conditions of extreme uncertainty, and if we are first and foremost in search of answers and only THEN building our products, then we have to get a lot better at getting answers quickly (and yes, social change work nearly always operates under conditions of “extreme uncertainty.”)

Innovation succeeds at specific point of equilibrium changes – when things are about to change, not after they've changed

CORE IDEAS

To do this, we have to get better at what is called “validated learning” – getting clear data around our core assumptions – by iterating through a BUILD – MEASURE – LEARN cycle

WHY LEAN IS IMPORTANT? WHAT IS THE POINT?

Unfair Advantage

An organization practicing lean principles has an unfair advantage against a completely equivalent organization that doesn’t.

ACHIEVING FAILUREMajority of organization are very good at Achieving Failure

Definition: successfully executing a bad plan

If we're building something nobody wants, what does it matter if we accomplish it

ACHIEVING FAILUREThe method of accountability in traditional management is about projecting into the future and measuring success by how they do compared to the forecast.

"Lean" comes from manufacturing. Manufacturing doesn't do not waterfall anymore.

The customer is the most important part of the production line. But we have to know who is the customer?

WHAT IS THE MAIN GOAL OF A START-UP?

• It can also be applied to a project, new feature, a product development process.

WHAT IS THE MAIN GOAL OF A START-UP?

TO FIND OUT WHAT WORKS

WHAT IS THE MAIN GOAL OF A START-UP?

THE LEAN STARUTUP CYCLE

THE LEAN STARUTUP CYCLE

The main determinant of whether / how quickly we innovate is how quickly we can go through the BUILD – MEASURE – LEARN cycle

THE LEAN STARUTUP CYCLE

The faster we go, the more quickly we learn, the more often we pivot, the less time we waste

THE LEAN STARUTUP CYCLE

We optimize for learning and build organizations that are made to adapt quickly

THE LEAN STARUTUP CYCLE

Lean startup its about teaching startups to speed up their learning.

(This makes sense, but it’s not how we (any of us) act most of the time)

THE LEAN STARUTUP CYCLE

Startup = Experiment

BUILDING A STARTUP

What does it take to go from an idea to implementation?

BUILDING A STARTUPWaterfall (Product) Development

BUILDING A STARTUPIt used to be:

A.We will write a (business) plan?

B.Then we would know everything there is to know

1. Operating plan

2. Financial Model

C.And we simply execute that plan

BUILDING A STARTUP

Reality: No plan survives the first contact with clients

BUILDING A STARTUPReason: Startups are not a smaller version of lagers companies

•Startups search

•Companies execute

Search for what? Execute what?

BUILDING A STARTUP

We still need a plan

Planning that comes before The (business) Plan

BUILDING A STARTUPSo a "Search Plan" first

Then an "Operating Business Plan" to execute

BUILDING A STARTUPTool: The Business Model Canvas

•To organize your thinking

•To get out of the building

• To test the hypothesis

• And update our canvas

BUILDING A STARTUP

BUILDING A STARTUP

BUILDING A STARTUP

BUILDING A STARTUP

What problem are we solving?

What are we building?

And for whom?

Who is the customer?

BUILDING A STARTUP

BUILDING A STARTUP

Who are they?

Why would they buy?

Persona?

Multiple Customer Segments

BUILDING A STARTUP

BUILDING A STARTUP

How do we distribute our product?

How our products from out company gets to our customers?

BUILDING A STARTUP

BUILDING A STARTUP

How do I get customers?

How do I keep them?

How do I grow them?

BUILDING A STARTUP

BUILDING A STARTUP

What value is customer paying for?

What is the strategy to capture that value?

BUILDING A STARTUP

BUILDING A STARTUP

What are the most important assets we need to make business model work?Finance, Physical, Intellectual, Human

BUILDING A STARTUP

BUILDING A STARTUP

BUILDING A STARTUP

BUILDING A STARTUP

BUILDING A STARTUP

BUILDING A STARTUP

What are the COSTS to operate the business model?

BUILDING A STARTUPTool: The Business Model Canvas

•To organize your thinking

•To get out of the building

• To test the hypothesis

• And update our canvas

BUILDING A STARTUPTool: Lean Canvas

•To organize your thinking

•To get out of the building

• To test the hypothesis

• And update our canvas

THE LEAN STARUTUP CYCLE

BUILDING A STARTUP

BUILDING A STARTUP

Do people have this problem?

BUILDING A STARTUP

Is there a match between problem and solution?

BUILDING A STARTUP

Repeat * Until proven

BUILDING A STARTUP

BUILDING A STARTUP

Creating end-user and demand

BUILDING A STARTUP

The scalable organization to do it all

BUILDING A STARTUP

Tool: Validation Board

•To get out ofthe building

•To iterate

BUILDING A STARTUP

BUILDING A STARTUPGet out of the building:

1.Design experiments

2.Run tests

3.Get data

4.Repeat

BUILDING A STARTUP

It is about a search for a business model that works

RESOURCES

• Kayvon K

• Twitter: @kayvonk

• Facebook.com/kayvank7

• Email: k@kahzoom.com

• To book an appointment: Go to :kahzoom.com/now and click on the orange BOOKNOW button

• Please also use #leanxvan