lean principles for nonprofits: because your annual plan is a fraud
DESCRIPTION
Starting, building and operating a nonprofit organization is done under conditions of extreme uncertainty, but we plan with confidence. Enormous energy is put into Five Year Strategic Plans, Annual Plans and Quarterly plans, but then real life intrudes and the reality is that there's only the vaguest resemblance between our plans and our actual work. So much wasted time! There's got to be a better way. Kayvon Khalilzadeh of Lean Startup Vancouver will introduce us to the concept of the lean startup Lean Startup is a methodology that favours experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional “big design up front” development. Although the methodology is just a few years old, its concepts—such as “minimum viable product” and “pivoting” have quickly taken root in the start-up world. Now it's time for the nonprofit sector to adopt this innovative approach. Slides from @kayvonkTRANSCRIPT
LEAN PRINCIPLES FOR NONPROFITS
BECAUSE YOUR ANNUAL PLAN IS A FRAUD
INTRO• Kayvon K
• Twitter: @kayvonk
• Facebook.com/kayvank7
• Email: [email protected]
• 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: [email protected]
• To book an appointment: Go to :kahzoom.com/now and click on the orange BOOKNOW button
• Please also use #leanxvan