1. LEANINNOVATION
For Established Businesses
Best practices that
existingbusinesses
can learnfrom lean
startups
Customer-centered
valuecreation
Inventing new
business models via
theBusiness Model
Canvas
August 15, 2015
Prepared by:
Christine Thompson
2. 2|
Table ofContents
3
What can established businesses or mature organizationslearnfrom startups when
it comes to lean innovationmethods?What are some ofthe key frameworks that
enterprises can use to generate viable newbusiness concepts? Whatare some
options for guidedhands-onlearning?
8 9 18 22
page page page page page
Painful climate for firms
that don’t innovate
What can we learn from
entrepreneurs
The entrepreneur’s
toolkit (lean startups)
Going from theory to
action
Some workshop options
for your organization
4. 4|
Howdo you reinvigorate
your business, or your
reputationasan innovator
Investors, customers, partners
get tired of uninspiring or
incremental improvements,
the results of asking people
“to do more with less…”
6. 6|
Sadly, fewnew ventures
ever reach$1 billion in
revenues
826 achieved ≥$100
million in revenues
96 earned ≥$1
billion in revenues
2952 companies
launched 1980-‐2012
“Breaking through the start-‐up stall zone,” McKinsey Quarterly, February 2014. Study of the competitive dynamics in the
software and Internet sectors, where it has been comparatively easy to create new businesses.
7. 7|
Why doso many
businesses fail?
Disconnects within “the logic
of the business”
Mismatch between value
propositions and evolving
customer needs
Value gaps: needs or wants
versus price
Unsustainable cost structures
Disruption from lower-‐cost
rivals that satisfy under-‐
served or unmet needs
Tired, obsolete products or
services
Channels that fail to meet
new expectations for speed or
quality of fulfillment
Changes in shopping or buyer
behaviors
Fixed, outmoded habits of
thought or business practices
A business model
describes the rationale
of how an
organization creates,
delivers and captures
value
8. 8|
Whatcan welearn from
entrepreneursand lean
startuppractitioners?
Lean methods to invent,
validate, refine and
scale new business
models.
Do small tests, learn by
doing, react quickly.
Fail fast, learn faster.
Test, iterate, refine.
At lower costs than with
traditional methods.
Agile discovery and
opportunity spotting
Uncover opportunities
to reinvent outdated
business models before
rivals get there first.
9. Entrepreneurs’
Toolkit
Business Model Canvas
Customer Value Canvas
Customer Development
Agile learning:
hypothesize, validate —
test, learn, refine.
“Fast fail”: celebrate, don’t
punish the innovators
Smart small, iterate; get it
right before you scale
“Pivots”
Design thinking
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CustomerValueCanvas
Start by identifying a set of customers — people who
share common needs, wants or behaviors.
Focus on high priority “jobs-to-be-done,” and then
identify customers’ unmet or under-served needs/wants.
Define/prioritize requirements for meeting those needs.
Identify customers’ desired outcomes (how they will
assess how well the “job” has been done).
Refer to “outcome-driven innovation” models (Strategyn) and various Harvard Business Review articlesfor deeper
thinking about “jobs to be done” and desired outcomes.
Value
proposition
that satisfies
those needs
14. 14|
Exampleof analyzing a
“job tobedone”for a
customervalue canvas
Segment Women who practice yoga ona regular basis
Job-to-be-
done
Practice yoga athome on days when they cannot
take aclass attheir studio orgym
“Pains” Finding time and space forpractice, storing props
Access to teacher-led classes when athome
Avoiding boredom from too much repetition
Finding classes that match their preferred yogastyle,
skill level, duration, schedule availability
“Gains” Staying strong and fit,learning to quiet themind,
expanding asana skills, improving mindfulness
Obstacles Technology to find ordeliver classes available (DVD,
online streaming video,smartphone apps, etc.)
Controlling playback while in ayogapose or sequence
Desired
outcomes
Practice X days per week (based on personal goals)
Motivation to practice, even on busy days
Maintain or loseweight; improve core strength, etc.
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Howdo established
businesses applylean
innovation methods?
Facilitated workshops to learn
and apply these lean startup
concepts and methods
Ground rules that balance
blue sky thinking with realistic
constraints or parameters
Ways to neutralize (or defer)
internal politics
18. Fromtheoryto
action
Business Model Canvas
Customer Value Canvas
Customer Development
Agile learning: ideate,
hypothesize, validate —
test, measure, refine
“Fast fail”: celebrate, don’t
punish the innovators
Smart small, iterate; get it
right before you scale
“Pivots”
Design thinking
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Visualize your existing
business modelbefore
creatinga newmodel
Develop a shared set of
concepts and vocabulary
across team members
Hands-on expertise in how
to apply the methods
New perspectives on
today’s business
70% of businesses discover
opportunities to improve
their existing business model
while working through this
learning exercise
“Ten Tips for Business Model Innovation,” BusinessModel Inc.
Learn by practicing on
something you already
understand
Uncover overlooked
opportunities in today’s
business
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Use sticky notesto capture
thekeyideasfor each of
the9 boxes inthemodel
Photo from a workshop in Europe
22. SomeWorkshop
Options
Learn how to use the two
essential canvases
Explore ways to re-‐invent
today’s business model
Generate new business
model opportunities
On-‐site or offsite meeting
Professional facilitator
Half-‐or all-‐day versions
Post-‐workshop coaching
or follow-‐up sessions
23. 23|
Learninghow toapply the
twoessential canvases
Assigned reading materials,
for background into the
frameworks and concepts
Optional before intro session,
required for the workshop
2-hour introductory session:
the Business Model Canvas,
the Customer Value Canvas
Exec sponsor sets the stage
(where to focus), outlines the
process and expectations
Facilitation provided by Informing Arts. Agenda detailsand innovation focusarea to bedeveloped with input from the
Executive Sponsor.
Half- or all-day workshop
Teams collaborate to create/
update canvases
Discuss insights, ‘ah ha’
moments, implications
Exec sponsor defines next
steps
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Howwe mightstructure
theengagement
Preliminary discovery session
with exec sponsor
Pre-workshop 1:1 briefing
sessions with SMEs
Agreement on where to
focus the innovationquest
Agreement on set of pre-
reading materials to be
assigned to participants
Facilitated introductory
session to present the two
canvases
Facilitated hands-on
workshop for participants
Follow-upcoaching
Elapsed time: 3-4 weeks,
from discovery to workshop
Exec sponsor’s time: 1-2
hours before the workshop
to set the context, sharpen
the focus; optional debriefs
afterwards
Meetings: 2 hours for the
introductory session, plus 4-6
hours for the innovation
workshop
1:1 or small group coaching
sessions over 30-45 days, to
keep assigned work on
target
Itemsin red are optional activities. The introductory session and workshop must be donein-person. Otherinteractionscould be
face-to-face or virtual, once initial relationship hasbeen established.
