2019 Lean Startup Conference

1. Caterpillar: Non-Confidential Caterpillar © 2019. All Rights Reserved
Getting Leaders On Board: Don’t Let Your
Innovation Program be Pronounced Dead on Arrival
25 October, 2019
Ben Hafele

2. Caterpillar: Non-Confidential Caterpillar © 2019. All Rights Reserved
Stages of Innovation
Investment-
Ready Business
Lean Startup & Design Thinking New Product Introduction
Business /
Product
Strategy
What should we offer, if anything?
How do we scale it?
Seed Funding
$
Investment Funding
$$$$$$$$
Business goal of Lean Startup & Design Thinking
Reduce the defect of building something nobody wants
Adapted from The Process of Design Squiggle by Damien Newman, thedesignsquiggle.com

3. Caterpillar: Non-Confidential Caterpillar © 2019. All Rights Reserved
Investment Readiness Levels
Search Execute
Lean Startup & Design Thinking
IRL
0
IRL
3
IRL
5
IRL
6
IRL
7
IRL
9
IRL
4
IRL
8
Investment-
Ready Business
IRL
1
Investment
Readiness
Level
Description
IRL 1 Complete First-Pass Canvas
IRL 2 Market Size / Competitive Analysis
IRL 3 Problem / Solution Validation
IRL 4 Prototype Low Fidelity MVP
IRL 5 Validate Product / Market Fit
IRL 6 Validate Right Side of Canvas
IRL 7 Prototype High Fidelity MVP
IRL 8 Validate Left Side of Canvas
IRL 9 Validate Metrics That Matter
Source: Steve Blank blog post - It’s Time to Play
Moneyball: The Investment Readiness Level
IRL
2
Use a concept similar to the Investment
Readiness Levels to measure progress
across all Search stage projects.

4. Caterpillar: Non-Confidential Caterpillar © 2019. All Rights Reserved
Vetting & Metered Funding
Risk Valuation / Funding
Note: This never goes to zero.
IRL
0
IRL
3
IRL
5
IRL
6
IRL
7
IRL
9
IRL
4
IRL
8
IRL
1
IRL
2
Do not over-fund Search stage
projects; rather, make projects
earn additional funding.

5. Caterpillar: Non-Confidential Caterpillar © 2019. All Rights Reserved
“Search” Stage Innovation Portfolio
Project Name Lead Coach Description
Next Sprint
Report-Out
IRL (0-9) Age (months)
Ballpark
Revenue
Opportunity
Excalibur Hamid Chai Blah blah 15 June, 2019 8 9.6 $30M
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Dingo Jessica Chai Blah blah 3 June, 2019 5 3.8 $10M
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Nimba Joao Nate Blah blah 25 May, 2019 2 2.1 $20M
Use Investment Readiness Level
and Age as two primary portfolio
metrics for Search stage projects.

6. Caterpillar: Non-Confidential Caterpillar © 2019. All Rights Reserved
Defining Success & Failure
Imagine in 2
years you…
Scaled /
Executed
Did Not Scale
/ Execute
Achieved IRL9
Could not
achieve IRL9
Success Failure
Failure Success
Make sure that your team and
stakeholders understand the
definition of success and failure.

7. Caterpillar: Non-Confidential Caterpillar © 2019. All Rights Reserved
Summary
• Make sure your team and stakeholders understand
• the business goal of Lean Startup & Design Thinking
• the definitions of success and failure
• Do not over-fund Search stage projects; rather, make projects earn additional funding
• To measure progress across a portfolio of Search stage projects, use
• a concept similar to Investment Readiness Levels
• project age
Questions / Comments / Debate ?