Overview of Lean Startup and FastWorks

© 2014 Copyright Genpact. All Rights Reserved.
Thank You Lean Six Sigma
Hi FastWorks!
a paradigm shift
Sarvesh Tiwari
sarvesh.tiwari@genpact.com

Objectives
1. Situating FastWorks in the big picture
2. Understanding the philosophy
3. Key terms & concepts
4. Follow up and call for action

Preamble

GE ’s run on the wall street in the last 5 decades
3 clear and distinct phases...

GE’s Market Capitalization over the years
$13b
$601b
2000
Jack Welch
steps down as
CEO
1981
Jack Welch
appointed
as CEO
Feb 2014
$262b

Context: Market Value of biggest 150 US companies

GE Performance: Effects of Charismatic Leadership?*
*General Electric Performance over a Half Century: Evaluation of Effects of Leadership
and Other Strategic Factors by Quantitative Case Analysis
Richard H. Franke, Anthony J. Mento, Steve M. Prumo, Timothy W. Edlund
International Journal Of Business, 12(1) 2007 ISSN: 1083−4346
1. GE's real profitability in the first decade under Welch
did not improve
2. Real profitability increases in the remaining period
under Welch were largely due to causes other than his
(charismatic) leadership

Some correlating causal factors?
Push for
Globalization
GENPACT
founded

“We want to change the competitive
landscape by being not just better
than our competitors, but by taking
quality to a whole new level.
Variation is evil. And
once you reduce
variation, your costs are
improved dramatically
and your market share
gains are enormous”
Jack Welch
1995

Early Impact of Jack Welch’s adaption of Six Sigma
11%
14%
17%
13%
Revenue
increased
Profits
increased
Earning per
share increased
Operating
margins
increased
Results achieved over the first two years

1984 to 2004: Shift from “Labor Intensive” to “Thinking
Intensive” Source: “Mobilizing Minds” McKinsey & Co.

Thanks Six
Sigma but…
Fast Forward
to 2013-14

#4 Global 2000
#6 Market Value
#7 Most Valuable Brands
#21 Sales
#24 Most Profitable Companies
#44 Assets
But:
#90!!! Most Innovative Companies
GE on Forbes 2013 Global 2000 rankings

At the bottom of BCG’s 10 Most Innovative Large Comp
#10
#1

Explosion of a digital innovation like never before

“The Big will not
beat the Small
anymore. It will be
the Innovative &
Fast beating the
Slow & Mediocre.”
“Apple won the war
with ideas not with
cost reduction.”
2008

“GE will have to move at market speed
and with market intensity.
One of the things I've done personally
over the last 18 months is spend a lot
of time with VCs, entrepreneurs and
start-ups. Just trying to figure out
how they ran their enterprises.
GE has advantages they don't
have. But the challenge really is
speed. About measuring market speed
and making sure we are getting faster
whether in product introduction or in
customer acquisitions.”
2013

GE Leader’s Characteristics (LES circa 2002)
Speed vs Quality… a cultural momentum of inertia
1. Vision
2. Customer / Quality Focus
3. Integrity
4. Accountability / Commitment
5. Communication / Influence
6. Shared Ownership
7. Team Builder / Empowerment
8. Knowledge / Expertise / Intellect
9. Initiative / Speed
10. Global Mind-set

today?

Perfection?
(missing the wood for the trees?)

Decision making?

Collaboration?

Empowerment?
(Employee & Vendor)

One size fits all?

.99999 (Risk-Free “Perfection Myth” Cultures)
75% Right (Enterprise Risk Tolerance)
60% Right (Startup Risk Tolerance)
What are the ideas
and economic value
that have been lost to
GE Risk bands?
Risk-Free Perfection?

=+Growth Acquisitions Siloed
teams
Controllership
& compliance+ +
Examples
Workflow
“hell”
Customer
feedback
IT
Programs
tollgate
process
Acquisition
integrations
^

Thus
FastWorks

FastWorks advocates of Jeff Immelt

FastWorks is a set of tools, principles
and behaviors that will…
 Get closer to customers
 Increase speed to market
 Increase chance of success
 Make it easier to get things done

The Lean Startup Philosophy
• The concept of “an entrepreneur” includes anyone
who works within the definition of a startup: a human
institution designed to create new products and
services under conditions of extreme uncertainty
1. Entrepreneurs are
everywhere
• A startup is an institution, not just a product, and so it
requires a new kind of management specifically
geared to its context of extreme uncertainty.
2. Entrepreneurship is
management
• Startups exists to learn how to build a sustainable
business, which can be validated scientifically by
running frequent experiments that allow
entrepreneurs to test each element of their vision
3. Validated Learnings
• The fundamental activity of a startup is to turn ideas
into products, measure how customers respond, and
then learn whether to pivot or persevere. The goal is
to accelerate this feedback loop.
4. Build –Measure –
Learn
• To improve entrepreneurial outcomes and hold innovators
accountable, we need to focus on the boring stuff: how to
measure progress, how to set up milestones, and how to
prioritize work.
5. Innovation Accounting

The Startup Playbook Philosophy
• Don’t chase ideas that are simply features, or partial services,
that couldn’t compete in mature markets. To customers, these
are elective, much like taking a vitamin. Instead provide a
painkiller that relieves a customer pain point and forever.
1. Build painkillers, not
vitamins
• Be ten times better than your competitors. “You cannot be
incrementally better. Incrementalism kills companies.” Focus
on a strength that allows you to radically differentiate your
offering.
2. Be ten times better
• Understand a broad range of trends and data to help identify
the One Big Idea that can truly win a new market.
3. Ruthlessly focus on
your biggest ideas
• “If you consider how difficult and improbable breakout
success is in any given market, you can begin to understand
why it is so critical to use a battering ram of proprietary
assets…”
4. Play to your strengths
• Thinking “monopolistically” is a way to focus on building
market-dominating offerings. Provide this vision early in the
process to build winning ventures.
5. Be a monopolist

FastWorks, Lean, Six Sigma
Six Sigma >>|
Reduce defect. Variation is evil
Lean >>|
Eliminate waste from process
FastWorks >>|
(Whatever it takes) Get output in front of
customers ASAP (don’t wait for “perfection”).
Learn about it as much as we can.
Act decisively and quickly if the feedback
points in a new direction.

FastWorks Vocabulary
Customer Engagement: Customers must be a part of the solution. Co-create with customers early
and often to really bring value to your customers. Focus on customer pain points to build painkillers,
not vitamins.
Leap of Faith Assumptions: Understand, document and prove (or disprove) all the assumptions in
your journey. Success requires early learning and validation of key hypotheses.
Speed: Teams need to reduce the amount of time it takes to get through the “Build-Measure-Learn”
loop. Get comfortable with “good enough” decision making. There’s often no “right” answer for
innovation, as tough as that is for us.
Learning Measures: Innovation metrics are different. You need to find measurements that validate
learning against key hypotheses. Don’t get paralyzed by imperfect data.
Island of Freedom: Make sure that you have Executive sponsorship to protect funding and
resources.
Experimentation and Iteration: Experiment as necessary to learn from customers and quickly make
changes. Take the information that you have and quickly make adjustments as you progress.
Pivot or Persevere: A pivot is a change in strategy without a change in vision. If you find a that a
critical hypotheses is invalid, have the courage to pivot to a new hypothesis
Minimum Viable Product: A version of the offering that allows you to learn from customers with the
least amount of effort and development time. It tests your critical assumptions.

“PRODUCT”
can also be a strategic
internal initiative,
response to an RFP, an
ERP Implementation,
new service offering

FastWorks Framework
… from the
customers point
of view
1| Problem statement
… that are critical
to project success
2| Define leaps of faith
… accessible,
actionable &
auditable
3| Learning Merics
… tests to validate
assumptions
3| Build MVPs 5| Pivot or persevere
… make changes
based on learning

Innovation Accounting
The Three Learning Milestones
1.Establish the baseline
-Build a Minimum Viable Product (MVP)
-Measure how customers behave right now
2.Tune the engine
- Experiment to see if we can improve metrics
from the baseline towards the ideal
3.Pivot or persevere
- When experiments reach diminishing returns,
it’s time to pivot.

A minimum viable product (MVP) is the "version of a new product which
allows a team to collect the maximum amount of validated learning about
customers with the least effort.”
Visionary customers can “fill in the gaps” on missing features, if the
product solves a real problem
Allows us to achieve a big vision in small increments without going in
circles
Requires a commitment to iteration
MVP is only for BIG VISION products; unnecessary for minimal products.
Minimum Viable Product

Minimum Viable Product
The goal of a MVP is to test fundamental business hypotheses (or
leap-of-faith assumptions) and to help entrepreneurs begin the
learning process as quickly as possible.
A first product version to test our ideas as quickly and cheaply as
possible. This could be a throwaway prototype such as a mock-up
or a product increment, working software that is tested and
documented.
The MVP works together with a build-measure-learn cycle:
developing software, gathering customer feedback, and learning
from it.

Leap of Faith Assumptions
Leap of Faith Assumptions (LOFAs) form the basis
upon which you are supposing your product or service
has value (Value hypothesis) as well as scale (Growth
hypothesis).
LOFAs are the most critical elements of your plan
... the parts on which everything depends.

Build – Measure - Learn

Learning Metrics
Pivot or
Persevere
Actionable
Accessible
Auditable

Pivot or Persevere: Persevere
Sufficient progress to believe our hypothesis is
correct. A persevere decision is based on validated
learning.

Pivot or Persevere: Pivot
A “structured course correction designed to test a
new fundamental hypothesis about the product,
strategy, and engine of growth.” A pivot decision is
based on validated learning.

Thought: FastWorks as a Guiding Approach for ERP Programs
Define problem
1| Problem statement
Identify “leap of
faith”
assumptions
2| Define leaps of faith
Identify and track
learnings metrics
4| Measure
Validate
assumptions
3| Build MVPs 5| Learn from MVP
“Pivot or
persevere” based
on learnings
Design TestingFoundation
• Assess the business value of the processes
• Develop benchmarks for critical processes
• Identify significant process risks
• “Big Rock” Issues
• Identify ERP-Business Alignment Gaps
• Demo/POC of Oracle features to business
• Process walk by business for ERP team
• Consensus on priorities
• LOFA Assumptions
• Test Assumptions through Benchmarking
MVP: Minimum Viable Product
• Develop Processes with focus on synergy
• Leverage Genpact SEP, design frameworks
• Min customizations – max standardization
• Prioritize User touch over documentation / approvals
• Lots of POCs/Demons to showcase MVP, and feedback
• Drive Accountability through user engagement
• Mini-CRPs & User Storyboards to generate MVP learning
• Utilize Sprints to harvest MVP learnings into Solution
• CRP: Pivot or Persevere point
Closer to Business floor than ERP war room | Quicker rather than perfect-the-first-
time | Empowered decision-making | Emphasis on user engagement than approval
workflows | Continuous learning events and reiterative close-lopping through Sprints

Thought: Accelerate Every Step of ERP using FastWorks
Learn Faster
• Extensive
storyboarding with
users
• Continuous Learning
Events: for both ERP &
Business Teams
• Mini-CRPs, CRPs,
POCs, Demos, Smoke
Tests
• Cross-functional
ownership of process &
design across biz
• Failure Walks: Its OK to
fail, not OK not to learn
• Learning Tracker
Build Faster
• Mini-CRPs
• Reuse Design Patterns
• Agile for Incremental
Design & Development
• User involvement in
Unit Tests
• Continuous,
Incremental Integration
Builds
• More focus on user
engagement than
documentation
Measure Faster
• Engage user for feedback early
• Iterative mini-CRPs
• Storyboard Processes & Design
• User Liaison during Design &
Unit Test
• Smoke Tests
• Split Tests

For more, read the following

Thank You
Sarvesh Tiwari
sarvesh.tiwari@genpact.com

Overview of Lean Startup and FastWorks

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