Wednesday, August 30, 2017

Using The Startup Way to Turn Big Orgs into Lean Startups

Written by Misti Yang, Contributor for Lean Startup Co.


In the opening paragraphs of Eric Ries’s upcoming book The Startup Way, Eric sets the scene: He arrived at GE in the summer of 2012 amidst a multi-hundred-million-dollar, five-year plan to develop a new diesel and natural gas engine. He knew next to nothing about the engine but a good bit about entrepreneurial management, and GE Chairman and CEO Jeffrey Immelt and Vice Chair Beth Comstock thought the insights he’d developed in The Lean Startup could ensure that the plan would succeed.


And the plan did succeed. GE released the test engine, known as Series X, sooner than originally anticipated and immediately received an order for five engines.


It was the start of a partnership that lasted several years and transformed GE’s business practices while also inspiring the company’s FastWorks program. It demonstrated to Eric that Lean Startup methodologies could help organizations of all sizes, and it inspired GE to train every CEO and top manager in what Eric now calls the Startup Way, which he explains in the book “combines the rigor of general management with the highly iterative nature of startups” and incorporates several Lean Startup processes.


The Startup Way includes several learnings from Eric’s work with GE (among other enterprise and high-growth organizations) and Marilyn Gorman was part of the original team at GE that worked with him to build training for senior leaders. Today, she is senior faculty at Lean Startup Co. and travels the world providing businesses with innovation tools and training. As a special treat for our community, Marilyn and Eric will be co-facilitating a limited-capacity workshop focused on The Startup Way during Lean Startup Week (Oct. 30 - Nov. 5) this fall.  


As a teaser for that workshop, below are a few lessons Marilyn has learned about teaching an established corporation to practice the Startup Way, along with additional insights from the book.


You need a leader.
The subtitle of The Startup Way is: How Modern Companies Use Entrepreneurial Management to Transform Culture and Drive Long-Term Growth. Understanding fundamental distinctions between “modern companies” and “old-fashioned companies” is an important first step in refashioning management in a large enterprise. One of the many distinctions Eric points out is that an old-fashioned company “is composed of managers and their subordinates.” But a modern company “is composed of leaders and the entrepreneurs they empower.”


Marilyn knows this truth firsthand. “A lot of people are saying, ‘We’re trying to drive a change to a more entrepreneurial mindset from the bottom up,’ and while it is important to start with small teams, you do need leader support. It is critical,” she says.


Without a commitment to a new approach from higher-ups, teams tasked to work with Lean Startup methodologies are more likely to be blocked by existing procedures and expectations. For example, being told, “There is no budget,” shuts down a project pretty quickly. As Eric recounts in The Startup Way, when working with GE, he asked teams to be honest about what they really needed, and “many of them simply needed senior leadership’s assurance that if they worked in this new way they wouldn’t be eaten alive by middle managers.”


Be ready to change more than your scorecards.
“I had companies call me when I was at GE and say, ‘Tell me about how you changed your performance management approach,’” Marilyn says, “and I couldn’t do it without talking about the Lean Startup mindset of building, measuring and learning. People would sometimes reply, ‘We just want to change how we score people at the end of the year,’ but there is no shortcut for implementing a Lean Startup approach.”


Marilyn recalls that as GE started to implement Lean Startup practices, management began to recognize that there were systems and processes that stood in the way of being successful. “Corporations have lots of policies in place to reduce risk and to put out as perfect a product as possible, but Lean Startup is all about taking risk and putting test products in front of customers,” she explains. “The natural evolution was realizing that we needed to change other things inside of the company.”


GE’s realization reflects two of the five key principles of the Startup Way: continuous innovation and the missing function of entrepreneurship. Leaders often want one key innovation that will unlock unrealized potential, but companies should be focused on developing a method for finding breakthroughs as a sustainable part of their long-term pathway.


However, without embracing entrepreneurship, long-term growth driven by new products is unlikely. In the book, Eric recommends starting by making entrepreneurship a core discipline, which means ensuring that someone is responsible for it on the org chart just as departments are responsible for marketing and finance.  


Start with, “What can we do.”
Of course, a fully functional Startup Way practice will take more than a box on an org chart. Ultimately, every department will be asked to work a little differently, and that requires some tough conversations across an organization. “Often the conversation will start with, ‘Here is what we can’t do,’ and in fact, the focus needs to be on what you can do,” Marilyn advises.


In the book, Eric shares the story of a leader who realized that the legal department was preventing rapid innovation, and he wanted a solution. He facilitated a meeting with everyone in the legal department. The legal team actually lamented having to always tell people no, but felt constrained by rules and regulations. The solution: a one-page document that laid out a series of parameters within which teams would be pre-cleared to experiment with new ideas. By working with the legal team to brainstorm what could be done, the company was able to speed up product development.  


When things get hard, eat chocolate.  
“Making this kind of profound change to an organization’s structure is like founding the company all over again, whether it’s five or a hundred years old,” Eric reflects in The Startup Way. It is what he calls “the second founding,” and founding a company is not easy work.


“It’s hard, and it’s going to take time. But, chocolate helps,” Marilyn jokes. Plus, it is worth the effort. “At GE, we started to work faster and simpler. We were learning more quickly about opportunities for success and what opportunities would fail, so we could stop wasting time on them. It definitely had a positive impact.”


Join us at Lean Startup Week October 30th-November 5th, where Eric Ries and Marilyn Gorman will co-lead a 4-hour workshop focused on "The Startup Way". It will give participants an opportunity to consider some of the challenges of bringing Lean Startup practices into an enterprise and address what it takes to scale and deploy new approaches in their own companies. Participants will also receive a workbook featuring tools that they can use to implement the Startup Way. You can pre-order "The Startup Way" here.

Friday, July 21, 2017

Lean Startup Week Call for Proposals is Open Until July 31

Guest post by Jennifer Maerz, Program Chair of Lean Startup Co. 

Some exciting news about this year’s Lean Startup Week (Oct. 30-Nov. 5) for all you potential speakers out there: we’re shaking things up in 2017. The flagship conference is directly tied to Eric Ries’s upcoming book, The Startup Way, and we’re hosting the event at two locations in downtown San Francisco (The Warfield and The Village). We’re bringing to life new case studies, advanced strategies, and inspiring areas where Lean Startup is making an impact around the globe, with an emphasis on how to put the practice into place for the long haul at large organizations—from the tiny startup that ballooned to the government or corporate team that’s only known extra large operations. If you’ve ever considered applying to speak at our conferences, now’s the time to go for it. This year will be a biggie for the Lean Startup community.

What We’re Looking For 

This part hasn’t changed. We’re passionate about bringing in fresh stories about how Lean Startup methods are being practiced in startups and established companies, nonprofits and civic organizations, and other areas we’ve yet to explore from the stage.

Our goal is to bring the most interesting, relevant, and impactful stories to the conference. We’re looking for practitioners who are doing the real work, particularly women and people of color, and specifically Lean Startup practitioners working at the intermediate and advanced levels. That’s where you come in—especially if you haven’t spoken at our conferences before. As a speaker, you’ll have the opportunity to share your advice, insight, failures, and successes in order to help and benefit from the Lean Startup community.

What is Your Lean Startup Story? 

If you have Lean Startup experience to share, we encourage you to propose a talk via our Call For Proposals form regardless of whether you have public speaking experience. Submit your idea as a short video, ideally under three minutes. iPhone videos are totally acceptable, just make sure the sound quality is high enough that we can hear you. Here’s an example of a speaker application that we loved.

There are a limited number of spots available to speak. Below, you’ll find a few helpful tips on how to submit a proposal:

  • You don’t have to be a Lean Startup all-star to apply. You just need a good story, useful tips for intermediate/advanced practitioners, compelling advice, or practical applications to share. 
  • The core of your proposal should be simple. Focus on answering one of the questions posed in the Call For Proposals form (you’ll find them on page 2). 
  • Deliver the pitch in your application as though you’re speaking from a stage. Although there’s still time to practice, stage presence matters. 

Would You Rather Attend? 

Lean Startup Week is the best way to connect with 2000+ other experts in the Lean Startup community. You’ll receive practical ways to immediately implement the Lean Startup methodology into your daily business. We’ve got a package for every budget (and options to bring your entire team at an affordable rate). Join us.

Tuesday, June 20, 2017

The Evolution of THE STARTUP WAY Cover

Guest post by Marcus Gosling, VP of Product, Long-Term Stock Exchange.


I’m excited to reveal the final cover for Eric’s next book, THE STARTUP WAY, coming October 17. I’ve been working with Eric since the IMVU days and designed the cover for The Lean Startup… I was excited to help with the new cover and, after months of testing different iterations, we’ve decided on a design that checks all the boxes that Eric, the Crown Business publishing team at Penguin Random House, and I wanted to hit going into this process:

  • It’s eye catching, whether on a bookshelf or online storefront
  • It demonstrates a clear evolution from The Lean Startup
  • It captures the book’s message of entrepreneurial management
  • And, of course, it tests well with buyers





The first drafts I showed to Eric and the team played with two graphics: an infinity symbol and a chevron. The infinity symbol represents the continuous innovation that’s possible within any organization, regardless of size. The chevron represented a clear path into the future through entrepreneurial management. While both are essential concepts to the book, the chevron was a clearer departure from The Lean Startup circle. We looked at a number of color treatments for both graphics and knew we wanted to test several options.


We also looked at the cover options in a field among other business books. It was important to know that our jacket would stand out to readers looking for the next great business book.

Once we decided to focus on the chevron shape, I started playing with the color scheme -- some variations on The Lean Startup scheme and some total departures. While anyone who caught a glimpse of the options had an opinion, I knew we wanted to test buyer decisions rather than simply survey friends and family.

We ran ads targeted toward business readers on Facebook with the four different cover variations shown above. Clickthrough was strongest on the red cover with silver in second. We tested the actual purchase decision on our testing site, thestartupway.co. The blue covers led the way, followed by red, then silver a distant fourth.


We realized we ran the Facebook ad with the cover on a dark backdrop while the testing site had a white background. Given most buyers are shopping online, we had to see how the covers would look in an online retailer’s storefront. As you can see on the CEOreads page above, the silver was quickly lost on the white background. I tweaked the color schemes to find a blue chevron we all liked and we moved forward with testing one red and one blue design.


Down to these two color schemes, I extended the chevron to the edges of the page, adding to the boldness and drama of the design. With that change in place, Eric had a new test in mind, one we had run while designing The Lean Startup cover.


Using a website called fivesecondtest.com, we showed participants one of the two bookshops above for five seconds. When the image disappeared, we asked which books they recalled seeing. 2/3 of all respondents named The Startup Way as one of the first three books they remembered, with participants shown the red cover slightly more apt to name the title.

Anecdotally, but interestingly, a few participants mentioned the “red book” or the “orange business book” while there were no comparable mentions for the blue cover.


We continued testing clickthrough on Facebook, where there wasn’t a discernible difference between the red and blue covers.

 

At the same time, we tested purchase decisions on the book landing site, where the red cover held a slight edge over the blue. Given the buying preference for the red cover (and my and Eric’s personal inclination for it, assuming testing didn’t show it to be a terrible option), we decided to move forward with the red design.


Once we were settled on color, I spent a Sunday afternoon, paintbrush in hand, modifying the brushstroke of the chevron.


The outcome of the paint party was an evolution in chevron design, from smooth to more energetic. Eric liked the options with more streakiness to the chevron; we both felt the streakiness indicated a work in progress. The busier the streaks became, though, the more the title became lost in the design.


While the silver title, much like the silver cover, would look great on a bookshelf we decided to see what it looked like in an online storefront vs. a white title. It was immediately evident that the white title popped off the page regardless of how streaky I made the chevron. While Eric and I continued to tweak, we stuck to a white title from then on.


We played with chevron angle, thickness, size, streakiness, and splatter. The above shows how far we’ve come from the first draft. We tweaked accent colors, font style, font size, and font spacing. Three and a half months after our first conversation about chevrons and infinity symbols, we’re excited to reveal the final cover for THE STARTUP WAY:



Thank you to the Crown Business team who managed the Facebook and five second testing, to anyone who preordered through the landing site (whether you knew you were part of the testing or not!), and of course to Eric for helping balance art and science in the design process. We can’t wait to hear what you think of the physical product when it hits shelves October 17!

Monday, April 3, 2017

Lean Startup Conference Comes to New York & London

Guest post by Melissa Moore & Jennifer Maerz of Lean Startup Co. 

Over the last eight years, we’ve learned that our Lean Startup community members are constantly searching for better ways to build and scale products. Whether you need advice on how to design a good experiment, how to get buy-in from your boss, or what key metrics to track to hold your team accountable, we’re here to help.

We’ve got two learning opportunities for you this spring: 

Join us at Lean Startup Conference New York (May 10-11) in Brooklyn for an intensive two days of specialized corporate innovator education and networking. You won’t just hear inspirational and motivational talks (though we’ll have plenty of that!). More importantly, you’ll get effective how-to’s on the next steps for applying Lean Startup within your organizations. Our workshops and keynotes cover:
  • Connecting Lean Startup strategy to execution to avoid siloed efforts that fail to shift the organizational culture, with Lean Startup Co. senior faculty member Jonathan Bertfield 
  • The importance of creating islands of freedom, with Lean Startup Co. senior faculty member Marilyn Gorman 
  • Planning, tracking, and running experiments & framing teams’ work around innovation, with Sense & Respond authors Jeff Gothelf and Josh Seiden 
  • Exploring the key components of and strategies behind robust customer discovery, with The Startup Owner’s Manual co-author Bob Dorf 
  • How Microsoft is making the change from traditional to Lean, with Cindy Alvarez 
  • Unlocking your company's innovation capital, with Launchpad Co-founder and Executive Chairman Jim Hornthal 
  • How Lean design systems allow teams to move fast and scale design, with GE Digital Design Director Ken Skistimas and Carbon Five’s Courtney Hemphill 
  • Lean concepts that helped the design transformation at Nordstrom, with Jyoti Shukla 
Check out our initial New York program details here.

If you live closer to Big Ben than the Big Apple, we’ve got something else in store for you... 

We’re holding the Lean Startup Summit London (June 13 & 14) during London Tech Week to bring our innovation training across the Atlantic, featuring seasoned Lean experts from Silicon Valley and around Europe. This summit will focus on the practical ways UK organizations in areas like fintech, cleantech, Lean Impact, and Lean enterprise continuously adapt and innovate for the long term through techniques validated in environments of extreme uncertainty.

Get the initial London program details here, including:
  • How to implement Lean Startup (a foundational workshop for newbies and a refresher for the pros), led by Lean Startup Co.’s Phil Dillard 
  • Practical tools to set up, run, and measure innovation experiments, with the founder of the Business Model Canvas, Alex Osterwalder 
  • Build a transformation roadmap for large organizations, with former Pearson SVP Sonja Kresojevic
  • Fireside chat on GE’s FastWorks journey—including how the company has developed, measured, and scaled the program to 250,000+ employees—with FastWorks Skills Director SinĂ©ad Clarkin 
  • Fireside chat with Pernod Ricard’s Head of Employee Development on how the beverage company embarked on a 1,000-day, Lean Startup-driven business transformation journey called “Project Ingenuity” 
  • A practical guide to innovation accounting with The Corporate Startup co-author Tendayi Viki 

As an attendee of either event, you’ll get an extra bonus: a virtual keynote by Eric Ries, along with a pre-publication copy of his latest book, The Startup Way, which focuses on the implementation of Lean Startup techniques inside large companies. Bring your burning questions for this interactive talk, and Eric will do his best to get them answered.

The Startup Way won’t be available to the public until October, but as an attendee, you’ll receive a special early conference edition of the uncorrected paperback proof, being printed especially for you this summer. Attendees will also receive the hardcover book in the fall.

We’ll have even more to announce in the next few weeks leading up to the event. We hope you’ll join us in New York and/or London to get the latest skills sets and techniques necessary for building a modern company.

Monday, February 27, 2017

Announcing my next book, The Startup Way

In the five years since I published The Lean Startup, I've worked with organizations of varieties and sizes I never imagined would be interested in the ideas I wrote about in that book. And what I've learned is that lean isn't just for five-person startups: it's for everyone--especially everyone who wants to thrive in the quickly changing world we now live in, where the only guarantee is that we don't know what's coming next. As you know, I believe uncertainty is a challenge rather than a problem: It's all about how you manage it. That's the message I've been bringing to companies as big and established as GE, and as a new and rapidly expanding as Dropbox. I've talked about it with non-profits, local governments, and even the Federal Government (where they're now applying lean to everything from immigration benefits to the system that generates the nuclear codes!). The Startup Way is full of the stories of hard work we did together as these organizations changed not just their ways of working (in areas ranging from product development to internal processes like HR and legal) but their core cultures, to become more nimble and innovative. It's also full of stories of many other organizations that have begun to adopt these methods whether or not I was involved.

Across the board, all of them are engaged in one thing: entrepreneurship.

It may sound crazy to you to call the Federal Government entrepreneurial. Or that a company like GE, which was founded in 1892, is comparable to one like Airbnb, which was founded in 2008. But both of these things are not only true--they're the key to The Startup Way.

Regardless of size, mission, or sector, no organization can survive without the ability to adapt continuously. I believe that ability has to be a structural part of every organization--that companies need a standardized way to test ideas, run experiments, and follow through on the ones that will bring sustainable growth and long-term impact. If you've read The Lean Startup, those ideas will sound familiar. In that sense, The Startup Way is a book about how to use Lean Startup tools at scale. But it's also a book about leadership. No tool can bring change if it doesn't have the support of the people in charge, who, after all, inspire and direct others to new heights.

The book is a combination of real-life examples of how these leaders have done just that, and deep explanations of the methods and practices that together make up The Startup Way of working. It's been truly inspirational for me to see so many smart, passionate people make real change in these last years. My hope for the book is that it will give many, many more the tools they need to keep that change growing and spreading. I can't wait to see what happens.

You can pre-order the hardcover edition here. Your order will grant you access to The Leader's Guide community, an exclusive network of new and experienced Lean Startup practitioners, where I'll be sharing excerpts from the book and the results of the design and content testing I'm doing to shape the final product.

Sunday, November 6, 2016

Please Vote

Thank you to all of you who joined me for Lean Startup Week 2016! I can't tell you how moving it is to get to shake so many hands of entrepreneurs from around the world. Your passion and enthusiasm is contagious.

I wanted to share a video with you, which contains my opening remarks from the conference. It's mostly my reflections on a new set of ideas about entrepreneurship as a management discipline, and in a normal year that's what I would be highlighting in this blog post. But ever since I gave the speech, most people have wanted to talk to me about my brief editorial views on politics (which come at around the 9:00 mark, if you want to skip the management mumbo-jumbo).

This is not an ordinary year and it requires us to take extraordinary steps to safeguard our community and our nation. I've pasted a transcript of my that part of the speech below the video. And at the bottom of this post I have some links for for further reading and suggestions for how to take action.

If you're thinking about voting but aren't sure if you can or how to do it, please email me. I will personally try and help you however I can. Need a ride to the polls? Need to know if you're registered? Aren't sure where to go? I'll do my best to hook you up.

Please vote. Thank you,

Eric






I think some of you have noticed that in the United States we have an election coming up. 
Normally the thing to do in a polite space like this for me to say, "listen it's very important to all of you to vote. so please vote." and that's it. Everyone would say that's great. 
But this is not a normal year and I don't really feel that is adequate to the challenge that we face as a nation. So I know this will make some people unhappy but I feel the need to editorialize for a moment so just bear with me. 
This is not a normal election and these are not normal times, when you can vote if you feel like it or you can cast a protest vote if you want to. I think all of us need to view this as a moral obligation to stand up for the values that make this country great. The practice of democracy and the ability for people to come together and build a civic Republic is under threat. We have to stand up for that. 
This is very personal to me. My grandparents were children of the depression and the Holocaust. I have ancestors who fought for the USA in the Pacific and who were victims of the death camps in Europe. They lived through a darkness that I can scarcely imagine. They lived through it but they never talked about it in the past tense. They never boasted or bragged or said we defeated the darkness and it's over. They always said to me and my sisters: beware the signs, know your history, be ready. 
I mean I grew up in San Diego California as a middle-class white American. This country's been so good to me - I mean, look at me now - so as a child I found this story hard to take seriously. I thought they were paranoid. When I was a teenager, I would roll my eyes. I was not that interested in that message and I frankly thought they were being silly with such dark talk. 
Let me tell you, I don't think that anymore. 
In 2016, I take this very seriously. 
I think we are seeing that darkness come again and we have an obligation to stand up to it. If you are a US citizen, I ask that you exercise your moral obligation - your sacred obligation - and vote.
At the conference this year, for the first time, we are going to be phone banking and doing get out the vote activities. If you would like to join us, please do, it is strictly optional. This is important too: for those who that don't agree with what I just said you're still welcome here. It's not the official position of the conference and I hope that everybody will feel comfortable talking about this and bring the same experimental rigor and open-mindedness to this as to any other topic as we go through the conference. 
I think it's critically important. Entrepreneurship requires a supportive public policy effort. There are real policy implications for what we do as entrepreneurs also on the ballot this year so I urge you to take it seriously. What does a pro-entrepreneurship public policy look like? The evidence is clear. It requires an openness to new people and new ideas. It requires us to imagine what someone was doing in the minutes before they became ane entrepreneur: they were a student, an immigrant, an ordinary worker. We have to have policies that encourage orindary people to take new risks and try new things. These policies are not easily categorized as "right" or "left" so they get lost in the din of campaign coverage: abolishing non-compete agreements, portable health insurance, open regulations that allow new business models, open data and government APIs, appropriate bankrupcy laws, patent reform. The list goes on. 
If you study the candidates' campaign websites, whitepapers, and promises, as I have, you'll realize there is only one choice. 
And just in case I wasn't completely clear earlier, I want you to vote. 
I personally will be enthusiastically and unapologetically voting for Hillary Clinton and I hope you will do that too. Thank you. 
I know not everybody is applauding right now. That's ok. We don't normally talk politics at events like these, and some of you probably think I've opened up a can of worms. I accept that. Please, I want you to treat each other with respect. This is an important election but we have to still listen and talk to each other and take each other seriously. Thank you.



The following links and suggestions come from my friend Reid Hoffman. There's also a movement afoot in Silicon Valley for startups to give their employees the day off Monday and Tuesday so everyone can both vote and help in their communities to get out the vote. If you are thinking about doing this and need help or suggestions, please email me and I can share resources with you.

Take Some Action:
Check Out Select News and Writing:
Join me in sharing these messages on social media:

Tuesday, October 11, 2016

The Future of Corporate Agility

Guest post by by Jennifer Maerz, contributing editor of Lean Startup Co. 

The solution to long-term innovation in companies obviously isn’t having one person come up with all the bright ideas and then translating those ideas to teams that execute them. We’re looking at huge shifts in workplace structures that involve reimagining things like who holds the power to make decisions and how we judge performance, all the way down to how we run meetings to encourage constructive disagreement and a diversity of ideas.

A big part of adopting Lean Startup in an established company involves fundamentally shifting the way organizations manage people and ideas. Mark Raheja, founding partner at August, a consultancy focused on organizational development, will be speaking as part of the enterprise learning track at Lean Startup Week about agility at scale. Mark has created transformational programs for GE, PepsiCo, and American Express while working as a partner at Undercurrent, and he currently works with enterprise and fast-growing companies to crack the riddle of how to organize and operate quickly without breaking.

This interview is part of our “Future of….” series that includes interviews with experts out in the field on the Future of Workspaces, Government, Skill-Sharing, and more in the weeks leading up to Lean Startup Week.

In thinking about the future of corporate agility and management, what modern practices are most vital to today’s leaders? 

There are a few big shifts taking place. We tend to describe the industrial era model as being closed, efficient, and controlled. Those aren’t necessarily bad principles of operation; they were very well-suited to the time. Generally, though, we’re talking about shifts from being closed to being open. That can apply to the technologies you use and how you collaborate—whether you’re using cloud-based tools that everyone can be inside of and see all the time, or whether you’re using tools like Slack that have the biases of openness. It also has to do with the way you’re doing work. So do you work out loud with each other? Do you share work in progress or wait until it’s completed? There are a set of practices around each of these principals.

There’s another general stream of our work that has to do with decentralization of authority on some level. It used to be that because everything moved slowly you’d have all the decision-making authority nested at the top of an organization. A very big area of emphasis for us is working with leaders and introducing practices or tools that help make it safe for authority to move from the center to the edge of the hierarchy. There isn’t one thing that does that. There are a whole bunch of different things that do that.

One of those things is getting explicit about decision rights. Actually writing down who has the ability to make what decision. In most organizations that’s not even clear. In the absence of that clarity it just kind of floats to the top. So there’s a lot of work around trying to set teams up with the authority to do whatever work they need to do to accomplish a mission without having to ask for permission.

We actually spend a good amount of time focused on meetings—which can sound boring, but they’re the gateway drug to new ways of working. They’re one of the primary vessels of work that fills up everyone’s time, so how meetings work is a high leverage point to change work habits. We work to make meetings more structured, bring the role of facilitation into them, clarify the purpose of the meeting—are they about decision making? Prioritizing? Setting strategies? We bring structure in a way that tends to be liberating.

When you think about leaders transitioning into different roles, one of the scary things for some of these people has to be the fact that they’re used to having a lot of control, as well as the boost they get from having so much authority. 

Definitely. In all the literature around change, often the middle layer gets called out as being this big barrier. While technically it’s true that this is where we can run into challenges, though, I tend to sympathize with people in those roles. They’re in the hardest spot. They’re the ones who some senior leader is making all sorts of promises for about what is going to get done. You also have these people who spend 10-25 years moving up the corporate ladder and they have a lot on the line. They haven’t had the huge payoff that comes at the end of that climb in a large organization, and the systems and processes inside these large organizations are still incentivizing the wrong behaviors or pushing the wrong principles. So you have these leaders who have a lot to lose just by letting go and letting their teams go without their control. Basically we’re asking them to accomplish huge amounts of work and take on a certain amount of risk in transitioning to this new way of working while the reward is unclear. The other thing is they’ve gotten good at traditional management. They’ve been trained to lead in a way that’s starting to go away. So it’s really destabilizing from a psychological perspective; there’s no guarantee that they’re great at the kind of leadership companies need from them today.

So how do you weigh the decision of how much this leader or employee can learn and adjust to the new way of doing things and how much is this a situation where this person is now never going to be a fit? 

There will always be people who fall into that latter category, where the motivation just is not there. Or they’re motivated in a separate direction. But our experience is that it’s a relatively small group blocking change.

There’s a tremendous amount of unlocked potential and capacity inside existing teams and leaders. If you can make it safe and you can create the conditions for them to practice and try these new ways of working, they tend to flourish. They embrace it for the most part and everybody wins. You get a more productive organization that is able to work and shift faster and you get more engaged people who love their work.

You said a lot about creating a safe environment. How do you rethink performance reviews in the context of encouraging new practices? 

Performance management is one of dozens of systemic barriers to new ways of organizing and working inside big legacy organizations. The biases are kind of insidious. But it’s not just that. It’s how they budget. It’s how they do strategic planning. It's how they recruit people. If you’re really going to do this transition, all of those things need to be revisited with a fresh pair of eyes.

If you’re diving into performance management specifically, though, you see a lot of situations where it’s optimized for the few or the individual rather than the organization. You actually see people behaving in ways that aren’t for the benefit of the organization because they’re optimizing for themselves. You’ll have two teams that need to collaborate but they’re actually incentivized to do conflicting things. So you have to revisit structure. One thing we tend to emphasize is a general shift towards rewarding teams over rewarding individuals. That way you're trying to avoid this rogue hero behavior and trying to optimize teams to achieve together.

I’m curious how you see diversity fitting into the future of management. What does it mean for modern teams to reflect diversity when it comes to hiring people of color, people along the gender spectrum, etc. in shaping the company’s POV? 

We are very strong advocates for diverse and inclusive work. There’s plenty of data out there about why this is a good idea. Especially because it is right and it feels better but also because it builds more successful organizations. You need a diversity of perspectives and opinions; it’s like a generative force to have more of those present.

The more diverse your organization gets, the harder it will be to come to a consensus as a group. You’ve built in a systematic tendency to disagree, because you come from different perspectives. And that’s partly why we spend so much time with organizations trying to get them to stop trying to agree with each other. It might feel good to agree, but you don’t need that. What you need to agree on is how can we make this a place where new ideas are safe to try and keep moving.

One other thing we tend to emphasize with clients is something we call “rounds,” where you’re going one by one and you’re surfacing questions and reactions from an individual level instead of just letting everybody talk at each other, which biases us. Often in meetings there are a couple of voices that tend to dominate. So some of our work is about creating environments where all perspectives are represented and heard. That’s why structure in a meeting is a good thing. Typically the junior people and the introverts don’t say anything, and these days they tend to have some of the most valuable perspectives.

August is also a lab in and of itself. As you’re trying to promote better management practices for other companies, what have you come up with within August that you’ve found interesting?

We tend to be out on the proverbial edge of the work we’re doing and so we are motivated to push the envelope on these principles. It’s been just over a year [since August was founded] and we’re a radically transparent organization—our Google drive is public. A pocket of it has confidential client information but otherwise every other document we create we host publicly.

We don’t know many organizations operating with this level of transparency. It translates to our documents but also to our salaries and our equity models. We’re constantly learning the nuances of this transparency. So, for example, what’s it like to have our salaries public? Generally we believe there’s a huge systemic plus in us being open about them, but not all team members will be comfortable with that on an individual level. And so it’s interesting, reconciling our ambitions for having an impact on a system level with what is comfortable internally.

Both inside clients and internally we’re finding that there are bigger errors to these changes and you have to creatively find the solutions. We’re trying to stick to the principles and let the future emerge. So far the wheels haven’t fallen off.


Hear more from Mark and other leaders pondering the effects of long-term innovation on the way we do business at Lean Startup Week Oct. 31-Nov. 6 in San Francisco. Take advantage of our special fall pricing and save up to $350 before October 15th.