The benefits of failing fast

In a recent conversation with a friend of mine, CEO of a small Consulting firm, he explained me how he energized his small company using Lean Startup principles and tools.

Especially when it comes to answer calls for tender or a request for a proposal, Frederic (his name) has gotten pickier.

My test, he said, is to ask when I can come and present my proposal. If the person asks to receive it by e-mail or tries to escape the presentation, chances are there is no genuine interest. I can save myself precious time for something doomed from the beginning. I won’t inflict pain to myself starting to answer. Fail fast, save time.”

Being still somewhat old school, educated in a system and at a time when failing was not fashionable, I realized that “failing fast” is not only about physical widgets or apps not working (even if called Minimum Viable Products) or services nobody care about except their creators, but also about the more mundane and lukewarm requests from prospects.

I recalled how many proposals I wrote myself, for which I got stupid excuses to turn them down, if any answer ever came. I could have failed fast and saved myself a lot of time!

Indeed, some prospects are asking for proposals to gather some intelligence on a subject, fuel their own creativity, get a free guideline to roll out the proposed program by themselves or just to please the purchasing department with more than their favorite proposal because the procedure requires at least three.

In a time of harsh competition it’s sometimes hard to discard an opportunity for business, but here one has to remember that every inquiry and call for tender is not a true opportunity.

And failing fast has real benefits, it saves time!

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How Lean can help startups – Do not repeat mistakes of established companies 1/2

If there is one way Lean can help startups, it is to provide guidance or “Lean inspiration” from the very beginning and prevent them reproducing the same mistakes of long-established companies.

>Lisez cet article en français

Most established businesses are built on an outdated model in most cases: the mass production of low variety products, regardless of the actual reality of their business.

This model is characterized among other things by:

  • an organization built on functional silos
  • hypertrophy of overhead functions called “support”
  • a pyramidal hierarchical structure
  • an obsession about lowest unit cost
  • seeking economies of scale

This set of characteristics influenced the structure, management procedures and the rules of the organization.

Yet most startups are preparing to face a demanding market awaiting highly customized products in small volumes, possibly with specific additional services. They may go for pure services e.g. mobile apps, something relatively new compared to established businesses settled before the Internet or mobile phones even existed.

Consumption patterns have greatly changed. Owning something in full property is no longer the single or even principal modality in some cases, think about pay per view, download on demand, rental, subscription and freemium for example.

Thus, a business in creation must adopt a structure fit for the different upcoming challenges:

  • customer satisfaction, which notably includes timely access to services they request; pre-sale consulting, delivery, after-sales service, installation assistance and / or operation, maintenance, etc.
  • the satisfaction of stakeholders, the partners, suppliers, investors, employees, possibly residents, local authorities, etc.
  • the satisfaction of regulatory and legal requirements, including tax, accounting, social, etc.

and all this in a sustainable way.

This structure will evolve over time, because the requirements are not the same depending on the size of the company, its markets and business volumes.

The difficulties that established companies face when looking to return to leaner structures, should encourage entrepreneurs to remain vigilant and embed Lean into the Vision from the start.

It starts with thinking in terms of value-creation flows rather than operational subdivisions. It is often related to as “value chains” or “value streams” that are built specifically to quickly deliver the value expected by customers, without being disturbed nor burdened by artificial , expensive “additions”, without significant contribution to value creation.

The examples which we can think of are:

  • tending over complicated dashboards and lengthy reports
  • installing quality controls to filter and retain defective products
  • granting statutory functions, well paid but non-contributory
  • multiplying hierarchical levels

Experience shows that once such structures are in place, holders, beneficiaries and “supporters” will find ways and means to justify their continuation and even strengthening them, this is Parkinson’s Law.

It is therefore easier to be vigilant and to control the development of such (often called supporting) functions:

  • put in place only what it is a strictly necessary condition for the satisfaction of non-negotiable demands or requirements, by customers, markets or regulation
  • keep them “minimum” from the start rather than fighting desperately to restrict them later
  • do not hesitate to dismantle or convert them if the original requirement disappears or can be satisfied by a more flexible, more efficient or cheaper alternative

>Move on to part two


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6 questions to frame your brilliant development idea

I was fortunate to interview Eli Schragenheim, well-known expert of Theory of Constraints, during his visit in our offices in Paris, October 2015. This interview is about the 6 questions to challenge, question, test or frame any new development of technology, product or service.

These 6 questions are:

  1. What value does it bring?
  2. What current limitation does it eliminate or reduce?
  3. What do people do now, without your development?
  4. What should users do in order to draw full value of your development?
  5. What features must be included?
  6. How do you integrate?

The 6 questions originated with the book “Necessary but not sufficient”, co-authored by Eli Goldratt, Eli Schragenheim and Carol Ptak, published in 2000. The 6 questions are still really actual as startups are hype.

During this interview, I made a link with the Lean Startup movement, the Minimum Viable Product concept.


Eli Schragenheim posted a series of articles based on these s 6 questions on his own blog.


Read more about how Theory of Constraints can help Startups


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How Lean can help startups – Introduction

This post is an introduction to a series of articles dedicated to Lean and start-ups, more specifically: how Lean can help start-ups.

Lean was revealed as “Lean Manufacturing” before spreading to virtually all business sectors and evolve to Lean Management.

Lean has long been seen as an approach (approach or philosophy) specific to existing businesses seeking to transform and adapt themselves to their new competitive environment. Yet if Lean was indeed born in an already established business in bad shape (Toyota), its principles, methods and tools are not limited to these kind of cases.

It is therefore likely that, although not yet much reported in the literature, cases of Lean applications can be found in the early foundation stages of new companies or during the takeover of firms.

It would be very surprising, considering the fame of Lean, that entrepreneurs would not have heard of, or would refrain to inspire themselves from Lean.

How can Lean help startups?

Let’s remind the Lean principles in the context of a startup:

  1. Define value (created) from the perspective of the customers, users or beneficiaries
  2. Create corresponding value stream
  3. Ensure smooth and fast flow of value to the customer
  4. Meet the expectations and demands (pull flow from customer)
  5. Strive for perfection

For this to be possible and viable, an entrepreneur must allocate the proper resources and refrain from the temptation to develop or deliver unnecessary features. This would most likely lead to resource consumption without creating value in return, what is usually considered waste in Lean lingo.

A start-up may seem Lean by definition:

  • With limited resources available, entrepreneurs are assumed to be naturally inclined to be careful with resource management, reasonable and acquainted with the (Lean) concepts of waste
  • Time-to-market (i.e. speed) is obviously a critical success factor, just as is the speed at which the financial flow from sales is returning, hence an assumed entrepreneur’s obsession with flow and speed

But this is not certain. Common sense is less common than one might think.

Moreover, all entrepreneurs have not necessarily been exposed to the benefits of Lean. Finally, even familiar with Lean, entrepreneurs do not necessarily think about its application in the context of a starting business or the creating of a spin-off.

That’s the reason for this series of posts: How Lean can help startups


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Want to avoid disruption? Then keep exploring

Barry O'Reilly

Article for The Economist Insights

Want to avoid disruption? Then keep exploring Want to avoid disruption? Then keep exploring

Businesses have always come and gone, but these days it seems that companies can fall from market dominance to bankruptcy in the blink of an eye. Kodak, Blockbuster and HMV are just a few recent victims of the rapid market disruption that defines the current era.

Where did these once iconic companies go wrong? To my mind, they forgot to keep challenging their assumptions about what business they were actually in.

Businesses have two options when they plan for the road ahead: they can put all their eggs into one basket, and risk losing everything if that basket has a hole in the bottom, or they can make a number of small bets, accepting that some will fail while others succeed.

Taking the latter approach, and making many small bets on innovation, transforms the boardroom into a roulette…

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