I’d like to share with you just a a few of the fresh ideas and new ways of thinking shared by Eric Ries at a LeanDC talk at American University last night.
For those who’ve never heard of Eric Ries, he is the visible speaker for the lean startup movement. You can read more at TheLeanStartup.com but briefly, the lean startup movement is about a huge paradigm shift in our ideas about management.
We are still using legacy ideas about entrepreneurship so the failure rate is embarrassing
Evidently, lots of people agree with him; lean startup incubators are popping up across the country, and universities like Harvard are creating lean startup courses, all around the ideas Eric Ries uses and describes in his blog, Startup Lessons Learned. (he hasn’t even put out a book yet – that’s coming).
Master the Details in the Bone-Crushingly boring Act Two
There comes a time in the life of every startup when what you’re doing is no longer sexy.
Eric compared this period to the company story montage that happens in movies about businesses. Act One is always the setup, the good and the bad about the protaganist, that comes into play when they face a great challenge.
Act Two is always a photo montage of the protaganist setting up the business, maybe moving in, happy shots with customers, getting bigger, hiring people and eventually ends with the protaganist on the cover of a major magazine cover. This part always takes about two minutes in the movie and it’s usually setup for some major challenge in Act Three.
Eric says that the most important act for any company is Act Two – the no-longer-sexy middle part when all the fun and games are over and the ‘bone-crushingly boring’ stuff like product development meetings, and learning how to prioritize occurs.
In Act Two you’ve got to figure out how to constantly create value and eliminate waste, you’re still making those important strategy ‘pivots’ that may send you in a brand new direction entirely, you’re figuring out how to support your existing early adopter customers, while at the same time position yourself for new products. And all of that is the boring stuff, and the hard stuff.
I asked Eric this question: What was the hardest thing and/or most boring change that had to be put in place in Act Two to get to Act Three?
And he responded: “The Five Whys”.
“The Five Whys” is a lean manufacturing technique where you ask simply, why something occurred – but you must ask five times. I guess there is some magic in the number five, but evidently, when you keep asking why, you get to the root cause of the problem and deal with that, rather than wasting time and energy on a solution that doesn’t address the problem.
In a manufacturing environment, you can’t stop and revisit your process for three months. You have to keep moving. So he says that at his company, every time there’s a mistake, there is an immediate post-mortem; a simple, short meeting where the root cause is identified through five whys analysis.
Why, Why, Why, Why, Why
Here’s a common five why example
- I gained five pounds over the holidays (problem)
- Why? – That damn rum cake.
- Why? – After that my sweet tooth kicked in and I wanted more sweets.
- Why? -I’ve been dieting for so long that I’d been deprived.
- Why? – My diet doesn’t allow sweets for rapid weight loss.
- Why? – (But I gained), maybe my diet doesn’t work for me (root cause)
- I will find a diet that allows me to lose weight and also have sweets, so I won’t over do it (conclusion).
“ The real key is to encourage the trouble-shooter to avoid assumptions and logic traps and instead to trace the chain of causality in direct increments from the effect through any layers of abstraction to a root cause that still has some connection to the original problem. Note that… the fifth why suggests a broken process or an alterable behavior, which is typical of reaching the root-cause level.
“It’s interesting to note that the last answer points to a process. This is actually one of the most important aspects in the 5 Why approach…the real root cause should point toward a process”
If you follow five whys, the system will teach you where you need to make adjustments.
My key takeaway is that it’s that incremental benefit of boring but constant investigation, that supports the engine of success.