Eric Ries, author of the Lean Startup spoke at London’s How to Academy on November 15. His latest book “The Startup Way” has just been published. In an open discussion, Ries shared in-depth insight into his philosophy of successful 21st century business.
The Lean Startup, a cornerstone of entrepreneurial literature, has been used and evangelised by technology leaders at all levels. Iterative product development, continuous experimentation and adaptive business models are central concepts. It may be hyperbole to say ‘the book birthed a movement’, but it resonated deeply with small to large businesses and government departments across the world.
Its success drew Ries into boardroom conversations with leading global corporations. Their innovation functions stultified by broken management systems, resembled tranquillised elephants. Ideas in the Lean Startup offered cure, but in some cases cautioned Ries:
the boss wants innovation theatre.
Bean bag chairs, fuzzball tables and slogans are inconsequential if management systems are not reformed. Ries said:
when you tell people to be more innovative with your mouth… they hear that with their ears, but then they hear also with their wallet. People listen much better with their wallet than with their ears.
The disincentive effect of punishing failure is thereby self-harming. Innovation becomes theatre, as managers and teams avoid risks.
Expanding on his philosophy of business, Ries said “we have to recognise the breakthroughs of the past”, situating the foundations of Lean Startup in scientific management. Speaking about the principles and work of Frederick Taylor (the father of scientific management) Ries clarified “I don’t fully endorse what is called Taylorism today” but “what he called scientific management, we just call management.”
Ries continued, “now we have the problem of too much of everything, we can’t figure out what to produce and why, we can’t figure out what people actually want.” In part, he attributed this abundance to “the success of these previous ideas.”
In successfully engaging traditional management structures in government and big corporate, Ries argued that reformers needed to connect on common ground. Hubris is extremely counter-productive and failure practically guaranteed if new ideas cannot be interwoven with (and not strangled by) orthodoxy.
In his new book, The Startup Way, Ries builds on the foundations of Lean Startup. He explores key challenges in applying the framework at scale to innovation challenges in corporate and public policy environments. He elucidates his thinking on innovation accounting which he describes as “a way of evaluating progress when all the metrics typically used in an established company (revenue, customers, return on investment, market share) are effectively zero.” He pokes fun at long term startup and innovation growth forecasting. Arguing for more meaningful and scientific lead indicators, Ries noted the difficulty of convincing hard nosed venture capitalists of the need for change.
Steve Nimmons is a freelance technology journalist. He is a Chartered Fellow of the British Computer Society, a Chartered Engineer, Fellow of the Institution of Engineering and Technology, Royal Society of Arts, Linnean Society and Society of Antiquaries of Scotland. He is a member of the Chartered Institute of Journalists and writes about innovation, defence, security and public affairs. You can connect with him on Twitter @stevenimmons