Category Archives: Enterprise

Applying Lean Techniques in a Big Company: The “Hothouse”

Large companies are always trying to find ways to move at “startup speed” or “digital speed”. The challenge often times is quite simply people: there are just too many of them to keep aligned in order to move swiftly. For any initiative, there are usually multiple stakeholders and affected parties. That means multiple opinions and feedback cycles.

It’s easy to say decision making should be centralized, but the reality is it’s much harder to execute in practice. Even a 1,000-person company has multiple departments, and bigger companies often have sub-departments. If I’m driving a new initiative that will materially impact the customer and/or the business, the fact of the matter is I need to ensure I’m actively coordinating with many of these groups throughout the process, like marketing, operations, call centers, brand, legal, IT/engineering, design, etc. That means not only coordinating with those departments heads (usually VPs), but also their lieutenants (usually Directors) who are responsible for execution within their domains and control key resources, and thus have a material influence over the decisions of the department heads.

In addition, large companies are often crippled by their own processes. Stage-Gate type implementations can be particularly notorious for slowing things down with the plethora of paperwork and approvals they tend to involve.

All of this means tons of emails, socialization meetings, documentation, and needless deck work. All of which is a form of waste, because it prevents true forward progress in terms of driving decision making, developing solutions, and getting them to market.

Initiatives involving UI are particularly susceptible to this sort of corporate bureaucracy for the simple reason that UI is visual and therefore easy to react to, and everyone feels entitled to opine on the user experience. Once, one of my product managers spent a month trying to get feedback and approvals from a handful of senior stakeholders on the UX direction for his initiative. A month! Why did it take so long? For the simple and very real reason that it was difficult to get all these senior leaders in the same room at the same time. What a waste of time!

So how to solve for this? Several years ago, my colleagues and I faced this exact challenge. While an overhaul of the entire SDLC was needed, that takes time in a large organization. What we needed was something that could accelerate decision making, involve both senior stakeholders and the project team, yet be implemented quickly. That’s when we hit upon our true insight: What we needed was to apply lean thinking to the process of gaining consensus on key business decisions.

And that’s how we adopted an agile innovation process that we called a “Hothouse.” A Hothouse combines the Build-Measure-Learn loop from Lean Startup with design thinking principles and agile development into a 2- to 3-day workshop in which senior business leaders work with product development teams through a series of iterative sprints to solve key business problems.

That’s a mouthful. Let’s break it down.

The Hothouse takes place typically over 2 or 3 days. One to three small Sprint teams are assembled to work on specific business problems throughout those 2-3 days in a series of Creative Sprints that are typically about 3 hours each. (4 hours max, 2.5 hours minimum.) Between each Creative Sprint is a Design Review in which the teams present the deliverables from their last sprint to senior leaders, who provide constructive, actionable feedback to the teams. The teams take this feedback into the next Creative Sprint.

This iterative workflow of Creative Sprints and Design Reviews follows the Build-Measure-Learn meta pattern from Lean Startup:

Hothouse Build-Measure-Learn

During the Creative Sprints, teams pursue the work using design thinking and agile principles, like reframing the business challenge, collaborative working between business and developers, ideation, user-centric thinking, using synthesis for problem solving, rapid prototyping, iterative and continuous delivery, face-to-face conversation as the primary means of communication, and team retrospections at the start of each sprint.

The Hothouse is used to accelerate solution development for a small handful of key business problems. So job #1 is to determine the specific business problems you want to solve in the Hothouse. The fewer, the better, as a narrow scope allows for more focused, efficient and faster solution development. For each business problem, teams bring in supporting material, such as existing customer research, current state user experience, business requirements, prototypes, architectural maps, etc. as inputs into the Hothouse. The expected outputs from the Hothouse depend on the business problems being addressed and the specific goals of the Hothouse, but can take the form of a refined and approved prototype, prioritized business requirements or stories, system impacts assessment, high-level delivery estimates, and even a marketing communication plan.

Hothouse process

At the end of the Hothouse, the accepted outputs becomes the foundation for further development post-Hothouse.

I’ve been part of numerous Hothouses, both as a participant and facilitator, and I’ve seen Hothouses applied to solve business challenges of varying scope and scale. For example:

  • Re-design of a web page or landing page.
  • Design of a user flow through an application.
  • Development of specific online capabilities, such as online registration and customer onboarding.
  • A complex re-platforming project involving migration from an old system to a new one with considerations for customer and business impacts.
  • An acquisition between F1000 companies.

The benefits to a large organization are manifold:

  • Accelerates decision making. What typically takes weeks or months is completed in days.
  • Senior leadership involvement means immediate feedback and direction for the project team.
  • Ensures alignment across all stakeholders and teams. The folks most directly impacted — senior leadership and the project delivery team — are fully represented. By the end of the Hothouse, everyone is on the same page on everything: the business problems and goals, proposed solutions, high-level system impacts, potential delivery trade-offs, priorities, and next steps.
  • This alignment serves as a much-needed baseline for the project post-Hothouse.
  • Bottom-line is faster product definition and solution development, which speeds delivery time-to-market.

A Hothouse can help you generate innovative solutions to your organization’s current problems, faster and cheaper. More details here. If you’re interested in learning more about agile innovation processes like the Hothouse, or how to implement one at your organization, reach out to me via Twitter or LinkedIn.

Disclaimer: I didn’t come up with the term Hothouse. I don’t know who did. But it’s a name we used internally, and it stuck. I think the original methodology comes from the UK, but I’m not sure. If you happen to know if the name is trademarked, please let me know and I’ll be happy to add the credit to this post.

Before Product/Market Fit comes Opportunity/Company Fit

In his book, Running Lean, Ash Maurya presents a workflow for taking a product from idea to launch to Product/Market fit.

Ash Maurya workflow
In the Problem/Solution Fit stage, you are trying to answer the question, “Do you have a problem worth solving?” Ash breaks this down further into three questions:

  • Is the problem something customers want solved? (must-have)
  • Can it be solved? (feasibility)
  • Will they pay for it? If not, who will? (viability)

Problem/Solution Fit is pursued by capturing your business model hypothesis and then doing Customer Discovery via problem interviews and solutions interviews with customers. Once you’ve validated from customers that you have a viable problem worth solving, you move into Product/Launch Fit.

In the Product/Launch Fit stage, you are trying to answer the question, “Are you ready to learn from customers?” Key activities pursued here are reducing down your MVP, getting to Release 1.0, defining your key metrics, and continuous deployment. The purpose here is to lay the critical groundwork to maximize speed and learning for future iterations, and to establish “just enough” traction among customers to support learning.

Finally, in pursuing Product/Market Fit you are trying to answer the ultimate question: “Have you built something customers want?” This is where the rubber hits the road, and you’re validating your complete product. Identifying the “right” metric or set of metrics, prioritizing your feature backlog, and ensuring retention and getting paid are critical to the success of achieving product/market fit.

This Lean Startup workflow is one that could be used by a product manager pursuing a new product idea or looking to introduce an existing product into a new market. After all, the product manager in such a situation must be able to answer the same set of questions about who is the customer, what customer problem is the product trying to solve, and will enough customers care enough to pay for the solution. The product manager typically starts with some sort of informed hypotheses to answer these questions, which form the basis of the product vision. And the product manager must stay in close touch with customers to validate whether the product is truly something they want.

I feel there is one critical step missing in this workflow, though. It has to do with the unique situation product managers find themselves in versus entrepreneurs. Whereas an entrepreneur is trying to discover a business model that works, a product manager is typically an employee in an existing company already executing a repeatable and scalable business model. As such, the new product idea being pursued by the product manager could represent a change to the company’s existing business model. As such, because of the potential impact on the company’s existing business model, a critical consideration for the product manager pursuing a new product is whether the new product is aligned with the company’s corporate strategy.

In his book, Product Leadership: Creating and Launching Superior New Products, author Robert G. Cooper talks about the need for new product development efforts to be closely linked to the overall business strategy. In Beyond the Core, Chris Zook makes the case that the further a new product or business idea is from the core business — what he calls an “adjacency move” — the riskier it is and more prone to failure. What this means is that the more closely aligned the new product idea is to the company’s existing business strategy, the more favorably it will be looked upon by the company’s executives. This does not mean something completely outside of a company’s existing core will never be approved. But it does mean the bar to get that buy-in is much higher.

So in order for the new product idea to garner the necessary stakeholder support, its business case must be able to articulate the business opportunity it presents to the company, how it fits (or departs) from the company’s current business model and strategy, and the risks associated with pursuing it.

As such, Ash’s workflow can be modified as follows:

opportunity-company-fit

I call this stage Opportunity/Company Fit.

Critical questions for the product manager to figure out are:

  • Does the idea align with the company’s strategic goals?
  • Who do I have to convince to get buy-in?
  • Can I get a sponsor? Who?

Just like with using customer validation to achieve Problem/Solution Fit, I’m sure it’s possible to use lean principles to achieve Opportunity/Company Fit.