Nov 24 2019 > Originally posted on Medium
Lean Innovation Governance
The old plan-invest-execute process
Corporate investment decisions are often only made once per year by
going through a list of business case documents. Once a decision has
been made to support a business case, the team quickly shifts focus to
blindly execute the plan. To mitigate the investment risk, the team is
asked for very regular (weekly/bi-weekly) reports, (monthly) steering
committee status updates meetings, combined with numerous progress
plan related funding decision gates.
Figure 1: Plan-Invest-Execute
The likes of Steve Blank (The Four Steps to the Epiphany), Alex Osterwalder (Business Model Generation
> Canvas), Eric Ries (The Lean Startup), Ash Maurya (Running Lean) … and many, many others … have since successfully highlighted that
this process is littered with problems, with one of the biggest flaws
being that it all starts with a “business case” based mainly on
assumptions rather than reality (and the reality changes fast too).
The new do/learn-decide culture
Moving from a yearly plan-invest-execute world, to many
do/learn-decide loops, requires more than just replacing the business
case with some one-page canvas. The overarching governance process on
why and how investment decisions are made must also evolve.
From a conceptual point of view this process has the following
Everything we do must originate from a clear and transparent
and for each objective we may have a number of Do/Learn-Decide loops
where we Do/Learn things to get qualitative and/or quantitative
data, allowing us to Decide frequently what to prioritise next
- … or Retire a product
Figure 2: Do/Learn-Decide
Any mature organisation should have two distinct, clear and
transparent strategic objectives (a bit like OKRs) that are reviewed
on a regular (quarterly?) basis.
The authors of “Dual Transformation” did a good job in describing both sides, the first one with a clear
focus on today’s business and the second with a firm eye on the
Today: On one side describing the objectives for today’s products.
e.g. objectives to scale, attract more customers, objectives to
improve a product and grow (or defend) our customer base, objectives
to become more efficient and maximise our profitability …
Tackling objectives for today’s products is often a matter of
prioritising a long competing list of ideas and todos from a backlog
Future: On the other side, define future strategic objectives to go
after new opportunity areas as well as objectives to explore ways to
disrupt our own products (before someone else does).
Exploring, experimenting and validating assumptions like a startup for
future value propositions requires a different skill- and mindset.
Reid Hoffman’s recent podcast
used the analogy of acting like a pirate (the ethical one) who is
willing to break some rules. When successful the startup will
eventually need to transition from a band of roguish pirates into a
disciplined navy, becoming the new today’s business.
Figure 3: Do/Learn-Decide — Objectives
Do/Learn — Decide
There is no way to predict how fast a concept can grow into a launched
product, but products still go through typical maturity levels. We
believe there are 4 maturity levels, each with its own specific focus
(and typical activities).
Figure 4: Innovation Spectrum — Maturity Level Focus
The maturity levels can be mapped on the popular
to show the typical activities, but even mature products should always
maintain one eye on the problem space to remain customer-centric and
allow us to proactively tackle any changes (e.g. new technology,
change in regulation, customs/habits …)
The first 3 are the maturity levels (i.e. ML-0, ML-1 and ML-2) towards
(hopefully) a new product. This is where the pirates have identified
an opportunity area, from the treasure trove of our future objectives,
to make the world a better place. These pirates can either come from
inside the organisation (internal innovation) or from outside the
company via open innovation-type incubator/accelerator programs or
The fourth maturity level (i.e. ML-3) is where the product is opened
up to anyone so the future objective becomes an objective of a product
of today, where the pirates transition into a well organised navy.
Some pirates will remain on board to lead the growth hacking
experiments during the scaling phase whilst others find a new
challenge to sink their teeth in.
Figure 5: Do/Learn-Decide — Do/Learn
Each of the 4 maturity levels are steered by their own decision board,
each with its own purpose, setup & metrics. Each team will
continuously update and refine their Business Blueprint (more on this
in later articles too) with qualitative and/or quantitative data from
To avoid waste and make sure we focus the limited resources on the key
strategic objectives, requests for support from any of the decision
boards can never be longer than 3 months (A bit like the definition of
“metered funding” from Eric Ries’s second book The Startup Way).
Figure 6: Do/Learn-Decide — Decide
Finally, each quarter based on the qualitative & quantitative
learnings, alignment to objectives (today and future) and growth and
revenue metrics, a possible decision outcome is to retire a product to
release resources and focus on something else.
Some of the icons used in the graphics are from