Implementing Lean Start-up Thinking for Impact
1 May 2014 at 10:37 am
Embracing the frameworks that are increasingly considered by start-up businesses can help Not for Profits operate in a capital efficient way – which helps to ensure the sustainability of the organisation’s impact on the community, writes Westpac Social Sector Banking’s National Marketing Manager Lali Wiratunga.
The Lean Start-up
In 2011, Eric Ries helped to change the way start-up businesses build, run and grow their organisations – his book, The Lean Startup, encourages maximising customer value and revenue while minimising wasted effort. The route to achieving this goal: cut down planning processes and test assumptions using the “Build, Measure and Learn” framework.
These lean start-up principles are relevant across many sectors and in organisations – including the Not for Profit sector – that need to operate in a capital-efficient way.
The case for lean start-up thinking in the for-purpose sector
We see that the leaders in the Not for Profit sector see needs not being met in the community and they bring people together to make communities stronger.
Driving change requires an efficient engine. Lean start-up thinking could help Not for Profit organisations optimise their resources and avoid losing the attention of: the communities they wish to support, donors they need for support or employees or volunteers who are intrinsically motivated to help them.
Seven Top Tips to begin lean start-up thinking in your Not for Profit organisation
I first encountered the Lean Start-up methodogy whilst studying an MBA at the AGSM in Sydney. In Not for Profits the customer or community beneficiary is important.
Of vital importance is the social impact that is created. I’m interested in exploring how applying lean start-up approaches allow Not for Profits to maximise the sustainable impact that they have on their community and beneficiaries.
What Not for Profits wishing to embrace ‘lean start-up’ thinking should consider:
1. Is failure an option? Failing fast is always cited as a key element for start-ups. This means that you should be ready to discover quickly whether your approach for solving problem is working or not and being ready to stop or modify if it is not working. So the question for consideration by Not for Profit organisations: are the board, team, and funders ready to accept the “failing fast” paradigm?
2. Do we have the right systems? Having the right information easily accessible and available to both the people in your organisation and the community you support is essential for lean programs. With the information available, you can review assumptions and if necessary make modifications to your programs along the way.
3. Do we have the right cultural fit for a lean approach? Having the right strategy in place to inexpensively test a program is a box you may have ticked. Having the right management systems in place to produce accessible and actionable data is another box you may tick. However as the strategist, Peter Drucker is attributed to have said, “culture eats strategy for breakfast”. The foundation that needs to be in place to succeed with a lean approach is the cultural attitude of the organisation and of course its people. This is a vital delineation, without this foundation, it is possible for leaders or early adopters to understand the mechanics of the lean approach, but impossible for the organisation to actually implement it.
4. Are we truly ready to make an investment in lean? Eric Ries in a 2013 LinkedIn interview said, “It takes tremendous discipline and courage to test this hypothesis: What if we just stopped doing all that stuff we do because we’ve always been doing it that way? What if we didn’t have the fancy report? How does this affect the people?” Another question might be how does implementing a lean approach help the organisation deliver impact in the community. For the Not for Profit organisation adopting a lean approach requires investment: this could be measured in terms of leaders, at all levels, time, emotion and commitment.
5. Can we start small? Selecting a single project with short timeframes, which has high visibility within the organisation, allows the organisation to “dip” its toes into lean without expecting everyone to adopt these approaches immediately.
6. Can we agree on what success looks like and what to retain? The project leader should be prepared to capture and share the learnings from the project. The project leader should work with other leaders in the organisation to determine what works, agree to what does not and select what is best to maintain for future Lean projects in the organisation.
7. Have we got the right leaders on the journey with us? Adopting a lean start-up approach is a team activity. Making sure the right program governance structure is in place is vital to understand why lean was adopted in the first place; help monitor the program(s) and help communicate the learnings and impact with the board and the broader community.
By embracing a Lean Startup mindset, your organisation can build programs in a different way. Not for Profits that have adopted Lean can create increments of value by enacting, provoking, or inspiring change with as little waste as possible.
About Westpac Social Sector Banking: Westpac Social Sector Banking is deeply committed to the For Purpose sector, and can proudly say we have a national team of dedicated specialists and customised banking solutions to service the sector. The sole aim of our bankers located across Australia is to deliver better banking experiences for Social Sector customers. Beyond banking, we have several initiatives in place – directly helping to build capacity in social sector communities. For more information, visit Westpac Social Sector Banking.
About The Davidson Institute: It is Australia's First School of Money, backed by Westpac Banking Corporation. It provides an extensive range of financial education, from free seminars to facilitated sessions on Cash Flow to Superannuation, and accredited courses in finance.
For more information visit www.davidsoninstitute.edu.au for a number of useful articles. Short courses are also available.
Harvard Business Review “Why the Lean Start-up Changes Everything”: http://www.usric.org/uploads/1/8/4/1/18419537/why_the_lean_start_up_changes_everything.pdf
Lean Start-up Methodology: www.theleanstartup.com/principles
Lean Startup + Social Sector = Lean Impact: http://www.leanimpact.org/lean-method-nonprofits-get-lean/
Is Your Nonprofit Really Ready to Use the Lean Startup?: http://www.ssireview.org/blog/entry/is_your_nonprofit_really_ready_to_use_the_lean_startup
Q&A: Eric Ries on Lean Start Up Principles for Nonprofits: http://www.linkedin.com/today/post/article/20131217163739-156187-my-conversation-with-eric-ries-on-the-benefits-of-lean-start-up-principles-for-nonprofits
What would the Lean Startup look like for Nonprofits?: http://www.leanimpact.org/the-lean-nonprofit