Let’s face it, while most of Lean related thinking and tools are relatively easy to understand, there are always challenges when it comes to actual application and change. That is why the single most effective way to learn Lean is on the workplace, in the very environment where relevant work is done.
Having short lectures or workshops before moving to the workplace can greatly enhance the learning. As lectures have a tendency to be boring, or perceived as boring, they also tend to be a one-sided form of education. The presenter explains different concepts and the audience is either writing notes or battling sleep.
Using games and simulations to teach Lean principles is a recognized approach in the Lean community. There are numerous Lean games out there, from free to paid, from physical to virtual. Martin Boersema provides a list of Lean games and simulations with around 50 of them. Academic term for meshing education with gameplay is gamification, which Huotari and Hamari (2012) define as a process of enhancing a service with affordances for gameful experiences in order to support user’s overall value creation.
Before I move to how Playing Lean gamified Lean Startup, I’ll shortly explain the background of Lean Startup and its five core principles.
From Lean Production to Lean Startup
Triumph of the Lean Production System (1988) by John Krafcik is the first paper on what is today known as Lean Thinking. It came out of the MIT International Motor Vehicle Program, as a part of the research for the book The Machine That Changed the World (1990). Numerous other books followed, but as Michael Ballé comments, one discussion keeps popping up – what exactly is Lean? Bob Emiliani wrote an interesting article chronicling how definitions changed over time.
How did all this lead to Lean Startup?
In Hypothesis-Driven Entrepreneurship (2012), Eric defines it as a new venture that tests business model hypotheses using Minimum Viable Product tests. “Lean” does not necessarily imply “low cost”; rather, it refers to an imperative to “avoid waste.”
Lean Startup is a methodology for developing businesses and products. The methodology aims to shorten product development cycles by adopting a combination of business-hypothesis-driven experimentation, iterative product releases, and validated learning. It seeks to eliminate wasteful practices and increase value-producing practices during the product development phase by focusing on creating products and services customers truly want. That’s why corporations like GE, Intuit, and Samsung, are adopting the methodology to further optimise their businesses. Steve Blank, the father of Customer Development, wrote a great article explaining why the Lean Startup changes everything.
Today, the Lean Startup body of knowledge consists of:
- Lean Thinking (Lean Enterprise Institute)
- Business Model Design (Alexander Osterwalder)
- Customer Development (Steve Blank)
- Agile Software Development (Agile Manifesto)
Five Principles of Lean Startup
In The Lean Startup (2011), Eric defined five principles of the Lean Startup. They encapsulate the overarching mindset and provide an actionable framework. Here are some of my thoughts on them.
1 Entrepreneurs are everywhere
You don’t have to work in a garage to be in a startup. ∞
I explain this principle on three levels: (1) general, (2) personal and (3) enterprise.
(1) Literally, entrepreneurs are everywhere. In other words, Lean Startup approach can work in a company of any size, even a very large enterprise, in any sector or industry.
(2) Entrepreneurs-to-be can come from different backgrounds. To them the first principle is mostly a form of encouragement – I don’t need an expensive and long education to succeed, I don’t need a lot of resources, etc. They can achieve results in different environments, as long as they are applying a scientific method to their entrepreneurial undertaking.
(3) Enterprises consist of individuals. They form teams and departments in various organisational schemes. Accountability and responsibility become difficult as more and more bureaucratic mechanisms are put in place. In Lean Product and Process Development (2014), Ward and Sobek II make a case that the responsibility of making profit ultimately falls upon the CEO. This principle signals to enterprises that they should look within themselves, to identify people who could share this responsibility with the CEO. Ward and Sobek II (2014) call these people entrepreneurial system designers. Now, that is a proper title to have!
2 Entrepreneurship is management
A startup is an institution, not just a product, so it requires management, a new kind of management specifically geared to its context. ∞
Steve Blank was first to recognise that startups are not just smaller copies of traditional enterprises. There is another equally important realisation related to this principle.
Recognizing that one can manage for entrepreneurship is recognizing one can also get better at it.
Today it is hard to imagine an enterprise without some sort of Quality Management department. That makes it easy to forget that managing for quality developed fairly recently. Quality inspection was present throughout the history, followed by quality control methods relying on statistics. In both cases it was reactive, defects were caught at the end of the process, or in-between the processes. The later, the costlier. Finding inspiration in accounting practices, it was Juran that set off a new era of managing for quality with his Quality Control Handbook published in 1951. Alongside Deming, he also helped the Japanese rebuild their economy, training numerous industrial personnel (Phillips-Donaldson, 2004).
Once we realised we can manage for quality, we developed different tools, methods and approaches. That in turn made it possible to make curricula, to teach quality management, and consequently, get better at it.
Lean Startup is doing the same for entrepreneurship.
3 Validated learning
Startups exist not to make stuff, make money, or serve customers. They exist to learn how to build a sustainable business. This learning can be validated scientifically, by running experiments that allow us to test each element of our vision. ∞
Lean Startup provides a framework for applying a scientific approach to test business hypotheses. During the business modelling phase everything we have are assumptions that need to be tested. These assumptions must be turned into falsifiable hypotheses and be tested with relevant customer segments.
Out with the guesses, opinions and gut-feelings, in with the facts and experimental data. Focus on learning how to build a sustainable business.
4 Innovation Accounting
To improve entrepreneurial outcomes, and to hold entrepreneurs accountable, we need to focus on the boring stuff: how to measure progress, how to setup milestones, how to prioritize work. This requires a new kind of accounting, specific to startups. ∞
Tony works in a marketing department of a big enterprise. The decision has been made to develop new product. Approved budget for market research is 1.5 million euros. Tony and his team run experiments, talk to customers, testing a number of different hypotheses. During that time numerous reports with beautiful infographics, pie charts, calculations and projections are made. They are stored in drawers and on network drives.
Most of those reports never reached the product development department, and those that did were ignored due to lack of perceived useful information. Engineers found them difficult to use, and haven’t found a lot of actionable data. Tony and his team wasted the budget, mostly due to poor innovation accounting.
There are different ways of learning. An individual can learn by listening, reading, watching, repeating what he heard, read or saw. His learning can be enhanced by someone who has more experience – a mentor, supervisor, or senior worker. A team or a group of people can learn by solving difficult problems together, exchanging knowledge, ideas and experience between individuals. Enterprises learn by recording and documenting: standard operating procedures, manuals, best practices, one-point-lessons, trade-off curves, A3 reports, etc.
The simplest definition of innovation accounting is recording what you learned. Keep it informative, concise and relevant. A lot of information can be packed in small format. Look to A3 reports and trade-off curves for inspiration.
The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. All successful startup processes should be geared to accelerate that feedback loop. ∞
Those already familiar with the Lean Thinking immediately recognise the similarities with the Plan-Do-Check-Act loop. Build-Measure-Learn loop provides the framework for verifying a problem or idea and turning it into a product or service. Ash Maurya describes it as the closest equivalent to a scientific experiment in innovation is a cycle around the Build-Measure-Learn validated learning loop.
Cycle times vary depending on the hypothesis being tested. It can be anywhere from few a hours to a few days. It should never be longer than two weeks, not even for enterprises. Almost all projects, problems, and assumptions can be broken down to smaller elements which can be tested in a shorter cycle. Learning is important, but that doesn’t mean you have to sacrifice speed.
At the beginning I wrote how games and simulations can enhance the learning. What I also found is that they are a great way to kick-start one’s journey to understanding and accepting new principles. According to Ramos, Lopes, and Avila (2013) some benefits of using games for teaching are:
- introducing difficult concepts;
- developing problem-solving and decision-making skills;
- promoting an active participation of the student;
- increased interest among students;
- developing each student’s talents, which welcomes students at different learning levels; and
- helping the teacher identify each student’s difficulties.
In Teaching Lean Manufacturing With Simulations and Games (2010) the authors explore different Lean games and simulations, and how they help develop various Lean skills, behaviours and traits. More importantly, they discuss how important is the role of the facilitator. In other words, these games and simulations are most efficient when coupled with a facilitator who has the knowledge of Lean theory and practice, as well as good communications and storytelling skills.
Playing Lean is an award winning board game (Nordic Crowdfunding Alliance “Best Norwegian Crowdfunding Campaign Award” in the Educational Products and Services category 2016, IBLGC 2016) that teaches Lean Startup.
Playing Lean is a flight simulator for innovation and Lean Startup. It’s an enjoyable board game where players are forced to make difficult choices without risking their life savings or the future of their workplaces. It simulates the experience of launching a successful product, starting with business modelling phase and ending with scaling phase. During the game, teams will do experiments, add features to the product, build the company and win new customers. The Lean Startup approach is at the heart of the game, and every experiment will introduce new concepts and vocabulary that the game facilitator will go through.
What I like about it is that the game itself was developed using Lean Startup principles. Simen Fure Jørgensen had been using the getKanban board game to teach people kanban in knowledge environment with great success. When he started teaching Lean Startup, first thing he did was look for a game that would help him. Finding none he embarked on a quest to make one. After verifying the problem, he and Tore Rasmussen did a lot of experiments, taking the game through numerous iterations, before creating the product customers truly want.
Since the launch, Playing Lean is being used all over the Europe, USA, Central America and Australia. It is used in different environments, from startup hubs and accelerators, to big enterprises and universities. If you’d like to learn more about the game and how it teaches Lean Startup I recommend the following reading:
- Playing Lean – The Game by Simen Fure Jørgensen
- How Playing Lean conveys Lean Startup Methodology by Tore Rasmussen
As a Playing Lean Facilitator I use the game to teach others Lean Startup. So far I’ve used the game in more than 20 workshops, playing with over 250 people. I’m happy with the results, as the game really helps with conveying fundamental principles. Furthermore, it also has use as a team-building tool.
Game mechanics are simple, fun and fast to grasp (one turn, approximately 10 minutes). The game speed, as well as the volume of learning, can be adjusted as you see fit. Re-playability is not an issue since there are other card decks available. Social Media is the default deck that comes with the game, and Ride Sharing deck just came out.
The quality of the cards and visuals is at a high level, as one would expect from Holger Nils Pohl. For those who don’t know, Holger is the illustrator for Alexander Osterwalder (Business Model Generation, Value Proposition Design), who brings business concepts to life with amazing ease.
One should not expect to become a Lean Startup expert just because they bought the game. It is a tool for people who already know Lean Startup well, and would like to teach it to others in a fun and fast way. Of course, it is fun enough to just get it and play for the sake of smashing your buddy’s dreams of market domination. Might not be a buddy for too long, but hey…
Lean Thinking & Practice 2017 Australasian Summit
I’ll be giving a Lean Startup workshop at this year’s Lean Thinking & Practice 2017 Australasian Summit organised by the Lean Enterprise Australia. The summit will take place in Melbourne from 9 to 12 of May, and my workshop is on Friday 12th.
There’ll also be Playing Lean Facilitator Trainings in Australia around that time.
Badurdeen, F., Marksberry, P., Hall, A. and Gregory, B., 2010. Teaching Lean Manufacturing With Simulations and Games: A Survey and Future Directions. Simulation & Gaming, 41(4), pp.465-486.
Eisenmann, T.R., Ries, E. and Dillard, S., 2011. “Hypothesis-Driven Entrepreneurship: The Lean Startup.” Harvard Business School Background Note 812-095.
Galrao Ramos, A., Pereira Lopes, M. and Silva Avila, P., 2013. Development of a platform for lean manufacturing simulation games. Tecnologias del Aprendizaje, IEEE Revista Iberoamericana de, 8(4), pp.184-190.
Huotari, K., & Hamari, J. (2012). “Defining Gamification – A Service Marketing Perspective“. Proceedings of the 16th International Academic MindTrek Conference 2012, Tampere, Finland, October 3–5.
Krafcik, J.F., 1988. Triumph of the lean production system. MIT Sloan Management Review, 30(1), p.41.
Phillips-Donaldson, D., 2004. 100 years of Juran. Quality progress, 37(5), p.25.
Ries, E., 2011. The Lean Startup: How today’s entrepreneurs use continuous innovation to create radically successful businesses. Crown Business.
Ward, A.C. and Sobek II, D.K., 2014. Lean Product and Process Development. Lean Enterprise Institute.
Womack, J.P., Jones, D.T. and Roos, D., 1990. Machine that changed the world. Simon and Schuster.