Government — not businesses or nonprofits — is going to be the most important area of entrepreneurship and innovation over the next 25 years. – Peter Drucker
Drucker believed that most citizens have lost trust with their governments and since its systematic what is required is not change in leadership or better leadership only. What is required is changing the way we do government.
One important aspect of that is the approach to new things. This is where entrepreneurship and innovation is key for government. If we are serious about social innovation, we need to be serious about this. This is the big case for why a new appraoch.
The lean start up model pioneered by Steve Blank and Eric Ries is fundamental to the way entrepreneurship is now around the world. In my work in social innovation, lean start up principles have played a big role in changing the way work is done and in essence creating better outcomes. This is the big case for why using this methodology to make this happen.
So, what is lean start up?
“a human institution designed to create a new product or service under conditions of extreme uncertainty”
– Eric Ries’s definition of a start up.
This is possibly one of the best and expansive definitions of a start-up that moves the idea away from a new business to anything that is new – project, organisation, service in any context.
Principles: The Lean Startup provides a scientific approach to creating and managing startups and get a desired product to customers’ hands faster. The Lean Startup method teaches you how to drive a startup-how to steer, when to turn, and when to persevere-and grow a business with maximum acceleration. It is a principled approach to new product development.
So, what is the scientific approach? This is Richard Feynman explaining in one minute.
The transcript from the video:
“In general, we look for a new law by the following process. First, we guess it (audience laughter), no, don’t laugh, that’s really true.Then we compute the consequences of the guess, to see what, if this is right, if this law we guess is right, to see what it would imply and then we compare the computation results to nature, or we say compare to experiment or experience, compare it directly with observations to see if it works.
If it disagrees with experiment, it’s wrong. In that simple statement is the key to science. It doesn’t make any difference how beautiful your guess is, it doesn’t matter how smart you are who made the guess, or what his name is… If it disagrees with experiment, it’s wrong. That’s all there is to it.”
If it disagrees with the experiment, its wrong. That is the key to lean start up too. You Build something, measure and then learn from it. This approach moves it away from politics or people and focusses on process.
What the government requires is this way of doing things and starting things.
This idea is being implemented in the US Federal Government and the key champion is Tood Park, the previous CTO for the US Federal Government. This is what he says.
the whole idea behind lean startup being that you want to engage customers early and rapidly prototype solutions in collaboration with them in order to achieve maximum success.
We have successfully applied lean startup principles at HHS across a range of key initiatives. We’ve emphasized the need to rapidly prototype solutions, engage customers in those solutions as soon as possible, and then quickly and repeatedly iterate those solutions based on working with customers, until we arrive at both an optimal understanding of what customers really want and a solution that delivers what they want.
It’s a technique that a lot of private sector entrepreneurs have used to great effect, and that we’re now using to great effect in the public sector.
Why is this thinking important? Like Ries says, the question is not “whether this product should be built?; its “Should this product be built? and does it have a sustainable business model?”. In the context of government, both are important and the third one I would add is does it create change?
The lean start-up model is the best risk-management methodology you could adopt; the cost of failing is exceedingly tiny. – Todd Park
After implementing this model in the US government, Todd has some really good insights into what works in the space and what does not. What does it take to create innovation inside the government using this approach.
The first is his idea that this model is actually the best risk management process due to the low cost of failure and more importantly learning from it.
McKinsey: Many private-sector entrepreneurs would say that to make this iterative approach successful, you have to be comfortable with failure?
Todd Park: Absolutely. And I can say this from experience: if something that takes 18 months and costs a ton of money results in failure, that’s catastrophic. But if four days of effort by a three-person team doesn’t pan out, that’s completely acceptable, right? The lean start-up model is the best risk-management methodology you could adopt; the cost of failing is exceedingly tiny.I actually think what’s even more dangerous than catastrophic failure is mediocrity. At least you can recognize catastrophic failure, whereas a lot of waterfall processes don’t do us the favor of failing—they just produce something mediocre and deeply entrenched. It’s ironic that we use the waterfall approach precisely because we think it’ll help us manage risk, when it’s probably the riskiest approach to making change happen: I’m going to wait 18 months to engage with my customer? That’s crazy!