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Author: Rhonda Honke

The power of rapid cycles of learning

Posted by on March 15, 2016 8:19 am
PDSA Cycle

Recently, I had the opportunity to be one of four judges at the semi-final stage of a business case competition that hosted MBA and Ph.D students from some of the most prestigious universities across Canada and the US. As part of the process, students were asked to submit a written business plan to judges ahead of a thirty-minute presentation and question period.

I had the good fortune of being assigned to the medical products subgroup and judging panel which included three incredibly talented professionals with backgrounds in finance, intellectual property law, and medical research.

Each business plan featured a meaningfully unique product that could help make a difference in our health and our world. Plans included detailed financials, and all four teams had taken steps to protect their intellectual property.

That being said, there were two areas where I saw challenges with their plans. Interestingly, they are the same challenges that many organizations have when they consider new innovations:

1. A mistaken belief that research always needs big dollar and time investments.

All of the business presentations we saw included a request for a capital raise, in part to fund additional research and clinical trials. What I learned from talking to my judge colleagues (with backgrounds in capital funding and medical research), was that smaller, faster tests could be performed prior to requiring large investments for major clinical trials. These smaller, faster, cheaper tests could help further prove out concepts before approaching potential investors, while still progressing ideas closer towards FDA approval.

2. Financials built on assumptions rather than on learning.

As a consequence of limited testing, the financials in the business plans were built on several assumptions. As judges we found ourselves questioning revenue projections, expenses and how teams arrived at their company valuations. While we couldn’t expect perfect financials, the use of math modelling to create more realistic financial projections would have strengthened each business case.

The best way to address both issues? Use the power of rapid cycles of learning to get smarter.

Rapid cycles of learning are designed to identifyPDSA Cycle

  • WHAT we need to learn about;
  • Create a PLAN to learn quickly;
  • DO what we need to in order to learn;
  • STUDY the results from our test(s), and
  • ACT appropriately based on the learning.

At inVision, we focus on one-week learning cycles as part of the Innovation Engineering system. If we are going to fail, we want to fail fast and fail cheap, instead of investing time and money in large scale studies without solid evidence that our concept works.

So, what could innovative organizations and these business case students do to strengthen their potential for successful launch?

1. Identify the death threats for the concept and prioritize them.

What are the top threats to your idea? Identify those factors that could derail your idea and prioritize them. For example, all of the groups saw that FDA approval was critical, and they put that at the top of their priority list. Lower on the priority list was comfort for the patient. I argued that both were equally important. And while they certainly couldn’t deal with all of the FDA research in one week, they could test the comfort factor of their prototypes to ensure patients could tolerate them. The key here? Do what you can to test your idea!

2. Identify fail fast, fail cheap opportunities to learn quickly.

Look for the simplest and most cost effective test to push concepts to the limit. As you continue to ‘pass the tests’, build on the test complexity. For example, in the instance of patient comfort, the students could set up prototypes for friends and family to ‘try’ and then offer their feedback. This wouldn’t replace required testing for FDA approval, but it would answer some critical questions for potential investors and remove a risk. By the time you need significant investment for legislated approvals, you should have enough proof of concept to reduce anxiety for potential investors.

3. Learn as you go: Adjust your product concept and math models based on your learning.

Every learning cycle allows you to learn something you can apply to your concept. After every cycle, re-evaluate! The cycles should help you get smarter every time, refining your concept as you go. If not, you may not be focusing on the most important death threats. The fewer assumptions you make in your plan because you have proved out concepts, the stronger your plan and the more likely that you will execute on time and within budget. Strong financials also help secure investors because it provides confidence in the management/leadership team as well as the concept.

I’m certainly not a medical professional, but I learned a lot about medical devices over the last week. This experience reinforced to me that no matter the industry and no matter the concept, it is valuable to use rapid cycles of learning to strengthen an innovation. Break down imaginary barriers and do what you can to prove out your concept, and then move to the next stage of funding and longer term testing to continue your journey.

 

 

 

Recently, I had the opportunity to be one of four judges at the semi-final stage of a business case competition that hosted MBA and Ph.D students from some of the most prestigious universities across Canada and the US. As part of the process, students were asked to submit a written business plan to judges ahead of a thirty-minute presentation and question period.

Each business plan featured a meaningfully unique product that could help make a difference in our health and our world. Plans included detailed financials, and all four teams had taken steps to protect their intellectual property.

That being said, there were two areas where I saw challenges with their plans. Interestingly, they are the same challenges that many organizations have when they consider new innovations…

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Execution is about LIVING the plan, not communicating it

Posted by on February 8, 2016 11:49 am

Too often, senior leaders start the year with a big town hall meeting to ‘present’ the organization’s strategic plan, if they share it at all.  They give a state of the union address and summarize the high level strategies and objectives. When the meeting is finished, executives feel good that they have shared the plan and everyone is now accountable for executing and attaining success. It sounds great, but it isn’t reality.

The truth is that the vast majority of employees leave those meetings more confused than when they arrived. The strategies are at such a high level that employees don’t know what they do to contribute, so many, while appreciative of the break from their day jobs, don’t leave the meeting engaged in driving the plan.

But what if we could change that? What if we could take those high level strategies and objectives and help people see how their roles contribute every day?  What if we could, in our regular interactions with employees, reinforce how they make a difference? That, my friends, is how we drive execution.

As an executive, I used to love the start of a new year. My favourite week to work was the one between Christmas and New Year’s as it gave me a lot of time to reflect and get ready for what was ahead. I would invest two days on setting the course for my team and determining how to drive execution of our strategic plan and key objectives. I know, it seems like a lot of time, but I have learned that investing the time up front makes life easier in the long run.

So…what did I do for those two days? It’s simple. I put myself in the shoes of my direct reports and figured out how their work contributed to the success of the plan, particularly those whose roles were further removed from the high level objectives being targeted.

An example: let’s say a company wanted to strategically improve its ability to retain and build existing customer relationships. They want to measure progress by showing a 10% improvement in their annual customer satisfaction scores year over year.

Of course we can see how those two elements link.  The question is, even if we communicate this to our teams, do they know what to do to get the 10% improvement? The answer is, not likely; particularly if they work in a function that is removed from customer service.

What if I’m the HR Leader? Without more conversation, it is easy for folks in indirect roles like this to disengage; customer service is someone else’s issue in the organization, not mine. If we want to achieve aggressive strategic plans, we need everyone in our organization working towards key objectives.

For some it is easy to see how they can impact the metric (ex. front line customer service staff), but for others, they need the link established for them. Let’s look at the HR Leader. By reducing hire times, and hiring for the right skills, the HR Leader can contribute to the customer service goal. Ongoing conversations help develop the direct link between what we are asking the leader to accomplish and the strategic plans for the organization.

Why do these conversations drive execution?

  • People want to work on things that matter.  If employees understand how the work they do contributes to the overall objective, they are more likely to engage and commit to reaching that result.
  • Objectives are measurable. Because we can measure progress, we can monitor progress. We can recognize strong performance and jump in quickly if things go off track.
  • Scope creep is minimized. Through the year, it is inevitable that employees will be asked to take on new projects.  Ongoing dialogue ensures a balance between strategic objectives and “day job” responsibilities.
  • Performance management becomes easier. Setting clear expectations at the beginning of the year means that we get commitment on the work to be done and we can better monitor progress throughout the year. We provide appropriate feedback early, leading to better communication and fewer surprises when it comes to coaching and year end reviews.

If you really want to get results, invest a bit of time in having regular conversations with your staff that makes the strategic plan real to them. I guarantee you the investment will pay off in spades and you will be that much closer to achieving your strategic plan.

 

Too often, senior leaders start the year with a big town hall meeting to ‘present’ the organization’s strategic plan, if they share it at all.  They give a state of the union address and summarize the high level strategies and objectives. When the meeting is finished, executives feel good that they have shared the plan and everyone is now accountable for executing and attaining success. It sounds great, but it isn’t reality.

The truth is that the vast majority of employees leave those meetings more confused than when they arrived. The strategies are at such a high level that employees don’t know what they do to contribute, so many, while appreciative of the break from their day jobs, don’t leave the meeting engaged in driving the plan.

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What has a greater impact on organizational growth? Strategy or leadership?

Posted by on November 30, 2015 10:39 am
Strategic-Leadership

“Strategy will not succeed in a void, and leadership often makes the difference between merely reaching for great opportunities and actually realizing their potential.”  – McKinsey Report, Tsun-yan Hsieh and Sara Yik.

I had an interesting conversation a few weeks ago with a senior leader in a successful manufacturing organization. He proudly spoke about the company’s products and employees and beamed as he walked me through the facility, pointing out visual systems, key performance indicators, and lean improvements they have made over the years. He talked of mentoring his next level leaders to improve their confidence and decision making abilities; so much so that his job was a bit ‘boring’ now.

Contrast this with another senior leader in a different organization, different industry, but equally successful. While he also spoke proudly about his organization, customers and employees, he had difficulty identifying what contributed to the organization’s success to date. While the Board and select senior leaders participated in a strategic planning exercise each year, the plan was not shared openly with others in the organization.Strategic-Leadership

Of the two organizations, which is poised for more growth? I would bet my next pay cheque on the first organization over the second — and I’ll tell you why.

In the absence of good leadership, a strategy document becomes an oversized paper weight. Poor leaders don’t understand the value of a strategy. They create one-day strategy workshops so they can say they’ve gone through the planning process. The result is a plan that sits in a binder on the shelf until the next year. The plan quality is generally poor and there is no focus on execution.

In the absence of good strategy, a good leader can build solid relationships with staff. Good leaders recognize that their ability to achieve results rests with the team they are entrusted to lead. They communicate, and more importantly, listen. They set operational goals, measure progress, and hold people accountable to create a foundation of execution. They ask for strategic direction so they can ensure they are working on the right things.

When a good leader is provided a solid strategy, he or she leverages the relationships and the foundation of execution they’ve already established within their team to deliver results. Give that same strategy to a poor leader and he or she will not understand why it exists, how to make it real, or even where to start.

So, how do we build leaders and leadership teams that are ready to get on board with strategy? We select them carefully and then we invest in them – we give them the tools, support, education, and learning opportunities to grow. At inVision we assess senior leadership teams using our Activation Edge products, provide team exercises and, at times, one-on-one coaching, to help leaders develop their potential.

So what has a greater impact on organizational growth? While developing a solid strategic plan is necessary and important, a plan without leadership nets you nothing. I bet on leadership every time.

 

I had an interesting conversation a few weeks ago with a senior leader in a successful manufacturing organization. He proudly spoke about the company’s products and employees and beamed as he walked me through the facility, pointing out visual systems, key performance indicators, and lean improvements they have made over the years. He talked of mentoring his next level leaders to improve their confidence and decision making abilities; so much so that his job was a bit ‘boring’ now.

Contrast this with another senior leader in a different organization, different industry, but equally successful. While he also spoke proudly about his organization, customers and employees, he had difficulty identifying what contributed to the organization’s success to date. While the Board and select senior leaders participated in a strategic planning exercise each year, the plan was not shared openly with others in the organization.

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