Overview of Lean Startup and FastWorks

8. © 82014 Copyright Genpact. All Rights Reserved. GE Performance: Effects of Charismatic Leadership?* *General Electric Performance over a Half Century: Evaluation of Effects of Leadership and Other Strategic Factors by Quantitative Case Analysis Richard H. Franke, Anthony J. Mento, Steve M. Prumo, Timothy W. Edlund International Journal Of Business, 12(1) 2007 ISSN: 1083−4346 1. GE's real profitability in the first decade under Welch did not improve 2. Real profitability increases in the remaining period under Welch were largely due to causes other than his (charismatic) leadership

10. © 102014 Copyright Genpact. All Rights Reserved. “We want to change the competitive landscape by being not just better than our competitors, but by taking quality to a whole new level. Variation is evil. And once you reduce variation, your costs are improved dramatically and your market share gains are enormous” Jack Welch 1995

11. © 112014 Copyright Genpact. All Rights Reserved. Early Impact of Jack Welch’s adaption of Six Sigma 11% 14% 17% 13% Revenue increased Profits increased Earning per share increased Operating margins increased Results achieved over the first two years

14. © 142014 Copyright Genpact. All Rights Reserved. #4 Global 2000 #6 Market Value #7 Most Valuable Brands #21 Sales #24 Most Profitable Companies #44 Assets But: #90!!! Most Innovative Companies GE on Forbes 2013 Global 2000 rankings

17. © 172014 Copyright Genpact. All Rights Reserved. “The Big will not beat the Small anymore. It will be the Innovative & Fast beating the Slow & Mediocre.” “Apple won the war with ideas not with cost reduction.” 2008

18. © 182014 Copyright Genpact. All Rights Reserved. “GE will have to move at market speed and with market intensity. One of the things I've done personally over the last 18 months is spend a lot of time with VCs, entrepreneurs and start-ups. Just trying to figure out how they ran their enterprises. GE has advantages they don't have. But the challenge really is speed. About measuring market speed and making sure we are getting faster whether in product introduction or in customer acquisitions.” 2013

19. © 192014 Copyright Genpact. All Rights Reserved. GE Leader’s Characteristics (LES circa 2002) Speed vs Quality… a cultural momentum of inertia 1. Vision 2. Customer / Quality Focus 3. Integrity 4. Accountability / Commitment 5. Communication / Influence 6. Shared Ownership 7. Team Builder / Empowerment 8. Knowledge / Expertise / Intellect 9. Initiative / Speed 10. Global Mind-set

26. © 262014 Copyright Genpact. All Rights Reserved. .99999 (Risk-Free “Perfection Myth” Cultures) 75% Right (Enterprise Risk Tolerance) 60% Right (Startup Risk Tolerance) What are the ideas and economic value that have been lost to GE Risk bands? Risk-Free Perfection?

27. © 272014 Copyright Genpact. All Rights Reserved. =+Growth Acquisitions Siloed teams Controllership & compliance+ + Examples Workflow “hell” Customer feedback IT Programs tollgate process Acquisition integrations ^

30. © 302014 Copyright Genpact. All Rights Reserved. FastWorks is a set of tools, principles and behaviors that will…  Get closer to customers  Increase speed to market  Increase chance of success  Make it easier to get things done

31. © 312014 Copyright Genpact. All Rights Reserved. The Lean Startup Philosophy • The concept of “an entrepreneur” includes anyone who works within the definition of a startup: a human institution designed to create new products and services under conditions of extreme uncertainty 1. Entrepreneurs are everywhere • A startup is an institution, not just a product, and so it requires a new kind of management specifically geared to its context of extreme uncertainty. 2. Entrepreneurship is management • Startups exists to learn how to build a sustainable business, which can be validated scientifically by running frequent experiments that allow entrepreneurs to test each element of their vision 3. Validated Learnings • The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. The goal is to accelerate this feedback loop. 4. Build –Measure – Learn • To improve entrepreneurial outcomes and hold innovators accountable, we need to focus on the boring stuff: how to measure progress, how to set up milestones, and how to prioritize work. 5. Innovation Accounting

32. © 322014 Copyright Genpact. All Rights Reserved. The Startup Playbook Philosophy • Don’t chase ideas that are simply features, or partial services, that couldn’t compete in mature markets. To customers, these are elective, much like taking a vitamin. Instead provide a painkiller that relieves a customer pain point and forever. 1. Build painkillers, not vitamins • Be ten times better than your competitors. “You cannot be incrementally better. Incrementalism kills companies.” Focus on a strength that allows you to radically differentiate your offering. 2. Be ten times better • Understand a broad range of trends and data to help identify the One Big Idea that can truly win a new market. 3. Ruthlessly focus on your biggest ideas • “If you consider how difficult and improbable breakout success is in any given market, you can begin to understand why it is so critical to use a battering ram of proprietary assets…” 4. Play to your strengths • Thinking “monopolistically” is a way to focus on building market-dominating offerings. Provide this vision early in the process to build winning ventures. 5. Be a monopolist

33. © 332014 Copyright Genpact. All Rights Reserved. FastWorks, Lean, Six Sigma Six Sigma >>| Reduce defect. Variation is evil Lean >>| Eliminate waste from process FastWorks >>| (Whatever it takes) Get output in front of customers ASAP (don’t wait for “perfection”). Learn about it as much as we can. Act decisively and quickly if the feedback points in a new direction.

34. © 342014 Copyright Genpact. All Rights Reserved. FastWorks Vocabulary Customer Engagement: Customers must be a part of the solution. Co-create with customers early and often to really bring value to your customers. Focus on customer pain points to build painkillers, not vitamins. Leap of Faith Assumptions: Understand, document and prove (or disprove) all the assumptions in your journey. Success requires early learning and validation of key hypotheses. Speed: Teams need to reduce the amount of time it takes to get through the “Build-Measure-Learn” loop. Get comfortable with “good enough” decision making. There’s often no “right” answer for innovation, as tough as that is for us. Learning Measures: Innovation metrics are different. You need to find measurements that validate learning against key hypotheses. Don’t get paralyzed by imperfect data. Island of Freedom: Make sure that you have Executive sponsorship to protect funding and resources. Experimentation and Iteration: Experiment as necessary to learn from customers and quickly make changes. Take the information that you have and quickly make adjustments as you progress. Pivot or Persevere: A pivot is a change in strategy without a change in vision. If you find a that a critical hypotheses is invalid, have the courage to pivot to a new hypothesis Minimum Viable Product: A version of the offering that allows you to learn from customers with the least amount of effort and development time. It tests your critical assumptions.

36. © 362014 Copyright Genpact. All Rights Reserved. FastWorks Framework … from the customers point of view 1| Problem statement … that are critical to project success 2| Define leaps of faith … accessible, actionable & auditable 3| Learning Merics … tests to validate assumptions 3| Build MVPs 5| Pivot or persevere … make changes based on learning

37. © 372014 Copyright Genpact. All Rights Reserved. Innovation Accounting The Three Learning Milestones 1.Establish the baseline -Build a Minimum Viable Product (MVP) -Measure how customers behave right now 2.Tune the engine - Experiment to see if we can improve metrics from the baseline towards the ideal 3.Pivot or persevere - When experiments reach diminishing returns, it’s time to pivot.

38. © 382014 Copyright Genpact. All Rights Reserved. A minimum viable product (MVP) is the "version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.” Visionary customers can “fill in the gaps” on missing features, if the product solves a real problem Allows us to achieve a big vision in small increments without going in circles Requires a commitment to iteration MVP is only for BIG VISION products; unnecessary for minimal products. Minimum Viable Product

39. © 392014 Copyright Genpact. All Rights Reserved. Minimum Viable Product The goal of a MVP is to test fundamental business hypotheses (or leap-of-faith assumptions) and to help entrepreneurs begin the learning process as quickly as possible. A first product version to test our ideas as quickly and cheaply as possible. This could be a throwaway prototype such as a mock-up or a product increment, working software that is tested and documented. The MVP works together with a build-measure-learn cycle: developing software, gathering customer feedback, and learning from it.

40. © 402014 Copyright Genpact. All Rights Reserved. Leap of Faith Assumptions Leap of Faith Assumptions (LOFAs) form the basis upon which you are supposing your product or service has value (Value hypothesis) as well as scale (Growth hypothesis). LOFAs are the most critical elements of your plan ... the parts on which everything depends.

44. © 442014 Copyright Genpact. All Rights Reserved. Pivot or Persevere: Pivot A “structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.” A pivot decision is based on validated learning.

45. © 452014 Copyright Genpact. All Rights Reserved. Thought: FastWorks as a Guiding Approach for ERP Programs Define problem 1| Problem statement Identify “leap of faith” assumptions 2| Define leaps of faith Identify and track learnings metrics 4| Measure Validate assumptions 3| Build MVPs 5| Learn from MVP “Pivot or persevere” based on learnings Design TestingFoundation • Assess the business value of the processes • Develop benchmarks for critical processes • Identify significant process risks • “Big Rock” Issues • Identify ERP-Business Alignment Gaps • Demo/POC of Oracle features to business • Process walk by business for ERP team • Consensus on priorities • LOFA Assumptions • Test Assumptions through Benchmarking MVP: Minimum Viable Product • Develop Processes with focus on synergy • Leverage Genpact SEP, design frameworks • Min customizations – max standardization • Prioritize User touch over documentation / approvals • Lots of POCs/Demons to showcase MVP, and feedback • Drive Accountability through user engagement • Mini-CRPs & User Storyboards to generate MVP learning • Utilize Sprints to harvest MVP learnings into Solution • CRP: Pivot or Persevere point Closer to Business floor than ERP war room | Quicker rather than perfect-the-first- time | Empowered decision-making | Emphasis on user engagement than approval workflows | Continuous learning events and reiterative close-lopping through Sprints

46. © 462014 Copyright Genpact. All Rights Reserved. Thought: Accelerate Every Step of ERP using FastWorks Learn Faster • Extensive storyboarding with users • Continuous Learning Events: for both ERP & Business Teams • Mini-CRPs, CRPs, POCs, Demos, Smoke Tests • Cross-functional ownership of process & design across biz • Failure Walks: Its OK to fail, not OK not to learn • Learning Tracker Build Faster • Mini-CRPs • Reuse Design Patterns • Agile for Incremental Design & Development • User involvement in Unit Tests • Continuous, Incremental Integration Builds • More focus on user engagement than documentation Measure Faster • Engage user for feedback early • Iterative mini-CRPs • Storyboard Processes & Design • User Liaison during Design & Unit Test • Smoke Tests • Split Tests

Overview of Lean Startup and FastWorks

Overview of Lean Startup and FastWorks

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Overview of Lean Startup and FastWorks