Comments for Nimble execution: learn cheaply and adapt quickly

Clémentine Henrioulle

(Article) Collis, D. (2016). Lean strategy. Harvard Business Review, 94(3), 62-68

Introduction: In this article David introduces Strategy and Entrepreneurship as polar opposites. Yet two concepts that need each other and are fundamental to ensure success. Many entrepreneurs fail to understand the effectiveness of the strategy and also do not understand that without the adequate managing strategic growth initiatives, the innovation can be undermine.To overcome some startups failure, the article approaches the…
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Introduction:
In this article David introduces Strategy and Entrepreneurship as polar opposites. Yet two concepts that need each other and are fundamental to ensure success. Many entrepreneurs fail to understand the effectiveness of the strategy and also do not understand that without the adequate managing strategic growth initiatives, the innovation can be undermine.To overcome some startups failure, the article approaches the lean strategy process.

Key Insights:
Strategy is seen as a pursuit of a clearly defined path through a set of activities, helps managers to figure out how to manage and wisely deploy the external resources. On the other side, entrepreneurship is what allows the enterprise to explore the right innovations, requiring ventures to pivot in new directions as information and markets shift rapidly. The article focuses on the achievement of an enduring success, enterprises have to find a balance by sticking up to a specific strategy while keeping an entrepreneurial spirit. Moreover, strategy helps entrepreneurs in 4 things: choose a viable opportunity, stay focused on the prize, align the entire organization and lastly make the necessary commitments. The appropriate strategy adopted can be implement with the following 3 entrepreneurial techniques: vision, deliberate a strategy and emergent strategy.

Implications:
First, entrepreneurs have to identify “what business they are in” and draw boundaries around what the venture will and will not do through defining the deliberate strategy. Firms will differentiate themselves from competitors, capture a specific market segment and meet the customer’s need by tackling the market with an innovative approach. Secondly, it is important that managers carefully dig down into where things went right or wrong, which hypotheses were validated or disproved, in order to amend the strategy wisely and react in an agile way. They should test hypotheses through identifying current mismatches, gaps, or opportunities in the offering’s fit with the market. Ex: Southwest customer self-service approach.

Limitations:
1)Managers should align the entire organization. Small start-ups can easily coordinate activities through daily personal interaction. On the other hand, large ventures can control the individual act by project management, a bureaucracy or a strategy. Therefore, the larger a company becomes, the more necessary the company adopt projected based structure. Of course, the structure is regulated by some aspects like the type of employment, the rewarding system, or the introduced IT system. But the strategy with project management supports the company’s distinctive value position. For example, the author asserts an educational gaming firm. At first, the firm takes up work-for-hire as the type of employment, and it produced one-off games. However, after the firm realized that they had to focus on educational publishers, and built software platform for the developers, they can achieve a better result.
2)Side-effect of feedback: Focusing too much on customers feedbacks might lead entrepreneurs to change their idea so frequently that they end up losing track on their objectives. Also, the entrepreneurs’ confidence might decrease when they receive too much negative responses. In addition, an idea can be mistakenly rejected because there are no rules which specify when entrepreneurs stop testing, declare victory or begin scaling production. Finally, lean strategy is effective for projects like developing a software or a website, but obviously there are some cases that require other project management methodology such as Waterfall

Further References:
We choose two further references as addition to the knowledge given in our article. The first one is an article written by Steven Blank and is about the application of lean development in the Start-Ups area. The article explains that only 25 percent of the start-ups end up as a success. Lean development favors experimentation over elaborate planning and this, following to the article, will improve grandly the success-rate of start-ups (Minimal Viable Product – Pivoting).
The second reference is a book written by Niklas Modig and Par Ahlstrom and provides a lot of experience-based examples on what is Lean and what is not. Its reading learns you on how to structure your thinking towards applications of lean throughout your work experience in the future.
https://hbr.org/…/…/why-the-lean-start-up-changes-everything
https://leankit.com/…/2017/02/top-5-lean-books-add-reading…/

Conclusion:
Lean strategy process makes strategy and entrepreneurship work together. It identifies on what companies and managers have to focus on and on what they do not have to focus on. It defines the boundaries of the market in which the company enters, and requires the company to make a good analysis of itself to understand its goal, vision and strategy. As said in the limitations, we have to be careful with lean strategy because each company and each market are really different.

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ALEXANDRE Charline, BLANCKAERT Lucie, DEKIMPE Emilie, GENIN Alix, STAINIER Laura

Eisenhardt, K. M., & Tabrizi, B. N. (1995). Accelerating adaptive processes: Product innovation in the global computer industry. Administrative Science Quarterly, 84-110.

Key insights: This article insists on the necessity of contemporary firms to adapt quickly and as fast as their competitors otherwise, there are risks to collapse. This ability has become a strategic competitive advantage in many sectors. However, even if innovation is crucial for a company, the pace at which it occurs is even more crucial. In the article, two…
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Key insights: This article insists on the necessity of contemporary firms to adapt quickly and as fast as their competitors otherwise, there are risks to collapse. This ability has become a strategic competitive advantage in many sectors. However, even if innovation is crucial for a company, the pace at which it occurs is even more crucial. In the article, two models have been developed to help firms to accelerate the development process of new products:
A.Compression model: This model is mainly based on the assumption that the development is composed by a predictable series of compressed steps happening in certain, predictable and well-understood environments. In this model, the organization must take time to schedule and plan the development of the product for several reasons. First, it enables to remove unnecessary steps and sequence well the activities. Secondly, it allows to delegate tasks to the best-qualified people what can considerably reduce processing time and bring another point of view on the product development. Also, by using the Computer-Aided Design tool, it allows developers to reach a final design more quickly through the automation of predictable computational procedures. Moreover, wait between steps or overlapping them can significantly reduce development length. Furthermore, adding some deadlines and giving rewards to workers when they respect the deadlines can be a motivation to process quicker.
B.Experiential model: This model occurs in flexible, adaptive and organic organizations when the situation, the technologies and the market are uncertain. In this environment, the company must rely on real-time information, be flexible, have a solid structure and be confident what lets a wide space for improvisation. To develop the product, the firm has to make several iterations that can be simultaneous, alternative designs, designs that are iterations of previous ones or a combination between 2. It will help to accelerate the understanding of the product, improve the confidence of developers and help to detect strengths and weaknesses earlier.

Implications: As a manager, the most important thing to do is to do the right choice concerning the innovation model to adopt. Indeed, both models are not adapted to every company and depending on the environment, they would have to choose one or another model. To make sure they have made the right choice, they could put in place a follow-up.
Then, firms have to develop relationships with their partners to create desire for projects and learn from them. By developing collaborative design, firms would “design with” rather than “design for”.
Finally, firms should establish innovation boundaries even if it can be perceived negatively. It will help to quickly filter the ideas to focus on the most promising opportunities aligned with the strategy. One way is to focus on the mission of the company and on the ultimate value it aims to deliver rather than on the product itself.

Limitations: One of the biggest limitation is the difference that can exist between theory and practice. Indeed, the hypothesis that the two models helps to reduce time is not always true. Researchers have shown results that were opposite to the theory. Concerning the compression model, there is only one condition (cross-functional teams) on six that was leading to faster product development.
Another limitation is about the timing. Too fast product development and too fast market entry can be a trap because of a bad market targeting. It is sometimes better to invest in an experiment and R&D to have the guarantee of the success.

Further references:
• Bytheway, C. W. (2007). FAST creativity and innovation: Rapidly improving processes, product development and solving complex problems. J. Ross Publishing.
• Cankurtaran, P., Langerak, F., & Griffin, A. (2013). Consequences of new product development speed: A meta‐analysis. Journal of Product Innovation Management, 30(3), 465-486.
Fast Innovation, Pau Garcia Mila, published by TedX talks, 26 june 2016, https://www.youtube.com/watch?v=YPuXLEqK_uU

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Alicia Sottiaux, Virgile Vandeput, Valentine Brognion, Mathilde Lebfevre, Maurice Martin

(Article) Magnusson, M., Boccardelli, P., & Börjesson, S. (2009). Managing the Efficiency-Flexibility Tension in Innovation: Strategic and Organizational Aspects. Creativity and Innovation Management, 18(1), 2-7.

The text summarize ideas from different papers presented at the 8th International CINet (Continuous Innovation Network) conference in Gothenburg in order to share knowledge in the field of continuous innovation. It outlines the efficiency-flexibility tension in innovation. First, companies can focus their strategy on efficiency. Many of the actual products deal with a steady state of innovation that includes efficiency…
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The text summarize ideas from different papers presented at the 8th International CINet (Continuous Innovation Network) conference in Gothenburg in order to share knowledge in the field of continuous innovation. It outlines the efficiency-flexibility tension in innovation.

First, companies can focus their strategy on efficiency. Many of the actual products deal with a steady state of innovation that includes efficiency in term of cost and lead time reduction. Instead of making one a big innovation, the idea of efficiency fits more with small changes on the product and come closer to the notion of incremental innovation. It is thanks to a serie of small improvements to an existing product that a company can empower its competitive position over time. It also goes along a short-term vision and finally focuses on what you know and on exploitation of our own knowledge.

The second key point is in opposition with the first one. Indeed, to generate success and survive in the long term, a company needs revolutionary and discontinuous innovations. It means that innovations can be characterized by a certain level of ambiguity, novelty and uncertainty. They are radically different from traditional product development. It is important to understand that the market is constantly changing and that this kind of innovation allows to explore knowledge in a new way thanks to flexibility.

The last key point is in fact the tension created in the company due to the presence of efficiency and flexibility needs in businesses. A balance need to be find between these two types of innovation. It is important because on the one hand, if organizations focus on the efficiency, it can sometimes be an obstacle to innovation. On the other hand more flexible innovation don’t always reach enough effectiveness. Managing these two view will help to have a balance between short term vision and long term vision.

A first implication that companies can learn from this report is the possibility to build entrepreneurial units. By separating their activities, businesses will be able to make both efficiency and flexibility exist in different part of the company. It is necessary to have heterogeneity and that these two concepts coexist in harmony. We can witness here the crucial role of managers because they are the ones able to allow a 2-faces-company to get developed.

Finally, this balance can be done with outsourcing. On the one hand choosing a low-cost oriented outsourcing will lead to more efficiency. On the other hand, working with an innovation oriented subcontractor will improve the company’s flexibility. Depending on what we want for the company we can balance these two types of outsourcing to try to solve the efficiency-flexibility tension present in organization.

Further ref:
Grimpe C., Kaiser U., (2010). Balancing Internal and External Knowledge Acquisition: The Gains and Pains from R&D Outsourcing, Special Issue : Offshoring and outsourcing.

Willcocks, L., & Griffiths, C. (2010). The crucial role of middle management in outsourcing. MIS quarterly executive, 9(3).

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BLIN Laurence, DUBUS Sarah, GILLAIN Jérome, VAN HECKE Julien, VERMEULEN Julien

Moogk, D. R. (2012). Minimum viable product and the importance of experimentation in technology startups. Technology Innovation Management Review, 2(3).

This article is inspired by the book “The lean startup” which proposes a methodology for startups to develop a product in a way that shortens the development cycles. The objective here is to explain a bit further the concept of accelerated learning through experimentation designed to validate the potential of an innovation against some pertinent metrics. In this review, the author…
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This article is inspired by the book “The lean startup” which proposes a methodology for startups to develop a product in a way that shortens the development cycles. The objective here is to explain a bit further the concept of accelerated learning through experimentation designed to validate the potential of an innovation against some pertinent metrics.
In this review, the author seems to think that startups should not spend too much time defining a strategy, developing products, … But rather that, they should focus on quickly getting on the market place to test their idea. The reason for this belief is that, often, startups tend to develop a full product based on the assumption that their product will be embraced. The problem is that developing a full product before testing a concept is risky due to the extreme uncertainty associated with startup operations. Hence, startups need to operate in a way that will provide them with the opportunity to learn while validating their vision.

Out of this article, we were able to highlight three different implications for managers : first, such a manager can use the concept of minimum viable product. To do so, he has to create an incomplete version of a product that could be valued by customers. The next step is to conduct experiments with that MVP and gather feedbacks on its attractiveness. The final phase consists on analyzing and using the collected data to improve the MVP, and start the process all over again. Second, a start-up has to be managed in a way that accelerates this cycle, also called feedback loop, to make the learning procedure faster. Finally, an efficient tool to accelerate this feedback loop is the engine of growth, divided in three parts: the sticky, the viral and the paid engines of growth. They each measure a different aspect of success. The sticky one is related to the retention of clients. The second one concerns the word of mouth. The last one relates to the classic advertisement strategy. Most small companies only focus on one of them but it is yet common for a company to use two or three of them.

However, some limitations are important to point out. The first limitation for companies using MVP is the risk that other companies will overtake them by launching a similar product that better meets consumer needs. A second limitation concerns the consumer’s appreciation of the MVP. If the customer is disappointed, chances are that he will no longer want to consume the product even if it is later improved. Indeed, the first impression is often the most important. Then, another limitation is that MVPs cannot be used in all sectors. As a matter of fact, in some industries, companies need to have an optimal product when it is launched on the market, such as the pharmaceutical or car industry. Finally, the metric that will be used to assess the impact of a MVP has to be well-thought-out. If it just focuses on newly acquired customers, it could bias the assessment because of the disengaged customers that will also be included. It may comes out that, to measure the success of an MVP, clear expectations about the product need to be set up. Ways to implement that could be to measure engagement of customers via apps or a system of signs up. Crowdfunding is also an effective way to measure the demand and the interest of investors in our project.
To go further, we propose the article: “MPV explained: a systematic mapping study on the definition of MVP”. This article can help to keep a critical view on what MVP truly is by comparing different definitions of it. Moreover, the article “Impact of Agile Methodology on Software Development Process” could be interesting in the way that the agile method is closely linked to the MVP.

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Robin Barbiere

Doz, Y. L., & Kosonen, M. (2010). Embedding strategic agility: A leadership agenda for accelerating business model renewal. Long Range Planning, 43(2-3), 370-382

1. Key Insights A. The first concept on which this article focuses is strategic sensitivity. It consists in increasing the awareness of future strategic change. You also must re-describe your business model in a more conceptual manner and not be afraid to discuss strategic matters in a frank way. B. The second crucial notion is related to the leadership unity. This concept is about…
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1. Key Insights
A. The first concept on which this article focuses is strategic sensitivity. It consists in increasing the awareness of future strategic change. You also must re-describe your business model in a more conceptual manner and not be afraid to discuss strategic matters in a frank way.
B. The second crucial notion is related to the leadership unity. This concept is about being able to take fast decisions and to forget a bit about top-down communication. It stands that you must absolutely express clearly your ideas and concerns while being aware of the opinion of any member of the organization. These managerial attitudes could help to find a relevant common ground in the organization’s activities.
C. The third and last key insight titled is resource fluidity and is related to the ability of the organization to change priorities and reallocate resources rapidly to new tasks when needed.
2. Implications
A. The first thing to which, according to us, managers should pay the highest attention, is the importance to find the right target for your organization and once it’s done focus on it. It is often a tough matter to choose a relevant target for the upcoming years. On the one hand, if you are already fulfilling your current customer’s needs, it’s tempting to keep on with them and only adapt your business model in order to increase their satisfaction. On the other hand, it’s likely that you spot new customer opportunities which would require you to operate changes in your business model. It is then a big deal for managers to find what strategy will grant the bigger and most interesting target.
B. Our second implication is to set in place a lot of mechanisms such as market research, data analysis, consultancy with innovations experts, etc., in order to foresee how your sector is evolving and to catch up a good position for the future. It is not right to think “my activity is selling CDs”, if a manager was thinking that several years ago, he is probably not on the market anymore. You should rather think “my activity is allowing people to listen to music” and then explore all potential technologies which could be used to listen to music. By thinking this way, you could have caught up with streaming platforms.
3. Limitations
A. The first limitation, which is going by pair with our first implication, is the unforeseen and strict change in mentalities. Even if you did deep research in order to find a relevant segment of customers to focus on and that it is working for you, it can happen that mentalities change radically in a very short time. Therefore, your positioning could be so opposite to those mentality changes that it is nearly impossible for you to meet them on time. We can think about the recent strong interest of young people for ecology and their sense of urgency to act for the planet. Those teenagers weren’t part of the population expected to grow the highest interest in those issues, and that caused issues to some companies.
B. Now our second limitation, linked to our second implication, is that when you work in order to foresee the future of your sector, it is likely that you find multiple paths to follow and that you have to make a decision. Today, banks could have to decide to either optimize their online payments current solutions or to invest a lot in cryptocurrencies, without knowing what will work.
Further references
A. (Article) Chesbourgh, H. (2010) Business Model Innovation: Opportunities and Barriers, Long Range Planning, 43(2-3), 354-363.
B. (Article) Smith, W.K., Binns, A., Tushman, M.L. (2010). Complex Business Models: Managing Strategic Paradoxes Simultaneously, Long Range Planning, 43(2-3), 448-461.
C. (Video) Business Model Innovation – The secret behind Amazon, Spotify and Tinder success (2017).

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