1. Define the high level business+tech concept; if it might be viable, proceed.
The first step is, of course, universal: to define what your business concept is. We call this your value strategy. At this point, the value strategy might just be an idea. In step 3 we will flesh it out into a well formed Lean experiment.
Your value strategy might be based on a technical strategy, a market strategy, or some other critical supporting strategy.
Sometimes your value strategy might be based on a technical strategy or a marketing strategy. For example, if your idea is an attempt to take advantage of a new technology, then that technology is inseparable from your value strategy. As another example, if your idea attempts to leverage some special market advantage that you have, then your value strategy is inseparable from your go-to-market strategy. Thus, your initial strategy concept must include the elements that are essential, at least at a conceptual level. (See the strategy chart at the right.)
The essential questions to ask yourself at this point are listed at the right, under Questions to Ask Yourself In This Step. The answers to these questions check your thinking, and also help to define the beginnings of your value strategy.
An important consideration is your organizational context. There are two general cases: (1) you are on your own—not part of an organization; or (2) you are part of a larger organization, and your idea will become a program, product, or initiative within that organization, at least initially.
If you are on your own, not part of a larger organization, then you are ready for step 2. That’s because you do not have to worry if your idea will fit into a larger portfolio of initiatives. But if you belong to an organization, then your idea will compete with other ideas and other initiatives that are already underway. Your hope is to get it into that pool of initiatives.
If You Are In an Established Organization
If your idea is not the only idea that is competing for funding or resources, then it must become part of a larger portfolio of initiatives. The investments in a portfolio need to be aligned with strategy. (See “Defining Strategies That Lead to Initiatives” in the panel on the right.)
In addition, an established organization has an existing culture. It is essential to determine what that culture is. An organization’s culture can either enable or severely impede the behaviors that are needed for agility—the Agile 2 behaviors. Use a culture survey tool such as the Human Synergistics Organizational Culture Inventory and Organizational Effectiveness Inventory to determine the cultural profile of your organization. (Agile 2 Academy can perform those for you.) The data that you collect about your culture will be used in step 4.
Constructive Agility is intended for helping you to structure an initiative, rather than for designing an entire organization that has multiple initiatives. Thus, it does not address business strategy, finance, and marketing. However, we do have some things to say about those things, because they strongly impact agility!
We advocate chunking investments into buckets that we call investment streams. An investment stream is an ongoing flow of funds set up for the purpose of creating, maintaining, and continuously improving a business capability.
If your idea warrants a very large investment, then it might make sense to make it an investment stream by itself. Generally, however, most initiatives—which includes most products—should belong to an investment stream that contains many supporting initiatives.
For products, chunking investments in this way enables decisions about product features to be made tactically, instead of freezing promised features into the product investment proposal. Instead, a proposal for a product in an existing investment stream should be brief and stated as a “Lean experiment”. (See the panel at the right.)
An investment stream continues indefinitely, until the business capability is retired as no longer needed by the business strategy. Investment streams are continuously adjusted in response to events. There is no funding cycle. This is very different from the traditional business finance approach of treating an investment as fixed, with an expected return on investment (ROI) at some predefined future point in time.
The reason this approach works is because expected return on investment is evaluated continuously: investment streams are examined for adjustment every time there is new information. Investments are increased, decreased, or terminated based on the current expected value of the investment. Suck costs are never considered.
Subtopics
Related Topics
Defining Investment Streams
Defining Strategies That Lead to Initiatives
Organizational Learning That Occurs In This Step
How to frame an idea so that its value is clear to others.
Questions to Ask Yourself In This Step
What is the essential idea?
What problem does it solve?
Who does it help?
Is it primarily a business idea, using technologies that have existed for awhile? Or is it primarily a technical idea—something that was not possible until now due to technical advancement?
Is the idea based on your unique position or capabilities?—that is, an inside-out opportunity? Or is it a general observation about a gap in the market?—what is often called an outside-in opportunity?
And is the idea do-able for you and your organization? Could you pull it off?
Quick Links
Identify the optimal sequence of capabilities to demonstrate or release
Identify key intersection points, critical paths, and integration strategies
Decompose each capability into a set of features to be concurrently developed
Start test marketing them as MVPs are produced, and feed results back to adjust visions