What Entrepreneur Eric Ries Taught Us About Agility
CMOs must be agents of change and make it possible for our companies to embrace an entrepreneurial mindset.
by CMO.com Team
Posted on 01-04-2018
How easy is it to get things done at your company? In today’s volatile world, the power to adapt and innovate at speed is a core competency for successful businesses. Rigidity and internal concentration—previously advantageous to organisations that were built to last—now put them at risk.
So it is incumbent on CMOs to be agents of change and make it possible for our companies to embrace an entrepreneurial mindset.
Author and entrepreneur Eric Ries, whose newest book, “The Startup Way,” reveals how much larger organisations can use “entrepreneurial management” to transform culture and work faster, recently came to Zone HQ to give a talk. He described how it is all too easy for departments to be cosy in their own little world, with employees concentrating on their own personal targets, without anyone stopping to think about whether they are doing the right things.
It can take an outsider like Ries to help a brand see the bigger picture, to “break the fantasy plans.” He spoke of “cascading consequences” if we don’t tell the truth. But it takes a brave marketer to put a hand up in a meeting and say: “Hang on. Does anyone really believe these forecasts are going to be true?”
As an example, Ries shared a story about a “lean business plan” he helped write, which was better in every way to the previous plan. The old plan was a traditional investment case that we would all recognise: a big request for capex funds, based on speculative five-year sales projections, with at least a year or so needed to build the product and take it to market.
The new plan, based on lean agile principles, required no sales guesswork and a far smaller up-front investment. The team would build a minimum viable product in months or even weeks and get it in front of customers as early as possible. If the response was successful or the customer feedback constructive enough to take the product on to another phase, then a little more budget would be approved to expand the idea further. If the product proved to be a bad idea, then it could be killed early before wasting money and time.
Everyone on the team agreed this was a better approach, but no one was prepared to take the new plan to senior management because they were afraid to stick their heads above the parapet. Eventually Ries convinced them to do so and take a note of how many meetings it took to get it signed off. It took 40 meetings! When the senior exec team found out about this soul-destroying process, it was a valuable lesson for them, too, as they realized just how hard it can be to get innovative work off the ground.
Large brands are sometimes reluctant to put a raw product in front of their customers, but getting an MVP in front of our target audience allows us to learn more quickly and discourages us from assuming we know what they want. This is surely a positive outcome for CMOs because it means we can have real confidence that the product we’re selling is genuinely meeting consumer needs.
One global brand embracing these principles is Marks and Spencer, which has set up a mixed agency and in-house team to research digital innovation and customer-facing concepts, including a same-day food delivery proposition and a service that lets you pay by your phone to skip busy queues in store. Having successfully tested these concepts on a very small scale using lean principles, M&S is now able to use its validated research to scale the ideas further.
I believe that being a successful marketer or manager today means making the right business decisions at speed. It’s a question of setting up our teams and business processes so we can innovate at pace. Doing nothing is not the safe choice.
Topics: Insights & Inspiration, Leadership, Experience Cloud, Insights Inspiration, Digital Transformation, Future of Work, Trends & Research, CMO by Adobe