Although its name refers to the startup, this chapter is for all entrepreneurs and anyone wishing to start a project (on the Internet or outside internet). It gives a clear methodology on how to develop and adapt a project of uncertainties extreme conditions. It is highly recommended that one should have knowledge on “Lean Management to build a successful startup or a company”.
It is recently emerging force defending to do less risky the beginning of any company is a methodology called Lean Startup that favors experimentation on the planning that takes into account the feedback from the client about intuition. Although these methods have only a couple of years, the concept of Minimum Viable Project and pivot quickly stalled roots Startups world and business schools have quickly adopted this methodology also impart.
“Lean Management” has not always been a fashion and yet only now is beginning to have a real impact and spread their practice within the community of entrepreneurs and companies that are committed to it. The new companies are trying to improve their chances of success by following its principles of fast failure and learn continuously. Importantly, long-term, many of the successes that have been corporations have been due to the implementation of this methodology.
Best Ways on Lean Management Strategy, You Should Think of:
It is always said that big steps always doesn’t lead to success but a small systematic steps will have great impact to build a successful startup or a company. Here we will highlight the key steps that need to be followed as a part for lean management to make your business or a startup successful.
1. Lean Startup Methodology:
The name lean startup is from the lean manufacturing revolution led by Taiichi Ohno and Shigeo Shingo within Toyota. Lean startup adapts these ideas to the context of entrepreneurship. The idea is to develop methods to measure progress in a context of extreme uncertainty.
The different methods applied by Lean startup:
- It is better to create cross-functional teams rather than specific departments. This approach helps make individuals responsible for “learning steps” rather than their performance in their industry.
- The startups have in common growth engine. Any contribution in the startup has the effect of improving the engine of growth.
- Instead of making complex plans that are based on assumptions, it is best to make adjustments that are based on the principle of the building – measuring – learning. This allows knowing in time whether to continue in one direction or make a pivot, that is to say, a change in order to move in a better direction.
- Startups have a vision, that of a project that changes the world. To achieve this vision, it is necessary to use strategies. The product of a startup is the result of this strategy.
- The products are constantly changing throughout the optimization process. It is the process of development.
2. Lean Management:
A startup is a human institution designed to create a new product or service. In this definition highlights the fact that a startup is not just something about a product or service. It is a human enterprise in which is present a set of varied activities such as recruitment, the creation of culture, etc. As per Lean management strategy, you should first analyse your business activities, skill sets required and plan on how to manage the same. Wrong skill set hiring or bulk hiring without proper plan may have a huge impact on your business goals.
3. Lean Management Strategy, As a Learning:
Under the conditions of the uncertainty of a startup, learning is the most vital function. It is to learn what elements of the strategy that function in order to realize the initial vision. This is what the author calls the validation of learning. This is a method to demonstrate progress in short time.
For Example: The team of Eric Ries has set a target of six months to start their product and attract their first customers. The goal was very ambitious in relation to all the work he had imagined but he wanted to respect this time limit. Shortly before the start, stress went up because the product was very rough compared to what had been imagined. Therefore, how to define what really needs to be done to bring value to the customer? For this it is necessary to go through validation of learning: the effort that is not absolutely necessary to learn what the customer wants can be eliminated.
There is no predefined method to validate a hypothesis. We must put all his work to discover what customers want and adjust the product and strategy to meet its expectations. If you understand your customers better, you’ll improve your inevitable product.
4. Lean Management Strategy, As an Experiment:
The principle of Lean Management is a scientific approach. Thus, to introduce this chapter, the author explains that one of the most important lessons of the scientific method is that if we cannot fail, so we cannot learn.
As scientific experimentation is guided by theory, experimentation of the startup is guided by its vision. The goal is to discover how to build a sustainable project that follows this vision.
- Think wide, start small.
- For a long-term change, experiment immediately.
The first stage and to decompose the vision in its various components. The two most significant assumptions that entrepreneurs must do are: It is necessary to start finding precursors followers, that is to say, customers who feel the need of the product with the cutest. You must then define the minimum viable product. This is to conduct an experiment on potential customers, according to the project vision and to collect feedback to improve the project.
5. Lean Management Strategy, As an Act of faith:
The Lean Management Strategy is based on assumptions. Every project begins with the development issues. Aim of the strategy to discover what the right questions to ask are.
The first challenge for an entrepreneur is to build an organization that can systematically test assumptions. The second challenge of all entrepreneurial situations is to perform rigorous testing without losing sight of the overall vision of the company.
You should design strategy based on typical customer. The purpose of entering previously interacted with a customer does not get all the answers to our questions but to understand the client and their problems.
6. Lean Management Strategy, As a Testing:
The minimum viability of a product helps entrepreneurs start the learning process as quickly as possible. This is not necessarily the smallest but simply the fastest way to develop the product feedback cycle build – Measure – Learn with minimal effort. Unlike a prototype or test a concept, the minimum viability of a product (MVP) is not created just to meet a product design or technical questions. Its purpose is to test the basic assumptions of a project.
It is necessary to invest in the design if customers do not understand how they are using the product. First of all, what it is imperative to focus as quickly as possible is the Validation of learning. In developing the MVP, keep it simple: eliminate features, processes, and all the efforts that do not contribute directly to the intended learning.
Do not be afraid of competitors because ideas have always existed. It is their implementation and prioritization of events that is difficult to implement and that defines the success or failure of a startup. In this battle, the one that happens to put in place as soon as the cycle feedback “build – measure – learn”. As per lean management strategy, successful startups or successful companies are those who learn faster than anyone else.
7. Lean Management Strategy, As a Measure:
The job of a startup is to rigorously measure where it is in the evolution of his project, to confront the truths that evaluations reveal and then to design experiments to learn how to have real numbers to those who are written in the Plan project.
Most of the development stages of a project developed in the same way: a development stage we define (a new feature of the website for example), optionally request the opinion of a few customers, and we look at whether the number customer will increase. Unfortunately, this is not a good indicator of lean management to define whether a startup is making progress.
- How innovation works are accounted.
- Use a minimum viable product to establish actual data on the current state of the business. Without data, it is not possible to measure progress.
- Bring some optimizations to the product in order to reach an ideal product.
- The third step is to do a pivot or persevere in the path chosen.
- Establish the basis and ethics of business.
We must first create a product with a minimum of viability (MVP). One can choose to create a single test all assumptions about the project at one time or create multiple MVP and analyze a case at a time.
8. Lean Management Strategy, As a Growing:
The concept is simple enough to understand: if the acquired customer rate is higher churn, the product is growing. It is important to base its judgment on actionable data as the activation rate or revenue per customer, not on raw or conceited general data.
The idea is to attract one way or another very large number of users. This model is based more on the social networks. It is important that the data can also be measured on the actionable database. The author speaks of the viral factor which represents the number of the new users based on the users already registered. This is the viral phenomenon.
9. Lean Management Strategy, As a Adapt:
When a company grows it is necessary to add processes and systems to coordinate the company’s operations to evolve to a higher level. Growth and enthusiasm doesn’t means in the shift of the plan. It is just the improvement on your business plan and business ideas. A company or a startup should always be ready to adapt changes. The one who doesn’t change according to the customer or according to the change in the world needs, would result in the bad lean management strategy.
10. Lean Management Strategy, As an Innovation:
In this lean management strategy, we learned that innovation has nothing to do with the size of the company but with the management of the company’s philosophy.
In a startup, you need three attributes that define the structure have limited resources but secure, independent authority to develop the project and personal participation in the results.
- The budget of a startup does not have to be huge, but it must be managed well.
- The development of the project must be completely autonomous, that is to say, it should not be approved by external entities.
- Entrepreneurs need to mark their participation in the project development.
- Create a platform of Innovation for research and development as per future needs of the customers.
We must create businesses with a long-term mission to change the world for the better. And beyond all, we must avoid wasting people’s time. Lean management methodology and strategy assist us on how to create a business plan for long run. It is highly recommended that go slow but do not deviate yourself from business plans and business ideas. This will lead you to make a successful startup or an enterpurership in long-term.
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Startup Basics for Beginners
- Chapter 1: What is a Startup? Definition, Examples and Startup Operations
- Chapter 2: What are the Startup Requirements? Checklist and Feasibility Analysis
- Chapter 3: What Is Lean Startup? Definition, Examples, Process and Limitations
- Chapter 4: Top 10 Key Benefits and Reasons to Start a Business
- Chapter 5: How to Start a Company or a Business – Step by Step Guide
- Chapter 6: How to Master in business fundamentals? Basics Guide of Startup
- Chapter 7: Top 10 Best Startup Ideas with Low Investment
- Chapter 8: Top 10 Best Sources for Startup Business Funding for Your Idea
- Chapter 9: Legal Formalities - How to Register a Company or a Startup in India?
- Currently Reading: Top 10 - Best Tactics on Lean Management Strategy
- Chapter 11: How to Analyze Your Startup Business Plan with SWOT Analysis?
- Chapter 12: Best Ways - To Build a Successful Startup Plan and Strategy
- Chapter 13: What is Power of Crowdfunding for Startups and Business?
- Chapter 14: Basics of Startup Quiz – Question and Answers for Beginners
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