The Lean Startup - Eric Ries [7]
For example, consider the recommendation that you build cross-functional teams and hold them accountable to what we call learning milestones instead of organizing your company into strict functional departments (marketing, sales, information technology, human resources, etc.) that hold people accountable for performing well in their specialized areas (see Chapter 7). Perhaps you agree with this recommendation, or perhaps you are skeptical. Either way, if you decide to implement it, I predict that you pretty quickly will get feedback from your teams that the new process is reducing their productivity. They will ask to go back to the old way of working, in which they had the opportunity to “stay efficient” by working in larger batches and passing work between departments.
It’s safe to predict this result, and not just because I have seen it many times in the companies I work with. It is a straightforward prediction of the Lean Startup theory itself. When people are used to evaluating their productivity locally, they feel that a good day is one in which they did their job well all day. When I worked as a programmer, that meant eight straight hours of programming without interruption. That was a good day. In contrast, if I was interrupted with questions, process, or—heaven forbid—meetings, I felt bad. What did I really accomplish that day? Code and product features were tangible to me; I could see them, understand them, and show them off. Learning, by contrast, is frustratingly intangible.
The Lean Startup asks people to start measuring their productivity differently. Because startups often accidentally build something nobody wants, it doesn’t matter much if they do it on time and on budget. The goal of a startup is to figure out the right thing to build—the thing customers want and will pay for—as quickly as possible. In other words, the Lean Startup is a new way of looking at the development of innovative new products that emphasizes fast iteration and customer insight, a huge vision, and great ambition, all at the same time.
Henry Ford is one of the most successful and celebrated entrepreneurs of all time. Since the idea of management has been bound up with the history of the automobile since its first days, I believe it is fitting to use the automobile as a metaphor for a startup.
An internal combustion automobile is powered by two important and very different feedback loops. The first feedback loop is deep inside the engine. Before Henry Ford was a famous CEO, he was an engineer. He spent his days and nights tinkering in his garage with the precise mechanics of getting the engine cylinders to move. Each tiny explosion within the cylinder provides the motive force to turn the wheels but also drives the ignition of the next explosion. Unless the timing of this feedback loop is managed precisely, the engine will sputter and break down.
Startups have a similar engine that I call the engine of growth. The markets and customers for startups are diverse: a toy company, a consulting firm, and a manufacturing plant may not seem like they have much in common, but, as we’ll see, they operate with the same engine of growth.
Every new version of a product, every new feature, and every new marketing program is an attempt to improve this engine of growth. Like Henry Ford’s tinkering in his garage, not all of these changes turn out to be improvements. New product development happens in fits and starts. Much of the time in a startup’s life is spent tuning the engine by making improvements in product, marketing, or operations.
The second important feedback loop in an automobile is between the driver and the steering wheel. This feedback is so immediate and automatic that we often don’t think about it, but it is steering that differentiates driving from most other forms of transportation. If you have a daily commute, you probably know the route so well that your hands seem to steer you there on their own accord. We can practically drive the route in our sleep. Yet if I asked you to close your eyes and