In my last post I outlined how to make progress by leveraging the diversity of ideas from your internal teams using time-boxed LEAN Sprints. In this post, I’m going to focus on how to communicate this progress with your internal and external stakeholders using a business model progress timeline.
Let’s first paint the picture of how we currently demonstrate progress to our stakeholders.
Business Plans and Quarterly Board Meetings
The need to demonstrate at least the “potential for progress” often starts right at the business planning phase, where we have to justify our new venture to a VC, CFO, spouse, or even our own selves as a prerequisite to securing runway.
If you don’t already have demonstrable traction, the traditional approach is to slog through a 60-page business plan. While this exercise doesn’t demonstrate “progress” it forces the entrepreneur to think more critically about their business model story — which is still moving the idea forward.
The problem, of course, is that business plans take too long to write. More importantly, the people who make you write them, don’t take the requisite time to read them. So all your pretty fonts, charts, and excel wizardry go to waste.
The other problem is that the business plan is meant to be the master plan for your business. But because we don’t know what we don’t know at the earliest stages of an idea, the plan immediately starts off on the wrong foot. Nonetheless, if you still do manage to tell a believable story and secure enough resources to move forward, you are supposed to keep this plan updated. But we don’t.
In subsequent interactions with stakeholders, like quarterly board meetings, we employ a different set of heavy weight artifacts designed to show a compelling progress story. Like the business plan, these too consume lots of resources with questionable value.
Your stakeholder interactions are meant to hold your innovation (not you) accountable AND serve as a source for new idea generation. But these interactions are often poorly utilized because we don’t share the full progress story. We tend to only share good news and hide the bad news (for as long as we can). In the Lean Startup world, we call this “playing success theater”.
As a result we end up with two stories — the story we tell our stakeholders and the story we tell ourselves.
It is more important to build the right business model, than give the appearance of always being right.
There is a better way out of this dichotomy of two progress stories.
The 1-page Business Model: Lean Canvas
In my polls across thousands of entrepreneurs, I found that 2 out of every 100 entrepreneurs write business plans AND enjoy the process. Unless the others are forced into writing one, many of them opt for the no-plan (or just-do-it) alternative which isn’t any better.
While a just-do-it attitude is a fast way to get started, it falls prey to post rationalization.
Reasonably smart people can rationalize anything, but entrepreneurs are especially gifted at this.
This is where I draw a distinction between business plans and business planning. Business plans, while well-intended, fall short on realizing their true value for the reasons I outlined above. Business planning, on the other hand, is critical for fighting the Innovator Bias for the solution.
Like everything, planning needs to be time-boxed to avoid analysis paralysis. But the right kind of planning is time well spent. In recent years, the 1-page business model has stepped up to fill the bill. By embracing constraints of both space and time, the Lean Canvas fights analysis paralysis and forces action.
1. It is easier to communicate
Because the canvas needs to fit on a single page, you have to cut through needless fluff to communicate your business idea concisely. You put a 1-page Lean Canvas in front of anyone and they can’t help but read it and have an opinion. It is at the intersection of these conversations where real success lives.
2. It is quicker to create
Because creating one of these canvases takes ~20 minutes versus 2 months, it gets you outside the building faster. So you spend more time building versus planning to build your business.
3. It is possible to keep it up-to-date
The portability of the canvas makes it possible to treat it like a tactical plan — one that you update a lot more frequently. So you can tell the story of the evolution of your business from idea to scale using the same light-weight document.
The shaded areas mark the parts of the business model that have undergone changes. This allows you to visualize and deliver more effective progress updates by focusing on the deltas from one snapshot to the other.
The problem, of course, is that while the Lean Canvas helps you capture an idea on a single page, during the honey moon period of a new business idea, everything seems possible. A single big idea can easily fork into multiple variants targeted at different customer segments and different problems. I’ve seen entrepreneurs wrestle with squeezing these variations into a single canvas. The result is a 4 page long Lean Canvas which defeats the purpose.
The answer is creating multiple canvases per business model variant.
Lean Canvas as Swimlanes
Instead of trying to cram all your variants into a single canvas, embrace the 1-page limit and split your variations into multiple canvases. In my book, Running Lean, I describe the journey of going from idea to a plan that works as a search versus execution problem — one designed to avoid the local-maxima trap. We fall into this trap when we go to the other extreme and too narrowly focus on a single implementation of a business idea.
Creating a single broad or a single narrow Lean Canvas are equally bad.
The right approach is starting with a broad canvas (your best guess) but then splitting it into many narrow canvases that you pit against each other in your search for a business model that works.
With this view, I can tell you my business model “search” story. How I started with a big idea, considered different variants, and narrowed further from there.
But we can go even a step further.
The Business Model Progress Timeline
While the business model timeline view above allows you to share the evolution of your business model story, it doesn’t attribute any causality to the changes. Did you prematurely give up on one business model because you didn’t know how to test it or was it because you invalidated the business model?
Much as history is told as a string of “seemingly” causal events, we need to attempt to justify our business model evolution story as a string of seemingly causal validated learning events. By tying the business model changes to experiments we ran, we hold our decisions accountable to ourselves, our team, and stakeholders. This is key for breakthrough.
“A business should be run like an aquarium, where everybody can see what’s going on.”
- Jack Stack: The Great Game of Business
Take the Progress Timeline for a Spin
We have been busy the last few months turning this progress timeline view into reality as a feature in the online LeanStack tool. The progress timeline view automatically builds itself as a by-product of using the tool. No manual timeline grooming is required.
Whenever you create or update your Lean Canvases, Validation Plans, and Experiment Reports, an event artifact is recorded on the timeline. Clicking into any one of these event artifacts brings up the more detailed view so you aren’t caught off guard in your next board meeting or advisor update.
Signup for a new Lean Stack account to test-drive the progress timeline.
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If you already have an account, add the “Trial Code” TIMELINE to activate this feature.
P.S. We want to hear your feedback on if you find this feature useful and how we improve from here. Leave a comment below.
P.P.S. We are looking to hire a UX developer to help push the limits even further on the timeline visualization. If you are up for the challenge, drop me note.