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How to Think Like a Founder - From Process Excellence to Lean Innovation

Contributor: Andrea Charles
Posted: 01/11/2017
Andrea Charles
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Suneel Gupta

A PEX Network Exclusive Interview with Suneel Gupta, Founder and CEO, Rise, Former VP of Product Development, Groupon, Visionary Product and Innovation Leader

Suneel was named the “New Face of Innovation” by the New York Stock Exchange. While serving as VP of Product Development at Groupon, he helped grow the business from millions to billions in revenue, and into what Forbes Magazine named the “fastest growing company of all time”.

As the Founder and CEO of Rise, he raised funding from Google Ventures and was backed by senior leaders at Facebook, Uber and AirBnB. Just two years after launch, One Medical acquired Rise for nearly $20 million dollars.

Ahead of his Keynote presentation at OPEX Week 2017, Andrea Charles, Senior Editor at the PEX Network caught up with the Big Ideas Speaker Suneel Gupta, to discuss how to take the leap from traditional process improvement to lean innovation. From changing mindsets, leveraging operational excellence on an enterprise-wide scale and choosing the right metrics, Suneel shares his insights on how to think like a founder. 

How can we blend together the idea of traditional process improvement, with exciting innovation?

I grew up in Detroit, Michigan. Both my parents were engineers at Ford Motor Company and I remember as a kid going to the Auto Show and watching them unveil new concepts.

It was a very interesting thing for me, because designers and engineers worked behind the scenes for months if not years on these concepts - and the first time that they ever really got feedback on the concept was when the curtains lifted at the Auto Show. That’s the way things worked back then. You would go behind the stage and then unveil the curtain when ready.

Things are much different now. We’re able to get feedback on a product concept much, much earlier. That’s a big benefit for companies both big and small. One thing that I’m noticing is that big companies sometimes have a tough time taking advantage of that benefit because I think that sometimes they are stuck very much in the mentality of making a big splash instead of validating assumptions along the way.

What we really work on with our clients and my students, is how do you actually start to get feedback earlier in the process?  We work through a framework that challenges us to think about product development in a loop instead of a linear line.

And then taking what you’re learning and bringing it back into your idea. I know that sounds simple, but it’s amazing how many traps and pitfalls there are along the way.  When we think about lean innovation it’s really important to bring those traps and pitfalls to the forefront and talk about how to have the right mindset as an organization to get through those traps.

If you are using real time data and feedback loops vast amounts of data are being generated, how do you help companies to choose the right metrics for them to focus on?

That’s a really good question. Being clear about what metrics matter most is sometimes the hardest decision that a company needs to face. What makes it even harder is sometimes this idea of trying to launch and measure the fully scoped product at once.  My mentor, Reid Hoffman, who is the founder of LinkedIn once told me that if “you’re not embarrassed by the first version of your product then you have launched too late”. That is something that has stuck with me.

Often when we think about a product vision there are lots of aspects of that vision, there are lots of features involved and I think the critical thing is actually to figure out the scope that you want to cut in that vision for your version one.  You may not be entirely proud or it may not capture your entire vision to start with a scoped down version of that vision, but if you scope it down, you are now able to hone in a lot more on what is it that you’re trying to learn from this version one. 

If you are able to validate the metrics you can now start to expand version two and version three by expanding the scope a bit more. I think that there is no easy answer to figuring out exactly what metrics you want to focus on again. I think it’s a prioritisation decision focusing on what you think is most important to validate that this idea is right.

I think you can make it much easier on yourself as a company, as a team by focusing on cutting scope and not cutting quality.

How are you inspiring companies to take that leap from Lean Six Sigma approach towards process innovation?

Process excellence, as we used to think about it, was about making the execution of an idea as operationally effective and as smooth as possible. The challenge is that you might find yourself in a state of local maximum, where you have very elegantly and smoothly been able to push a boulder up a sub-optimal hill. You finally get up to the top, look around and realize that you are surrounded by mountains; mountains that you would much rather climb because the payoff is much, much higher.

That is sort of the situation that I think we often find ourselves in.  We are so intently focused on making existing processes more efficient is that sometimes we miss the bigger opportunities that are around us. Getting around that and starting to shift mindset involves a couple of things. One is constant ideation in addition to continuing to crank out, existing core products and making that more efficient; spending real time ideating on new business ideas, alternatives to your existing business, but more important than that is finding lightweight ways to test that.

The reality for most businesses is that they can’t just decide to abandon their core business line and now start to focus on just these new innovative ideas. They still have a business to run and that’s a real constraint.  Getting up in front of an audience of people and telling them hey you’ve got to focus on innovation you’re telling everybody what they already know.  The trick of it is how do you take a certain percentage of your time, most likely somewhere around 20%, and start to highly effectively come up with different ideas, and test those effectively enough to know whether they’re actually going to be the mountain instead of the hill.

As a former VP of Product at Groupon, you have lots of experience in creating that “wow factor” in something new. What does it take for a company to make a breakthrough?

The most important thing is to be open to the idea that the way you are doing things right now may not be the best way, and that the launch is just the beginning.  Before I got into technology I was spending a lot of time working in film and television and the biggest difference between film and television is that for film the launch of the actual product is the end, while in television, the launch is just the start.

In television, you release the pilot and pay attention to how the audience reacts. What’s working, what’s not working and being open to the idea of shifting the plot, shifting the characters along the way. In order to have breakthrough ideas organizations need to have a television mentality, they can’t have a film mentality. I think one of the things we did well at Groupon, is that even though Forbes Magazine had called us the fastest growing company of all time, we were intently focused on figuring out what’s next.

We never believed that Daily Deals were the tallest mountain; there has got to be a bigger mountain out there, and we want to figure out what it is before everybody else does. Once an organization is able to run and optimize its core business, it also needs to be spends real time focused on figuring out where the taller mountains are, that’s when you can have breakthroughs as an organization.

How are companies leveraging operational excellence as a platform for both innovation and transformation on an enterprise-wide scale?

It is possible to leverage operational excellence in your core business to spin through the innovation loop more quickly, and that could become a huge advantage. General Electric is a good example of this; highly operationally efficient, and they’ve been able to use that process excellence to test & measure ideas quickly which means they are able to go from the concept to data to decision faster than most other large organizations.

Companies that pride themselves on operational efficiency can sometimes fall into a trap. They can become too entrenched on optimizing their core business, whereas other businesses use this excellence as a competency for innovation.

What do you hope to achieve with your keynote presentation at OPEX Week?

I’m hoping to give the members of the audience immediately in their work and life.  If I haven’t given the audience tools and techniques that they can actually use on a very tactical level then I haven’t done my job. It’s one thing to say that innovation is important, but it’s a very different thing to show you HOW to be more innovative. That is my goal.

Don’t miss Suneel’s Presentation How to Think Like a Founder at OPEX Week 2017

To find out more, download the agenda today: https://www.opexweek.com/agenda-download

 


Thank you, for your interest in, How to Think Like a Founder - From Process Excellence to Lean Innovation.
Andrea Charles
Contributor: Andrea Charles