“The Lean Startup” — for nonprofits too!

I’m most of the way through Eric Reis’ 2011 book, “The Lean Startup.”  As the title suggests, it’s attempt to apply “lean” management thinking (as developed at Toyota and popularized by a thousand books and consultants) to entrepreneurial startups.  But what really grapped me by the proverbial lapels was how directly most of his ideas apply to nonprofits.  After all, Reis’ core definition of an entrepreneur is someone who has to manage under conditions of extreme uncertainty–or, as Ronald Heifetz might put it, people who face adaptive challenges.

Reis’ solution is that leaders have to design their organizations so they can hypothesize, build, measure and learn in iterative cycles, as fast as possible.  Central to this is the idea of “validated learning” — using data to confirm or falsify specific hypotheses about each element of the experiment.  There’s some great discussion of how to approach experiment design and how to avoid “vanity metrics” (list size, anyone?) in favor of measurements that actually correspond to success.

I love, love, love the idea that social change organizations need to think of themselves as learning machines, where the objective is to do learning experiments as fast as possible, backed by rigorous data.  (Bonus: imagine if philanthropy worked this way!)

This perfectly corresponds with much of what I’ve been thinking and writing about lately.  I can’t wait to have the opportunity to chat about it with 100 of my smartest colleagues at Web of Change.

5 thoughts on ““The Lean Startup” — for nonprofits too!”

  1. Gee. This almost sounds as if you think non-profits should be managed like businesses. Can this be?

  2. I find it interesting that some “business” thinkers are now speaking the language of learning, collaboration and experimentation–values that I think have always been core to the nonprofit sector.

  3. Well, now that we have a B corp structure available here in WA courtesy of my local state rep Jamie Pedersen, and since the IRS clarified their program-related investment rules for grantors earlier this summer we now, in theory, have No More Non-Profit Excuses, huh?

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