Dear Program Managers and Contracting Officers,
You have probably
heard that the Lean Methodology is sweeping the high technology industry and
are now being taught at major business schools. Here is a whirlwind survey of the concepts,
and more important, the mindset that the Lean method requires.
LEAN
The federal acquisitions system is obsolete for the
information age, and the military
in particular has an imperative to change.
RFPs in the future will be a bit more general about the capability goals
needed by a system. In evaluating a
vendor charged with a new technology, the key
is that there is a robust, iterative learning process in the company. Prototypes are tested, results are studied
with rigorous quantitative analysis, and then adaptations are integrated into
the new prototypes.
Proposals with cutting edge technology will have less detailed
plans and milestones than established goods and services. Product development will have a more
scientific approach, with designs and features being tested constantly with
customers, or control groups standing in for customers. Feedback is then analyzed to determine things
like if certain features fit the government’s needs, interfere with other
government systems, and are profitable for the company etc.
PROGRAM EVALUATION
As Program Managers, instead of focusing on hitting
milestones at cost, on time, and up to par, the focus is on whether lessons of
old iterations are being learned and adapted to. It is a company that knows
how to maximize its adaptability that ought to be awarded high technology
contracts.
As for the business, once the product is designed, then the
business model can be designed. That is how a venture capitalist would determine viability.
CAUTIONS & JARGON
The Federal Acquisition Regulation (FAR) guides Contracting
Officers to pick well run brick and mortar companies, of all sizes. Generally, a
vendor with good past performance and solid financials is a sign of a good bet
to award a federal contract. To a
Silicon Valley businessperson however, a well managed company is a perfect candidate
for being disrupted by an innovation.
Thus, the type of futuristic product that the government should want, is
often not what the FAR guides you to.
Another thing to beware of is that the culture of high tech
is to bring everything in-house and vertically integrate. That flies in the face of the government’s
process oriented way both at the political level and the bureaucratic level.
This will cause problems in meeting subcontracting goals.
MVP- a minimum viable product is produced after many
prototypes’ features have been tested.
It minimally meets the customer’s needs.
The MVP is the new Milestone B, if you will.
Pivot- a “pivot”
is to San Francisco what a change order is to Washington. It simply means taking lessons learned from
prior iterations of the products, changing the assumptions, and moving the
design in a new direction.
