Prioritizing long range thinking over the challenges we face today is always hard. You may be familiar with tools, experts, and even entire industries dedicated to helping us with long range financial planning or building healthy eating habits. So why does it seem like long range business innovation strategy is a guessing game at best, or at it’s worst pushed to the back burner or forgotten entirely.
Of course there is already a massive movement in startups around the world using lean innovation tools, business model design, and customer development to fine tune their short term innovation strategy. The momentum is accelerating thanks to the efforts of Eric Ries, Steve Blank, Clayton Christensen, Alexander Osterwalder, Ash Maurya, and many more.
Giff Constable, Jeff Gothelf, and Cindy Alvarez are among a few experts with their focus on helping teams at large businesses innovate like startups. Eric Ries has also acknowledged that the next frontier for the Lean movement is big business (and government) in his new Leader’s Guide project. And let’s not forget that corporations have long benefited from relationships with innovative consulting businesses like IDEO, Frog, Doblin, Smart, and Fjord who practice and teach Design Thinking methods.
As an aside, if any of the names I mentioned above aren't familiar to you, you owe it to yourself and your business to follow them on twitter or Medium and read everything they have written.
So even with all of this fire power, sustainable innovation strategy at established businesses, large and small, seems a long ways off. Steve Blank has really highlighted the reality of this gap in a few recents writings.
I've spent this year working with corporations and government agencies that are adopting and adapting Lean Methodologies. The biggest surprise for me was getting schooled on how extremely difficult it is to be an innovator inside a company of executors. -Steve Blank
In the shadow of all of this great thinking I don't have a lot to add, except to give you the perspective of how I have tried to make sense of it all, and how I've tried to put it into practice as a single engineer and product designer trying to influence the innovation strategy of a large global product manufacturer. I haven’t come across anyone trying to tie all of these concepts together in a simple way, so hopefully this helps you as much as it has me.
The Innovation Process
As of today, this is the best way I've been able to summarize how everything I mentioned above informs my approach to innovation. In some later posts I’ll dive deeper, but for now I’ll cover the highlights.
This first phase is what Cindy Alvarez would call Customer Development, or practicing design thinkers would call Understand and Observe. The bottom line is to pinpoint WHY someone needs your help. Why a user does what they do. Why existing solutions don’t work or aren’t available. Why they are frustrated. Why a new solution should exist and why you should create it. And of course why they would pay for it. Five Why’s? How about seven.
Going a little deeper… I like to think about the WHY having two parts, the need and the context. The need is what you solve, but the context changes your solution. A while ago I wrote about looking for new ideas by building a scene and I think it’s still a great model to follow. A story is defined by the character, their background, their struggle, and the setting. Discovering why is just about building your story.
I’ll be writing more on this topic in the future, but for now here is some other reading…
- Read Cindy Alvarez’s book Lean Customer Development or participate in one of her workshops.
- Read anything by Dez Traynor, co-founder of Intercom.io. These are good examples on this topic: article 1, article 2, article 3.
- Read Talking to Humans by Giff Constable, CEO of Neo.
This next stage is where you separate your ideas about the story from the real story. So much has been written about the build-measure-learn loop and Lean Startup, so I probably don’t need to explain much. The concept is simple; test the riskiest assumptions about your story by making a quick prototype of your solution and seeing if it works for your customer. What you prototype depends on the trickiest question, or your biggest fear (admit it, you have them).
In practice, the build-measure-learn loop is where it is the easiest to get distracted. Maybe you didn’t discover the underlying customer problem as well as you should have and find yourself confused by the response to your solution. Or other common problem is wavering on the quality of your prototype. If you are like me, you might go too far before showing it, or maybe you get discouraged when your customers aren’t responding to your simple mock-up because it doesn’t actually represent anything valuable. Then there’s the even bigger question of what and how to measure.
Some ways you might limit the distraction…
- Use an experiment map or tracking tool like Moves the Needles’ version or Lean Startup Machine’s version. But I just like to make a similar version using post it notes on a wall. Make it big so you and others can see it all the time.
- Use Giff Constable’s Assumptions Exercise to test yours.
- Set a release calendar that forces action.
- Establish or change your KPI’s to reflect outcomes of the build-measure-learn loop. Like number of prototypes shown to customers or number of experiments run.
Increasing Customer Value
What I am trying to capture with the spiral shape of the build-measure-learn loop is that each time you run it you should be trying to find more and more customer value. The loop should radiate outwards. If you keep running tests but aren’t increasing how much your customer values the solution, then you aren’t moving anywhere.
How you measure value is up to you and your experiments, and because of this it is an area I’ve struggled with. What ultimately determines the value of clicking a link, or giving up an email address, or spending some time, or changing a routine, or making a recommendation, or paying money? You will have to decide that scale within the constraints of your project.
More on the topic…
- I first began thinking about customer value at the 2014 Lean Startup Conference after attending a workshop by David Binetti. He is also developing the Innovation Options Framework that is trying to attach financial metrics to the discovery of customer value.
This is the hard part, the part that seems to be the biggest gap. Asking when a solution is ready to “graduate” into production at a corporation, is only made harder when asking who should be working on it in the first place.
The Model suggests there are three types of work that need to be done concurrently; core business, the business of now; emerging business, the business of growth; and new business, the business of the future. For my purposes I like to think about these horizons in reverse. Future business is what most think of when they hear the word disruptive, and by proxy innovative. But of course we all know that innovations can and should exist in all three phases.
So whose job is it to innovate or disrupt? Can disruption come from outside the “traditional” product department, like business model disruption from marketing, sales, ops, or finance? Should secret labs exist isolated from the core, or would that cause a vacuum of creative free thinking? And should ideas really “graduate” or should they just continue to grow on the path they’re on and supported by the teams who create them?
I am planning to explore some thoughts on these questions in future posts, but for some more reading by the real experts check out…
I will try to continue updating this story with relevant links so it can be a better resource. I hope it helps! Let me know what you think, I’d love to hear from all of you other corporate innovators -@jonalling