The ING Direct way of working — Part 2 : The stages of PACE
In the first post of this series I’ve described how we organise our teams. Check it out if you haven’t done yet.
In this post I’ll go through the stages of PACE
PACE is how we named our way of working. It combines Design Thinking, Lean Startup and Agile methods into an approach tailored to ING’s needs.
PACE compels us to validate problems and solutions with our customers continuously to increase our chances meeting their needs.
PACE encourages rapid launch of new products and services developed by small, autonomous and cross disciplinary teams.
Killing non viable ideas quickly is also another crucial facet of PACE.
How does PACE work?
People and Organisation
More important than any methodology, process or approach is the composition of the teams and the degree to which its members are empowered to act.
I have described how we organise our teams in part 1 of this series.
PACE phases
PACE is made up of 5 phases.
Discover
So…you have a challenge. This phase is about putting that challenge into context.
Scanning the broader environment to identify the opportunities, threats and constraints that will shape your vision for how to approach the challenge.
Looking at trends in consumer behavior and markets, technology developments, regulation, competitors and what’s happening internally in order to uncover the potential customer opportunity.
Key outcomes
Prioritised list of potential opportunities, threats, solutions, promising customer segment(s), business models
Prioritised list of the riskiest hypothesis to be validate in next phase:
- Customer — Value hypothesis / what people desire?
- Business — Growth hypothesis / what is financially Viable?
- Technology / Organisation — Tech/Org hypothesis / What is technologically / organisationally feasible?
Problem Fit
The objective of this phase is to define what is the problem that is worth solving and for whom we are solving it.
Many initiatives fail not because they don’t work, but because they solve problems that either don’t exist or are not important.
By determining how significant the problem is to your chosen customer you also validate whether or not the initiative represents a business opportunity.
In this phase you build and test prototypes to help validate your hypotheses and define requirements for building a Minimum Viable Product (MVP) in next phase.
Prototypes are created as quickly and with as little investment as possible as they are typically discarded after each test is complete.
Key outcomes:
- Validated Customer problem
- Customer: “I have this problem and would like it to be solved”
Solution Fit
The aim of this phase is to define the solution that best solves the customer problem.
Through experimentation, you design and validate various features of your solution, iterating toward the solution most favoured by your customer. This helps you decide the MVP to build, offer and test with customers.
Key outcomes:
- Validated solution (offer and value)
- Customer: “I want this solution, where can I buy it?”
Market Fit
During this phase you build and launch the actual product and associated services.
This allows you to validate the business model of your initiative in an actual market and ascertain the commercial potential for your initiative based on the size of the customer segment(s).
This is typically the most difficult and uncertain of the PACE phases: you are simultaneously iterating your solution and searching for a repeatable and scalable business model.
Key outcomes:
- Validated MVP and market
- Customer: “I repeatedly use and recommend this solution to others”
Scaling
In this phase you determine the fastest, most efficient way to penetrate the validated market in order to commercialise your product or service.
Key outcomes:
- Implemented product and validated growth
- ING: “I have a profitable, scalable business model and continuously optimise conversion rates”
Experiment Loop
Within each phase, experiment loops are run continuously to test the assumptions that need to be correct for your idea to succeed.
We’ve been applying PACE in every initiative we are working on. Some initiatives with more success some with less.
We are also trying to apply those concepts to improve the way we work and this has been eye opening to us. In essence, applying PACE to improve PACE. Topic for a different post.
Have you implemented something similar, or completely different? I would love to hear your story.
I’ve started a new publication about The Future of Work. A newsletter for people who want to change the Future of Work. Makers (aspiring entrepreneurs, creators, bootstrappers, Indie Hackers…) looking for inspiration to help create more fulfilling, humane and equitable futures.
That’s it for now! Get in touch on Twitter (@leandropinter) if you have any stories, feedback, or insights to share.
Here are some articles I’ve published:
Making work more humane, fulfilling and equitable
The Maker Movement
