What is Lean Methodology and why is it so important for innovation in large organisations today?
What defines a startup?
In his book The Lean Startup, Eric Ries defines it as:
“A human institution designed to deliver a new product or service under conditions of extreme uncertainty.”
This definition doesn’t specify what is meant by ‘human institution’, the number of people, the resources available or the corporate status. A startup can be anything from a single programmer in their bedroom to a team of engineers building a rocket.
The concept of the Lean Startup takes the essentials of entrepreneurial culture and refines them. The backbone of this methodology is simple — the Lean Startup isn’t about being cheap, it is about being less wasteful while still doing big things.
General Electric champions the Lean Startup methodology under its FastWorks project that has seen them already launch more than 100 projects from disruptive healthcare to gas turbines. Even in government, the Lean Methodology found its place as Eric Ries became a regular guest at the White House when the Chief Technology Officer became a vocal supporter of the Lean Startup principles as applied to political process.
Reducing uncertainty
Any new idea comes with uncertainty. To resolve this, startups identify assumptions that can be rapidly tested and iterated. The issue with a traditional process is the long period of research and development. It results in a protracted development phase and if even one of the most basic demands or feature assumptions are invalidated, then the time and money invested into the project are wasted.
As the Fourth Industrial Revolution brings constant, endless change, the initial assumptions around an idea rarely remain valid throughout a lengthy production process. This is where the Lean Methodology steps in. It is faster, cheaper and delivers results that are far more secure.
How does it work?
The Lean Methodology uses a dynamic approach to validate assumptions quickly in a series of iterative loops.
Build a cheap, simple product that will either validate or invalidate your assumption. This is the Minimum Viable Product (MVP). Measure the response to validate or disprove assumptions, answer open questions and reduce uncertainty. Learn from them, draw up new assumptions. Repeat.
This process is suited to innovative products or services where we introduce a solution to a problem rather than attempting to replace a pre-existing solution. You can’t ask a customer what they want — they don’t know what they want. This is why user testing is so important. It allows you to gain essential insights that will help you refine your process and thinking.
This is why finding problems is critical to success.
MVPs
An MVP (Minimum Viable Product) is your assumption testing and uncertainty reducing tool. A great example of a company that did this is Zappos. They were one of the first online shoe stores and, at the time, the idea they had was pretty far-fetched. To test the idea cheaply, they had a solution that consisted of a basic web page with photographs taken of shoes from shops in Palo Alto. If people wanted to buy them, they ran to the shop, bought the shoes and sent them to the customer. It proved that this service was something customers wanted.
A traditional model would have seen Zappos build a functioning interactive site, rent a warehouse, fill it with shoes and wait for customers to come.
Pivoting
You need to be prepared for the reality that your idea, strategy and vision will pivot at some point. ‘Pivoting’ is a buzz word for a good reason. The Lean Methodology accepts that change is an essential part of innovation. There is an element of embracing failure when your startup pivots as this means you are learning and responding to new data, information or trends.
Lean Methodology accommodates a dynamic and iterative process and feeds those who are hungry to learn. Many of the greatest entrepreneurs got where they are because they used the Lean Methodology, celebrated the small wins and paid attention to each step that took them to the final goal.
At Pollen8 the Lean Methodology has allowed us to work on ideas that span anything from social enterprise businesses to hybrid electric planes and machine-learning solutions. We can ideate, produce and test rapidly and cost-effectively. It allows us to do what we do best; empower experts in their field to innovate and work on ideas they care about.
