The Strategy is Value Creation — Part 2: Minimum Viable Learning By Doing

In The Strategy is Value Creation — Part 1: Integrating Efforts Around Purpose we looked at how the purpose of Value Creation should inform organizational efforts. When facing uncertainty and complexity, it is useful to adopt iterative and incremental, probe-sense-respond approaches. Without going into specific labels that might lead us to think there are all-encompassing frameworks, we might call the essence of these approaches Minimum Viable Learning By Doing that can be informed by a variety of practices from frameworks.

Henrik Kniberg of the Swedish consultancy Crisp, who has worked with the likes of Spotify and Lego on Agile practices, is an awesome communicator of the approach. The benefit of working in an agile manner which focuses on small, increments that can be delivered in a week or the duration of a short sprint is that it reduces the risk related to the planning-heavy sense-analyse-respond approach. This is because priorities and directions can be changed and refined as learning happens.

Source: Henrik Kniberg/What is Agile?

When iterative and incremental learning is done in a manner that involves or engages customers development efforts are not just about doing things fast but doing the right things — meaning those that maximize and deliver value to the customer — fast.

Source: Henrik Kniberg/What is Agile?

Kniberg shares a very understandable picture of what this type of development process looks like. Instead of learning about Value Creation at the end of the process, “Minimum Viable Products” or what Kniberg uses instead, the “earliest testable/usable/lovable” prototypes, allow us to both develop at a small enough granularity but also create something that a customer can experience and use to give feedback.

Source: Henrik Kniberg/Making Sense of MVP

The problem with approaches such as Lean Startup and Agile is that they often start with the assumption that something should actually be built or coded before learning can begin. The more time and effort is used into building an “earliest testable/usable/lovable” prototype, the more waste is created. What you want to do is to create the best possible prototype that can support given learning objectives with the least plausible effort. The reason why this is done is because customer/users/stakeholders/beneficiaries can rarely completely define what they need in advance. This is where Service Design can be of assistance. Marc Stickdorn and Jacob Schneider, the authors of the Service Design Thinking book, elaborate on why making low fidelity prototypes using papers and pens, acting, Legos or whatever is at hand and useful, can generate and build effort/insight ratio that is far superior to actually building something.

Source: Marc Stickdorn & Jacob Schneider: Mobile Ethnography

Instead of the Build-Measure-Learn -cycle related to Lean Startup and Agile approaches, Service Design takes what we might call an Empathize-Prototype-Learn (see the following picture for additional details) which can be executed very fast.

Source: Nielsen Norman Group: Design Thinking 101

In my experience the downside of the traditional Double Diamond Service Design Process is that it is very heavy in terms of moving from emphasizing to building something that can be delivered. It should thus be complementary to Lean Startup and Agile to make the tie-in to actually building and delivering something that might be delivered or sold to customers.

In his book Value Proposition Design, co-author Alex Osterwalder, known for his work on the Business Model Canvas, proposes an Iterative Testing Process that can help validate customer needs, product fit and the overall business model.

Source: Alex Osterwalder: From Idea to Business with Lean Startup & the Progress Board
Source: Gymanst Scoring Radar Chart

The idea of the Iterative Testing Process to support Value Creation is to create a set of parameters of what is Valuable that are determined phenomenologically from the perspectives of beneficiaries.

You can think of it in terms of the Gymnast Scoring Radar Chart which determines the parameter by which each gymnast’s performance is evaluated by.

Focusing only on the Build-Measure-Learn -cycles of experimentation might lead to a fragmentation of the overall vision or goal of the developmental efforts. This is why we should tie in the experiments with models of our the overall vision, outcomes, goals, product, customer journey or whatever we are developing. Barry O’Reilly, co-author of the Lean Enterprise book, suggests using an interlinked model of models to visualize how the big picture and experiments might work together.

Source: Barry O’Reilly: Blow Up The Business Case

In terms of operationalizing Minimum Viable Learning by Doing that is coherent and works together with a general vision or direction Alex Osterwalder proposes the use of a Progress Board to see how development based on experimentation is going forward and where we are at a given time in terms of developing the overall vision. Whereas O’Reilly’s model shows us how efforts are linked in terms of the overall vision, the Progress Board can show us where we are at a given time.

Source: Alex Osterwalder: From Idea to Business with Lean Startup & the Progress Board

To sum up the main points of this post, it is possible to accelerate development by means of Minimum Viable Learning by Doing when we combine approaches from Service Design, Lean Startup and Agile. Service Design can help us determine a direction and overall vision for development but experimentation should be used to evaluate that direction while delivering prototypes that help us build and learn in terms of Value Creation.

The Strategy is Value Creation — Part 3: Organizing Around Value Creation will focus on examples of how to organize around the continuous improvement of Value Creation. Even though most examples of this are from IT companies, the mindset can be adapted to any organization with customers though it does require a difficult and major shift in understand Value Creation as the central tenet of an organizations purpose.

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