Business Agility For Speed To Market: Applying Design & Agile Thinking To Drive Consumer Value
“Plans fail because of what we have called ‘tunneling’: the neglect of sources of uncertainty outside the plan itself.” — Black Swan, Nassim Nicholas Taleb
“There is nothing so useless as doing efficiently that which should not be done at all.” — Peter Drucker
Lately, in every industry, there has been a trend of big players embarking on multi-year journeys to achieve grand visions. These initiatives are mainly focused on digital enablement of their technology footprints or complete overhaul, in some cases. While it is perfectly okay to have these grand visions, trying to achieve them using the traditional big bang approach is not feasible anymore considering the rapid market shifts due to new digital disruptors. That said, the foremost question posed by most executives, senior and front-line leaders today is: “how can we achieve our grand visions incrementally, in a nimble way, allowing ourselves to pivot along the journey based on market trends?” This question is pertinent not only from the standpoint of providing better customer experience, thereby driving greater customer satisfaction and retention, but also to remain relevant in an extremely competitive marketplace with new digital entrants trying to gain market share every day. While IT leaders are trying to solve this problem by uplift of tooling and technology, there is a definite, impending need for business leaders to change their mindset with regards to how they have been used to perceiving business value and tailoring operational processes as needed to consume technology capabilities delivered incrementally; of course with consideration for the most important question: “does the increment enable better customer outcome(s), potentially in conjunction with some legacy systemic and/or manual processes, until the full scope is delivered?”
Sounds pretty straightforward! As simple as it may sound, most business leaders today are faced with a dire challenge of identifying Minimum Viable Products (MVPs) that they can launch to their internal and/or external customers within ‘reasonable’ time intervals. The word ‘reasonable’ here is highly relevant and relative based on the organizations’ context. Historically this context was mainly about: “who are my competitors and how are they doing with regards to speed-to-market?” Simply put, the yardstick for speed-to-market was always with respect how those competitors with ‘like’ business models were performing, until the advent of the digital revolution. In this digital age, everyone with digital capabilities is competing for market share in industries where they were never a player before. For example, recently a retail giant, with their digital and supply chain capabilities started competing in the retail and mail order pharmacy space. To better position themselves they acquired a pharmacy startup with digital technology enabled smart capabilities around drug packaging and movement. There has always been a tendency to underestimate those digital entrants that are trying to disrupt the industry, not only with new technology but also with new and revolutionary business models. It is noteworthy that while some of these digital entrants are new technology companies, some others are established companies from other industries with advanced and proven digital capabilities. Think about how Uber disrupted the taxi industry and how Airbnb captured market share of the hospitality industry, not only with new technologies but also with business models that were traditionally not used to take the product/service to customers (multi-sided-platform-as-a-service, in this case). Think about how the advent of smart phones quickly put the companies that weren’t positioned to adapt and diversify in time, out of business or caused them to be acquired (See this)! Therefore, it is highly important that we understand the basic theme of most digital disruptors; it is to satisfy the unmet and unexpressed needs of the customers. It is also important to understand the nature of disruption itself; it is highly unpredictable until it happens. That said, how can we prevent or avoid something that is unknown? We can’t! However, we can position ourselves to adapt in time, so we do not lose our competitive advantage or rather proactively protect it.
Of course, there is great amount of thought put into business agility, and it has been evident at a strategic level with the changing landscapes in every industry. The health care industry, for instance is moving towards patient outcome driven, value based care model through vertical integration, disintermediation efforts and strategic acquisitions. While that is a great step forward, the core theme of the methods being adopted is largely inside-the-box or within the traditional constructs and helpful in protecting market share in the short term. However, as I alluded to earlier, disruption by digital entrants is mostly outside-the-box and the major effects are introduction of new competing business models and loss of market share at a magnitude dependent on the value proposition. What makes this potential risk worse are the large MVPs slated for launch years out from inception. Why are they risky? The more traction that the disruptors gain, the more likely it is for them to establish a new normal for everyone to compete against; the effect being the grand visions we set out to achieve 1 or 2 or 3 years prior may not be relevant anymore!
“How do we select our MVPs to be not-so-large that by the time we implement them, they become mostly irrelevant?”, “How do we make sure that our MVPs are truly ‘minimally’ viable?” These are classic questions that most product and marketing leaders are faced with. Trying to address these questions in landscapes where digital entrants are either in the horizon or already competing with you, requires a mindset shift from “when do I get the whole thing?” to “when do I get to see a small, yet ‘valuable’ use case work?”. This change in mindset can start with adoption of continuous innovation & value selection, decomposition, prioritization, continuous flow and delivery. I am going to dive into each of these areas in the sections to follow…
Innovation & Value Selection:
Innovation is often misunderstood as mere ideation. Most companies don’t struggle with ideation. With the collective brain power of extremely smart people, there is abundance of ideation. What most companies struggle with is converting ideas into value propositions and taking them to market, in other words, innovation in their go-to-market products or customer offerings. Also, innovation is not always getting the biggest idea out of the door. It could be a process of tactical ‘tinkering’ — i.e., continuous process of identifying problems and solving for them at an operational and delivery level (this is a process that I believe product companies like Apple have mastered). It boils down to how enabled we are to listen and watch our customers, understand their behaviors, thereby their innate, unexpressed needs and satisfy them. One way to enable ourselves to do this is to leverage modern technology for big data and machine learning. However, technology is only as good as we use it to be and what we make out of the insights it provides. More importantly, there needs to be a culture of experimentation, based on the insights we derive, to provide better experiences to internal and external customers. This also solves for the problem of narrowing down on viable solutions from innumerable ideas. A lot of organizations have started embracing the Lean start-up mindset and instilling the structural elements that aid agility and speed. While this is a great start, there is much work to be done further to this, because it is not as simple as saying — “From next Monday we will be agile and innovative!” Rather, it involves deliberate effort and diligence around providing the right tools, creating the right environment for the teams, enabling them to step out of their routine operational boundaries and think about solutions from a customer experience point of view. In other words, it does not help to myopically apply frameworks like “design sprint” and “design thinking” to our current operational context or customer journey. It also does not help to apply them under the constraints of the current context. We need to start thinking about re-inventing our customer journeys little by little by eliminating processes and constraints that no longer make sense. (Note: This article, in itself, does not detail processes/frameworks like design sprint or concept sprint and design thinking. It is a perspective on how to apply them, or rather how not to apply them, more specifically speaking)
The design sprint process, if applied correctly, provides teams the right environment to run quick cycles of understanding and framing problems, conceptualizing new customer experiences and journeys to solve them, refining and aligning on the best ones, building rapid prototypes, testing and validating them. It also allows us to narrow down on potential workable solutions from ideas. This is great! But business agility extends further beyond this point. One thing to remember is that ‘agility’ is allowing ourselves the ability to pivot; it is not just about running scrums, scrum of scrums, release trains, adopting other structural elements and losing sight of the underlying purpose. In my last article on outcome focused feature definition, I have provided a detailed point of view on how high level business goals can be decomposed into feature goals that allow for incremental value delivery by products across the value chain and rapid integration between them, thereby generating rapid customer value. The most common pitfall around this aspect is to iterate on activities within individual products and wonder why there is no value created for the customers. The key takeaway is that, short feedback loop can prove its real use when based on the point where actual customer value is created. If the customer value is created at the end of the value chain, there is little use in having product specific feature goals and iterating on them. We need to start thinking about iterating on customer outcomes and look at how they can be minimally achieved and incrementally enhanced through our features. The stories in the individual product teams’ backlogs (especially in ecosystems with complex value chains where no individual product alone can deliver customer value) should aim at delivering those common feature goals across products that create positive outcomes for internal and end customers. This way of decomposition of the selected value makes sure that business is requesting no more than a true “minimum viable product” from their technology partners. At the end of the day, what we feed the machine is what gets processed and delivered, if you will!
Continuous Flow & Delivery:
So far we have talked about optimizing work decomposition and point of arrival. While that enables granulating value to be incrementally deliverable, allows scope for agility and continuous flow of work across the delivery pipeline, there needs to be a great amount of thought and due diligence put into prioritization of the work defined to deliver the desired customer outcome we set out to achieve, in the most minimal way. Simply put, if A through Z are user stories that form features to achieve a desired customer journey, there needs to be diligence around which of them are “must have”, “should have”, “could have” and “nice to have” to deliver the features minimally and which features are truly needed to achieve the journey minimally. There also needs to be constant alignment against the business goals in terms of which of the aforesaid meet them and the remaining can be de-prioritized. If delivering the “must have” stories provides the customer journey we set out to achieve and meets the key performance indicators (KPIs) of the business, why boil the ocean and deliver everything under the sky? Most importantly the product owners need to be trained around this art of prioritization and empowered to say the word — “No!” — to what’s truly not needed to achieve the goals or KPIs*. Additionally, there needs to be diligence around making the Kanban/Scrum boards reflective of the delivery value-streams and identifying appropriate “drum”, “buffer” and “rope” in them (Ref: Lean concepts for additional insights). This will enable the scrum teams to walk their boards on a daily basis, identify bottlenecks, and tactically plan the day’s work during the daily scrums, while attacking the bottlenecks and keeping the value delivery process a smooth flowing pipeline. The most common pitfall at a Scrum team level is that Scrum Masters often ask individuals of their teams what they have accomplished, what they are planning to do for the day and what their impediments are. These are not questions to be asked at an individual level. These are questions to be asked of the whole team looking at the flow of work on the Kanban/Scrum boards from right to left. We need to ask ourselves questions like — “What did we test yesterday? Does that form ‘value’? Can we release it?”, “What do we have in test, what can we move forward?”, “What do we have ready for development that we can move forward”, rinse and repeat right to left to enable smooth flow. Doing this requires a shift in management culture from focus on global over local optimization. Remember, if your goal is delivering value to your customers, you want to globally optimize value delivery, not locally optimize individual productivity!
*This is a great video on agile product management that talks about most of what I have mentioned above and more.
The bottom line is that we are in a digital age where making grand long term plans and tunneling towards our goals based on them no longer makes sense. In times when digital technology is the biggest enabler of conducting business, we have to assume that every player with advanced digital capabilities and practices is a competitor. Borders between industries are traditional constructs that are slowly disappearing because of the ease for vertical integration that digital platforms are providing. Let’s be cautious of that and truly embrace a culture focused on rapidly generating customer value that will help us compete!
As always, thoughts and criticisms are more than welcome. Please take time to leave a comment!
Disclaimer: Thoughts expressed here are my own, based on my experience and do not represent the interests of any organizations to who I am or have been associated.