Lean by Design

If you work in a large organization, chances are that you spend a ton of your time in meetings with other talented type A’s. After spending the first ten minutes of every meeting trying to figure out how to make Webex work, you finally get to the task at hand — making important decisions. When structured well, meetings can be very effective at driving alignment and action in corporate environments. However, we all know there are many flaws with meetings — the most dangerous of which, I believe, is making assumptions about how your customers behave in the real world. It is easy to myopically, and not to mention wishfully, believe that your customers will behave in ways that would make your solution the perfect one for them. Unfortunately, the real world is more complex and less convenient than we’d like it to be.

At Intuit, we face that tension everyday as we strive to innovate in the financial services space. At first glance, finances are very rational — after all, it’s all about numbers. But it really isn’t. People have all types of rationally irrational behaviors that make managing money one of the most complex human behaviors to design for. For instance, in the meeting room we might assume that people will use a budgeting app to manage their credit card purchases, but reality is a little messier. While conducting ethnographic research, our teams met people who froze their credit cards as a way of controlling their impulse purchases — they used the thawing time as a buffer to evaluate the expense. Although this is an example of an extreme behavior, it speaks volume about the emotional side of managing finances.

Not the actual customer credit card. Stock photo used to illustrate story.

People are complex. We need to take a human-centered approach to innovation — an approach that puts the customer at the center. In recent years, we have seen the rise of two powerful human-centered approaches to innovation — Design Thinking and the Lean StartUp methodology. Although both approaches are very similar in spirit, the nuances matter, making them challenging for organizations to reconcile.

At Intuit, we have spent a significant amount of energy building Design Thinking capabilities across the organization with Design for Delight, our interpretation of Design Thinking through three core principles — deep customer empathy, go broad to go narrow and rapid experiments with customers. For ‘deep customer empathy’, we created opportunities for employees to get closer to the people we are here to serve. For ‘go broad to go narrow’, we introduced the power of brainstorming, prototyping and narrowing to fuel a more iterative process. However, when it came to ‘rapid experiments with customers’, we found that only using prototypes or surveys to gather qualitative feedback from customers did not provide the appropriate rigor needed to evaluate future market performance — we have repeatidly learned that what customers tell you in a focus group is often different from how they actually behave in the real world.

When combined, Design Thinking and the Lean Startup can provide a powerful one-two punch that helps organizations accelerate intentional learning and action. The following principles capture some of the learnings we’ve had at Intuit over the past few years of scaling these capabilities to an organization of 8,000 employees.

No vision, no pivot

As a coach, I’ve observed a common issue across my interactions with employees and entrepreneurs — teams tend to fall in love with the solution, not the problem. Teams become too attached to the first idea they come up with and see it as their job to make that idea work, no matter what. In the absence of a greater customer-backed vision, teams struggle to embrace surprises along the way. To accelerate learning, teams must be willing to kill ideas and pivot when they learn that the idea will not deliver the customer benefit they had originally hoped for. Ideas are cheap and they should be treated as such. Leaders need to structure teams around visions that are rich for exploration and experimentation. Without the explicit permission to pivot, teams might spend most of their time refining an idea that has little merit.

Beware of optimizing bad decisions

When teams fall in love with their solutions, lean experimentation becomes a crutch. I have seen too many teams become myopic and forget about the bigger vision. If you find yourself in a place where you are using A/B testing early in the discovery process, take a step back from the dashboard and spend time with your team to clearly articulate your learning plan. What are you trying to learn? What are the assumptions you are trying to validate (or invalidate). I remember being in a meeting where a team shared their A/B test results. Design A yielded a 0.59% conversion rate, whereas design B yielded a 0.61% conversion rate. Based on these results, the team suggested with confidence that we should move forward with design B. Our response as a coaching staff was, “congratulations, you just picked the less crappy option out of the two crappy options on the table”. Although A/B tests provide quick tangible data on your idea, they often create a false sense of progress and confidence. As leaders, we need to remind teams that experimentation should be used to learn, not only to validate, especially in the early stages of discovery.

Scrappy does not mean crappy

Both Design Thinking and the Lean StartUp promote a scrappy and fast-paced approach to learning. In Design Thinking, we often use low-resolution prototypes to quickly test and learn —a mindset often referred to as “build to think”. In the Lean StartUp methodology, we use a Minimum Viable Product (MVP) to quickly run behavioral experiments. Unfortunately, the concept of an MVP is not always well understood and can sometimes become a justification for putting crappy solutions in market in the name of experimentation. What we have learned is that a crappy MVP will yield inconclusive results— garbage in, garbage out. As leaders, we need to coach teams to truly understand the meaning of ‘minimum’ in Minimal Viable Product. It is not meant to suggest minimum in resolution, but rather minimum in its scope. It’s about executing on a limited and focused part of the product experience to test the viability of the idea by validating (or invalidating) assumptions we are making about our customers’ behaviors.

Simple rules can change behaviors

In the early days of scaling lean experimentation, we noticed that many teams were running surveys with customers instead of actually running behavioral experiments with customers. Surveys have a time and a place, but they usually do not provide behavioral data that help bridge the gap between what people say and what they actually do. To shift some of these deeply rooted behaviors, we created a lean experimentation tool, called the NEXT tool. We used the tool to teach thousands of Intuit employees the Lean StartUp methodology. As we iterated on the NEXT tool, we found that adding a big “No Surveys” stamp right in the middle of the tool changed our employees’ behaviors over night. We quickly learned that clarity drives action — people seek simple, binary rules as boundaries to safely practice the new desired behavior. Although this move did not make me popular with our marketing research team at the time, it was very effective at helping us drive change across an organization of 8,000 employees.

Skip the head, go for the gut

If you read articles about Design Thinking or the Lean StartUp, you know that both come with their respective jargon. It can get fairly confusing to grasp, not to mention to teach to thousands of employees. At Intuit, we know that PowerPoint-heavy trainings simply do not work. Instead, we designed a three-hour experiential workshop to introduce the power of combining Design Thinking and the Lean StartUp. In three hours, employees were introduced to the NEXT tool and were promptly kicked out of the building to run real behavioral experiments with strangers out in the real world. No time for over-analyzing the tool. We even had 100 CEOs go through the experience at World Economic Forum workshops to help them internalize their role as leaders in fostering a culture of experimentation. Just like with our employees, the CEOs loved the fact that they learned by doing. Through this experience, we changed their hearts; their minds quickly followed.

I hope that these principles are helpful for all change agents out there trying to drive change in complex organizations. The principles above reflect the journey that we have been on at Intuit. I would lie if I said that we had a plan on paper when we embarked on the crazy journey of scaling Design Thinking and the Lean StartUp 8,000 employees across the organization. What we did have was a bold vision for the durable organizational capabilities we wanted to build at Intuit. There are no set roadmaps when it comes to driving significant organizational change; we constantly experiment our way to the answers that are right for us.

As you embark on your own journey, remember that there is no right answer, other than getting started. As one of my mentors once said, “you can’t steer if you’re not moving”. So get movin’!

Ready. Set. Go!