All these changes happened due to the way how people consume their products. To deal with the change of people’s behavior and product expectations, companies had to shift towards more flexible, agile and especially customer-centered practices — from staged Waterfall to Agile to Design and Lean methods.
The Waterfall method is a sequential development process. The progress flows steadily towards the goals (like a waterfall). It requires fully planning of projects deliverables and development activities in advance.
Changes are expensive especially in later stages, as most of the time and effort is spend during the design and analysis phases. Every phase has clear goals that need to be achieved in order to move over to the next phase. This prevents customers to review and feedback on projects before the final release. Even if suggestions were solicited, projects are less flexible about accepting feedback. Although Waterfall is a less flexible approach, it is more beneficial for teams that need to execute “the plan” — on time and within budget.
With the rise of the internet, the long development cycles of Waterfall were no longer capable to plan ahead what people need. With the globalization and the new economy of online businesses competition has led to a lot more competition than before. A more flexible product development process was required, as companies were forced to react on market trends in the middle of their development cycles.
Agile refers to a manifesto, which was published in February 2001 by 17 software developers, who have to discuss on lightweight development methods. It is based on an iterative approach, instead of an in-depth planning at the beginning of a project like Waterfall. Teams will always adjust the scope of work to ensure that the most important items are completed first.
The goal of each iteration is to produce a deliverable of working product. As constant feedback from end users is encouraged, Agile enables to react to changing requirements, as they are expected over time. Therefore, these methodology is the right choice for projects when it comes to manage and reduce the risk of changing requirements.
Design Thinking (2000s)
Also known as human-centered design, Design Thinking as a concept has been around for a while under different names (e.g. user-centered design, service design). Design thinking has come into vogue because of its beneficial problem-solving technique and its scientific method. The popularization of the Design Thinking process and methodology is related to approach by IDEO in 2001.
“Design thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Tim Brown, Founder IDEO
This “designer’s toolkit“ is the application of methods and processes which are conventionally associated with designers — think creativity, the flexibility of ideas with a clear understanding of people’s behaviors and needs. Design Thinking is a structured process, that consisting of 4 fundamental phases.
Beginning with the discover phase of a target group, the identified needs and problems will be synthesized to a few main insights. The insights are the foundation for the concept phase, where it is the goal to create many ideas, while the most promising ideas are going to be developed as prototypes. Prototype tests are the last phase and ensure that the solutions meet the needs of the analyzed target group.
Design thinking is created because big corporations lack the ability to be creative and able to create innovative products that meet the needs and problems of their customers. Today, the majority of corporations operate with analytical thinking. This thinking prevents from creative “out-of-the-box” thinking, which is required for disruptive innovation.
This creative and especially “wide” thinking (some call it “crazy-thinking”) is related to the term design. To innovate, businesses must have the capability to design. To design, an organization needs to fuse design internally to create a culture that fosters creative thinking.
The significant difference of Design Thinking is the placement of the customer at the center of every activity. Additionally, human-centered design emphasizes on experience over efficiency, as good experience is the motivator for people to interact with products.
Lean Startup ( 2010-Today)
With the publishment of the book “The Lean Startup” by Eric Ries in 2011, innovation and product development practices have become “Lean”. The goal of Lean Startup is to avoid developing products or service that nobody needs. The Lean process incorporates user feedback and early experimentation.
The methodology is known for the philosophy “fail early to succeed sooner”. Failures are accepted because they enable learnings, which are often required for breakthrough success.
Lean methods are also often called “customer development”. The goal is to find out what customer want before actually building the final product. The principle of Lean is to build assumptions and hypothesis, which you’re trying to test, while you make progress from the learning of your experiments.
What is broke?
Digitization and the enormous speed of change do no longer allow companies to simply build products without incorporating customer needs. In the past, delivering the wrong product to customers had led to failed projects. Today, continuously failing to deliver what customers need, leads to total business model failure. Nokia or Kodak are just the 2 most famous examples to be mentioned here.
Technologies like smartphones, cloud computing, and open source have enabled to build products much faster and cheaper. The barriers for creating products or entering into markets is lower than ever before. That means there is a lot more global competition today. Companies need to be obsessed with understanding customers and what they want. A customer can easily switch to other products. The impact of brand loyalty to consumer decision is declining with every year.
Why you should start now!
In fact, around 60-80% of all products fail within 1-2 years – mostly because there is no customer need for it. While customer research binds resources in the early stage of a product lifecycle, it costs of product changes is exponentially much higher in the later stage of the development process! Often the whole product team is working on product changes to meet the requirements of customers. These painful product changes cost companies today millions in R&D.
Additionally, these product changes are often the reason why startups disrupt industries because they are much faster in understanding customer needs and quicker in developing the right products for it! The time-to-market is one of the most important criteria for the success of products because the customers are just switching to an alternative from a competitor.
Always be validating (ABV-Method)
Lean and Design Thinking are both customer-focused and an iterative approach. Customer engagement and feedback is the engine for making progress. Lean Product management uses the benefits of customer-centric innovation and combines it with agile processes. It helps to achieve optimal product-market fit in a much shorter time while it reduces product failures and expensive changes.
Lean Product Management is about to combine the principles of Design Thinking while always be validating ideas and products to get products to market rapidly.
Engage customers continuously
In the new world, successful companies will have one thing in common: an exceptional understanding of customer behaviors and needs. As behaviors and needs are changing fast, the only way to ensure to build what customers need is to engage them continuously. True customer understanding is the foundation for long-term business model success.
Combine Design Thinking, Lean and Agile
While Design Thinking, Lean and Agile can be applied alone, the best results come from a combination of those approaches. While Design Thinking helps to gain insights into customer needs and behaviors, agile helps to efficiently develop and deliver solutions in an efficient way. Use Lean practices and gain insights during customer or assumption testings. While you continue this build-measure-learn cycle you will get steadily closer to a successful product and a working business model.
Subscribe to the newsletter to receive the Lean Product Management series in your email. Visit the Pyoneer website, if you want to know how you can successfully combine Design Thinking, Lean Innovation and Agile with a software.
About the Author
Stefan is a passionate Design Thinker. He is the founder of Pyoneer, a SaaS solution for Lean Product Management, which allows to centralize customer feedback or research, while it combines AI power to gain valuable insights on needs and problems to enable a data-driven product roadmap.
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What does it require to create successful products? How to build up and grow a sustainable business? Are their techniques to increase my chance of business success?
Our journey began when we first discovered The Lean Startup by Eric Ries in 2011. This book was a milestone as it completely changed the perspective of how to build a business. Companies and entrepreneurs were used to write endless pages of a business plan, wasting time and money on building a product that nobody would buy. Customer-centric product validation with tools like the business model canvas was the new guide to success for your idea.
What we experienced soon after our discovery of the Lean Startup book was one other fundamental trend in the industry — Design Thinking. Today this buzzword is as present as Artificial Intelligence, Blockchain or Big Data.
Design Thinking is spreading in an increasing pace into product development and is able to attach itself to a lot of things. I recently wrote an article, why Design Thinking is the next generation of project management. There are many different definitions of what Design Thinking is, the essence of it is: put customer problems first.
Putting customer needs in the center of all we do for them — wether it’s creating products or services — changed everything. It is a creative problem-solving process that uses elements from the designer’s toolkit like empathy & experimentation to arrive at new solutions.
This practice helps to minimize the uncertainty and risk of innovation by engaging customers or users through a series of prototypes to learn, test and refine concepts. Design Thinkers rely on customer insights gained from real-world experiments, not just historical data or market research.
We love Design Thinking
Why? Simply because it creates value — for humans. We believe every product, service, activity which has no purpose for someone is just a waste! We want to give back to others, innovation enthusiasts, people interested in entrepreneurship, companies in their digital transformation and just everyone else who wants to learn how to be more creative and successful with their product or service innovation.
Our eBook — Growth Hack Design Thinking
We do not just write about basic topics of “How to’s…” or “Why Design Thinking makes sense ..”. We want to examine advanced topics and business applications of the method because there is no doubt anymore that the it works. Just read the latest report from the Design Management Institute that has discovered an over 219% higher ROI of companies that have incorporated design practices in there operations.
We want to go one step further
“Growth Hack Design Thinking” will be about advanced tips and tricks we have discovered during our recent years in consulting and venture building.
During the next month we’ll frequently publish about the following topics:
Why now — Opportunity and History
How to find the right interview partner fast and keep them engaged
What are good KPIs for a design challenge?
Advanced tips and tricks on the Design Thinking steps
Result driven vs. method driven Design Thinking
Best practices of companies applying DT
Best books and resources
The Personas in the book
The Innovation Manager or Consultant who’s goal is to create disruptive innovation out of his design challenges
The Design Thinking Coachor UX Designer who is looking for the best method and hacks
The entrepreneur who needs to drive his idea to go-to-market and scale-up fast and lean
So, even if you are learning or you do have experience, you can follow our steps and apply the learnings to your own project
Share insights, articles, and comments!
…Or maybe you can come up with your own articles?
Ask questions! We are happy to chat.
You might also disagree with some of the thoughts: That’s why we want you to disagree and discuss with us too!
Become part of the book
Our main goal for writing this book is to deliver value for the community. That’s why the best way to do this, is to create the content together with you!
Do you have an interesting story to share?
What was your biggest success/fail with Design Thinking or UX?
Help us to collect the best information and experiences! Every supporter will be mentioned as Co-Author after we’re going to publish this book.
This article focuses only on the first process phase of the Design Thinking and User research process, which it deals with understanding your target customer group as well as their behaviors and feelings in order to get a clear picture of their daily goals and needs. This is essential before you can develop more precise solutions, tailored exactly for your customer.
Empathy allows us to feel what it is like to be in somebody else’s shoes— a prerequisite for customer-centric and lean innovation. The more we put yourself in the position of the frustrated customers, the better we will understand his pain points. Involve observations, interviews, consulting with experts, and measurements to gain empathy. There are some open innovation toolkits available, of which I like Mozilla’s available and comprehensive library
Quick market and competitor research will help you to understand the industry and current opportunities with their strength and weaknesses. If your planning is to offer competitive products, the blue ocean strategy is one of the best ways to highlight your competition entry points and allows you to focus on product features you should focus on. Use this spreadsheet to start with the analysis right away.
It’s important to relate to physical as well as conceptual elements to avoid assumptions and make objective assessments.
To capture all your relevant information it’s best to create Personas. This allows everyone in your team to visualize key insights on your target customer group. Use Customer Journey’s to analyze every process step that your customer takes during his buying interactions with your company. Both methods allow you to make customer thoughts, feelings and behaviors transparent and will provide every team member as well as people outside the team with crucial information, where your customer faces problems. This activity can be done either with your existing products and services or any other competitive solutions which the customer is already using.
With Pyoneer our goal is to provide every Design Thinking practitioner with the right toolset. With our Persona and Customer Journey tools we believe to simplify applying Desing Thinking for everyone, whether he is an expert or a bloody beginner, and wish our solution takes this great customer-oriented framework into the daily work of more and more people.
Most products fail because we waste needless time, money, and effort building the wrong product — something nobody wants.
We need to embrace the fact that customers are significantly different than ever before.
Today, products are delivered via the internet, which has led to a dramatic shift in how people consume, demand, and interacts with products. The challenge companies face today is to deliver personalized, valuable, and immediate experiences.
The old “one size fits all” mentality doesn’t work in the future, where companies develop and market products based on market segmentation and demographics. The assumption that products, features, and marketing will meet the needs of all people within that demographic is obsolete.
Use Persona build empathy with your customer
Personas are fictional characters that contain insights from your customer research. They represent one customer type that is interested in your products, services or brand. This archetypes of people incorporate customer goals, problems (often called “Pain Points”) behaviors and interests. These help teams and decision makers to think from a customer perspective and add a human touch — in contrary to the traditional internal perspective. Additionally, they allow you to understand patterns in from your research, what is synthesized in archetypes of people you seek to do something for. Personas are also known as model characters or composite characters.
Value of using Personas
Personas are a great way to visualize what you currently know about customer needs and behaviors. In a rapidly changing world, it’s the only way to ensure you build what customers want is to engage them continuously. Personas are the best way to control the changing needs of your customers.
Create and update Personas when:
You receive a product, feature or service request of customer –
To agree no your product planning to prioritize feature based on the Persona value
Teams with different roles collaborate to create products or value for the customer
Your teams need to be aligned to share the same customer understanding
Personas in the Design Thinking process
The risk of product-failure in our fast evolving world can be reduced with a continuous engagement of your customers. Customer research provides teams and organization with the required insights and confidence to ideate and develops the right products. All innovation and product development activities need to have a clear purpose to create value for your customers and to solve his problems. A persona represents exactly this “voice of your customer”.
Personas are normally created during the second phase of the Design Thinking process — the Define phase. Design Thinkers synthesize their findings and insights from customer research. Very often teams also start to create Proto-personas which are based on secondary research. Secondary research, like competitor or market analysis, allows quick insights for the first draft of your Persona.
Using personas is just one method, among others, that can help designers and development teams to define the customer problem statement. This so-called Point-of-View (PoV) is a guiding statement that focusses on specific users, and insights and needs that you have uncovered during the customer research. You can articulate your POV by framing the information about your customer (Persona), the needs or problems and the insights in the following sequence:
The PoV defines the RIGHT challenge to address during the next Design Thinking process step, which is the Ideation phase. It
Get feedback from all your customer touchpoints in one place
Many organization oversees the real value of their data generated by customers. There are dozens of “Voice-of-customer” solutions with customers, like support systems, survey tools, app reviews, sales tools, NPS services, internal tools and many more. It’s relevant to get all your data in one place to uncover what your customers are saying and requesting. Personas are fictional characters but they represent your existing and living customers, that’s why it’s necessary to update these archetypes with your frequently gained insights.
Customer feedback via social media or product review sites like Amazon can horribly damage brand reputations. It is so important to consider every touchpoint with your customer. In our fast-changing world one of the main goals of the organization, today is to have an up-to-date understanding of all your customer groups to ensure continuous innovation. Create Personas during your customer research and update them, whenever your customer leave relevant insights with problems or needs.
Beside creating Personas, connect your “Voice-of-Customer” tools to get all your relevant customer feedback from customer research, sales, marketing and service in one place. With the centralized data, you can very easily select and add insights to your Personas, that your teams will always be provided with the required customer information. This enables teams an instant view of customer problems and needs, to be equipped with the required information to come up with better products that deliver real customer value.
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Is there a simple way to innovation and successful products? No, of course, it’s not! In Fact, most products fail. Not because we fail to build what we set out to build, but because we waste needless time, money, and effort building the wrong product — something nobody wants.
But what is the secret of good and bad innovation? How do innovative multibillion-dollar companies differentiate from others?
Successful product development has fundamentally changed
When Apple released the iPhone in 2007, Nokia still had about 50% market share in the mobile phone market. Although they were releasing continuously good phones, they lost their market dominance within just 3-4 years. The big problem was not, that Apple just had a great product that worked well – It was the constant belief of Nokia and it’s management to think that they know what people want. With the release of the iPhone Apple achieved to redefine the way people use phones – what led also to a total change of their behaviors and expectation to mobile phones. Nokia failed in listening to what their target customers wanted.
The story of Nokia is just one example that shows that shows with the fast evolution of technology also peoples expectations and experiences with products are changing. This is because customers today have more choices than ever before. With the rising demand for smartphones and mobile apps, Nokia had enough chances to build a product their customers want and an app-ecosystem that could compete with Apple. But they didn’t – what opened the opportunity for many other competitors like Samsung. Today people have full access to product information, online shops or price comparison sites. As products have gone from being delivered in a box to being delivered over the Internet, there’s been a dramatic shift in how customers consume, demand, and interact with products.
In the old world, failing to deliver what customers wanted, led to product failure. In the new world, repeatedly failing to deliver what customers want leads to total business model failure.
If one company doesn’t get the job done, customer simple switch to something else.
The challenge today isn’t building good products, but uncovering how well products solve customer problems or meet their needs. Today’s consumers are demanding more from companies. Customers expect products, services, and information that are timely and catered to their specific needs and desires. Traditionally, companies develop and market products based on market segmentation and demographics, assuming that the features and functionality will meet the needs of all of the customers in that demographic. This “one size fits all” mentality doesn’t work anymore today. We need to embrace the fact that customers are different now, significantly more so than previous generations.
Understand who your customer is
Personas are a good way to accurately identify customers needs and desires. However, as the marketplace shifts from a mass manufacturing to a mass customization model, customers needs and desires are more accurately identified through the development of personas rather than through demographic data.
A persona represents a cluster of users who exhibit similar behavioral patterns in their purchasing decisions, use of technology or products, customer service preferences, lifestyle choices, and the like. Behaviors, attitudes, and motivations are common to a “type” regardless of age, gender, education, and other typical demographics.
Deliver a great experience
Product innovation and new technology in mobile, social, and artificial intelligence allow delivering a more personalized, valuable, and immediate experiences for consumers. Customers have more choices than ever. As a result, they grow to expect this superior experience from any business they engage with.
Expectations and behaviors have totally changed. The gap between customers’ expectations and products or services they receive is getting bigger more and more. Amazon’s product recommendation “what customers who looked at this item also bought.” is a significant element of their success. Today’s e-commerce shops have to mess with this new level of online shopping experience because customers just expect this service from now on. If you want to order a taxi or book an apartment, customers will always compare the booking experience with Uber or Airbnb.
Although companies have long declared their intention to get close to their customers, the digital age is forcing them to actually do it.
The good news is that getting closer to your customers can help to reduce the risk of product failure. Practices like Design Thinking and Lean Startup involve customers even before product releases, as test and experiments are a cornerstone of innovation projects. Instead of guessing what products and features are wanted by the market, companies can adjust product and features with direct input from end users before launching it. These process not only help to de-risk product development, it also tightens the relationship between companies and their customers. Additionally, it often provides valuable information and insights about how customers think and use the products which are being developed.
Why companies and leaders should reconsider their current philosophy of project management and why they cannot afford to ignore the value of Design Thinking for their organizations!
Design Thinking and Lean Startup are totally popular, although these practices exist already for years. Gartner IT research estimates that by 2021, more than 50% of established corporations will be leveraging lean startup techniques at their business level to increase the pace and success of business transformation. Industry leaders like IBM or Procter & Gamble have trained their whole organization with the disciplines of design thinking, to become more innovative and especially customer-centric.
There are clear indicators that a transformation of organizations and especially operations towards a more customer-centered approach is happening. Design Thinking and other human-centered methodologies like Lean Startup or Lean UX have become mature. In this article, I’m going to look at management practices and why we believe a new era has just started.
Digital disruption is present in every industry!
Technologies such as mobile devices, social networking, cognitive computing, and the Internet of Things are changing the way companies design, manufacture, and deliver almost every product and service. It also significantly increased the pace of change in business as a whole, requiring organizations to become agiler.
This, of course, has a disruptive impact on Product Development and Innovation as a whole. Traditional industries with dominated market position and business models (keeping prices artificially high) don’t work in a digital world, with shorter and more frequent product development cycles, global competition and the rise of freemium services.
Customers and users are now connected via social media, which allows updating people in seconds about their experience with products, services or companies. An increasing number of consumers depend on their purchasing decisions on reputation and reviews. Shitstorms can ruin brand reputation within a couple of days, what marketing departments have built up over the years.
Digitization forces an organization to deal with completely new challenges and market preconditions. I know this isn’t highly advanced research, but I want to emphasise on the new requirements and settings for businesses and their organizations.
Why Digital Transformation should receive more consideration
Digital Transformation is one of those buzzwords, that you hear by almost every company, although every transformation is going to be different for organizations. You can define it, as the integration of digital technology into all areas of a business.
You can define digital transformation, as the integration of digital technology into all areas of a business.
It results in a:
a fundamental change of how businesses are operating and how they deliver value to customers.
the cultural change that requires organizations to continually challenge the status quo, experiment often and getcomfortable with failure.
change of organization and practices, going away from long-standing business processes that companies were built upon in favor of relatively new practices that are still being defined.
To handle these changes, many different management approaches have evolved, claiming to be the best and most efficient way. Companies have understood that linear methodologies like Waterfall, which follow a sequential and linear process of development, doesn’t work. The model originated in the manufacturing and construction industries, both highly structured environment where changes can be too expensive or sometimes impossible.
With the need for shorter product life cycles as well as higher flexibility during development, agile project management has become the standardized way of managing projects. Agile refers to a manifesto, which was published in February 2001 by 17 software developers, who have to discuss lightweight development methods. It is based on an incremental, iterative approach, instead of in-depth planning at the beginning of a project like a waterfall. Changing requirements are expected over time and constant feedback from end users is encouraged. The goal of each iteration is to produce a working product.
While Agile was traditionally created for software development, it can also be used in many other projects and industries. Many practices in Agile, like stand-up meetings and visual management, are so common and can apply to any industry. It’s important to remember that Agile software development was born from the principles of Lean manufacturing and organizational learning.
There are subsets of Agile, like Scrum, which is one of the most popular process frameworks for implementing Agile. It follows a set of roles, responsibilities, and meetings that never change. But as agile, scrum also has its limitation on considering and integrating customer problems and needs.
During my interviews with leading enterprises like SAP, BMW, Lufthansa, and many others, to identify their philosophy of doing the digital transformation. “Our tech teams are applying Agile, product teams are trying to integrate Lean and with the increasing need of customer- and user-centricity we want to combine everything with Design Thinking.”
But which one is the best?
While agile and scrum helped teams to gain flexibility, speed and the ability of continuous improvement, this generation of project or product management is limited in its capability of understanding and integrating the customer in team activities. Human-centered development approaches add the most crucial dimension to the success of any company activity — the customer!
Put the customer at the center of everything — focus on customer value if you’re struggling to get an alignment as a team. Ask yourself on a regular basis:
How do we know we’re shipping something users care about?
How do we find out?
How does that affect what we prioritize?
Why Design Thinking and Lean Startup have come to “be”
Design Thinking helps teams to emphasize the customer problems and needs while Lean Startup helps with its build-measure-learn loop to identify the best-fit solution for the identified problems. Be aware that none of these methods are sufficient alone and only reveal their full potential in combination.
Successful companies nowadays neither stand out because of their most efficient production, nor their best engineers, sales managers, marketing commercials or whatever. It’s more their dedication to understanding the customer as well as their strong commitment to serving customer problems and needs.
Amazon is the best example of executing this practices in perfection, what helped them to achieve best-in-class customer satisfaction ratings and has enabled them also to dominate multiple markets (E-commerce, cloud web services, E-book reader). As more companies understand the real value of customer insights, the better they can target their business activities like product development, marketing or strategy in general.
Applying human-centered correctly helps companies not only to become more agile or flexible in their product development. It allows also to reduce waste in developing the wrong products as well as it helps to avoid investing money and resources into not required solutions. We believe human-centered has the opportunity to reveal the full potential of every organization and especially its employees. It helps them to alignment their teams towards customer value which will help to create successful products and services. This is why we believe no company can afford in future to disregard the relevance of customers and to avoid using human-centered methods in their organization.
Neither Design Thinking or Lean Startup nor agile or user experience (UX) are new for companies. To become successful in the future, I believe it´s a matter of how well companies combine all of those practices. Efficiency will be measured in who well teams have a common understanding of their customers, as it allows them to target their work more precise towards the desired outcome. Designers teams can create better user concepts, development teams can prioritize better on features based on the customer value and the manager will gain more confidence in taking the right.
What remains open is the question of how Design Thinking generates an interpretation of user needs that are so trivial and non-complex, that teams can build on this insight in further processing Agile mode. Is an interface between Design Thinking and Agile imaginable, which allows simple planning and makes sequential processing possible?
There is good news — Pyoneer is going to building this interface!
Pyoneers is going to build an SaaS-Solution for innovators who want to deliver products that solve real problems. You can sign up at pyoneer.io to get insider first looks at the product and updates on our upcoming release.
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What would you think if there was a manual to create innovative products, experiences or services? I’m not talking about incremental improvements, like e.g. more pixels on your screens or few more horsepower in your car’s engine… I’m talking about disruptive innovation, that change the behavior of users while improving people’s lives! No worries, if you’re skeptical now! In general, innovation is all about humans. Day by day, humans create things for humans!
I want to share my experience from the moment I got into contact with Design Thinking to the moment where I have noticed a deep problem for a specific group of people. That’s when I came up with a great solution to this problem and finally, we grew into a rockstar co-founding team to run a Lean Startup now.
I’m excited to share this method and experiences with you. I practice, love, use, teach and learn from Design Thinking every single day at work, and in life. And I hope to inspire others to apply it in their daily work, as I promise it will guide you to the solution of problems.
Design Thinking – A problem-solving methodology
Developing successful innovative business models, products and services have become one of the most important success rate factors for today’s business landscape. 82 percent of CEO’s of world’s leading companies have concerns about whether their company’s current products or services will be relevant to customers 3 years, the “2016 Global CEO Outlook” survey from KPMG found out.
Especially in times of emerging disruptive technologies, glutted markets, decreasing product lifecycles and continuously increasing expectations of customers. One of the main reasons is digitization and the enormous speed of change.
Design Thinking is one of the methods to achieve innovation! Most successful startups have successfully applied it and continuously develop their products and services with this framework (like AirBnb and Dropbox). It goes well beyond the plain “look & feels” of an object: it is actually a state of the art problem-solving methodology!
“Design Thinking is a human-centered model that encourages creativity and innovation to create a product or service that solves a complex problem for your target customer or user. It can help you innovate a new product, design a simple solution to a complex problem, or to get the whole team involved in generating design ideas so they feel included and believe in the process.” David Kelley – IDEO founder
The challenges of modern business, it’s global and cross-industry aspect urged for new problem-solving frameworks, capable of producing extraordinary solutions. Design Thinking offered a win-win strategy: “human-centered design that is all about looking out from the inside—rather than outside in”.
It involves massive collaboration and frequent iterations and has five very clear phases:
I’m going into detail on the Design Thinking process in some upcoming articles, that’s why I’m going to skip this for now.
Lean Startup – an efficiency model for innovation
The term “Lean Startup” was developed in the IT industry for software startups and became very popular with the book “The Lean Startup” by Eric Ries in 2011. “Lean” principles were developed in the early seventies by Toyota to optimize production processes and reduce any sort of waste in the process. The Lean Startup process claims that the most efficient innovation is the one for which there is an actual demand by the users. Or put in other words: the biggest waste is creating a product or service that nobody needs. This concept is highly relevant for any strategy or method that aims at creating innovations.
Design Thinking and Lean Startup are not the same, but comparing them you’ll notice that they have one thing in common. It is all about the customer. Both methodologies try to identify customer needs in order to create appropriate solutions. The method of lean startup goes one step further: try to test core business assumptions early in the product development process, sometimes even before any product is built at all. Track your assumptions and learn from the insights that you have gathered during testing with your customer.
Continue this build-measure-learn cycle and make progress in an iterative way, while getting closer to the solution your customer wants to have.
Pyoneer’s start as a Lean Startup
At the moment I have to admit to putting all my energy and time into founding a company. It was also clear that perfect execution is required in everything we’re going to do. I knew it will be a super difficult and long way. There are many statistics of failing startups and the figure is around 90%. To become successful it’s not sufficient to have a good product idea or excellent salespeople. **The perfect balance of the right product, while serving the market with excellence and managing everything by an awesome organization, is required. **
When our founding team grew together, we’ve noticed to have a perfect balance of complementary skills – the most valuable achievement in the early days for a startup! We are convinced that we’re going to be successful, no matter where the future is leading us to, but finding a perfect set of founders is the main groundwork. Every one of us is somehow different and there are often some deep discussions. But we see this more as fuel for our spirit! As we had founded a team, we knew that there was a growing market and had a solution for a problem so we decided to build up everything using Design Thinking methods. We wanted to execute in perfection from day 1! We created target groups, analyzed their behaviors, interviewed to understand their jobs and problems. In Lean Startup, everything is about validating your assumptions and hypotheses, so these steps were required in order to gain confidence if our tool was to solve their problem. Additionally, we created mockups and digital prototypes that we again showed to our target group to gain feedback about whether our solution is sufficient and viable for them.
As it turned out most of our assumptions were correct so we decided to build our solution – and to found our startup Pyoneer. It’s a Software-as-a-Service application for documenting, visualizing and managing all your innovation activities based on Design Thinking and Lean Startup methodologies. With Pyoneer we want to provide the right toolset for each process phase and guide the user through the process. We also want to enable access and full transparency of collected information and results for everyone – to help teams across the globe to convey the big picture in one place.
We are currently in the development and are going to release our first features the next weeks and are totally excited to see which feedback users are going to give us. We’re seeking this feedback, as it’s essential to get better and know exactly what our customers need.
We believe that if we keep listening, thinking, creating, validating, learning and always being open and transparent we’ll end up with the right amount of customer value and we’ll create a solution that people love.
As you can see we started with a Lean Startup culture and we will continue on this as we’re positive it will guide us to success! I hope I could inspire some of the readers and would be happy to hear your opinions. Stay tuned if you are interested in our path, we’ll be back soon!
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