Lean Innovation — How to develop successful products today [Series — Kickoff]

Why your customer is key to success today more than ever before

This is the first story of my series “Lean Innovation — How to develop successful products today”. It’s about the shift of product development that happens and they methods that have changed over the past 50 years. Like “Lean” manufacturing changed the way companies are building physical products today, Lean and continuous innovation is on the way to become the same standard in the way to invent and develop successful products today. During the next weeks I’m publishing multiple articles on the following topics:

  • Why Lean Innovation is the new way to build successful products
  • Comparing Lean Innovation methods — Design Thinking vs. Lean Startup vs. Lean UX
  • How to create an innovative culture to win in future
  • Chase the insights and customer problems, not the solution
  • How to deliver a better customer experience and real customer value
  • Simple steps to create successful products and services
  • How to combine Agile, Design and Lean in parallel
    Lean-Innovation-Process-detailes_small

Why I’m writing about this?

We know we learn by trying, sharing, benchmarking and asking questions! My startup team at Pyoneer are big fans and supporters of Design Thinking and the “Lean” movement (self-explaining, as we’re developing software for Design Thinkers ;)). We strongly believe that products and services are something to make life’s easier for people. We’re still stuck in an old world, where too many products are failing. Companies waste needless time, money and especially the energy of employees in build products that nobody wants. Our ultimate goal is to help companies to build products that people will love.

I’m sharing our experience and my thoughts with you — I want you to participate too, as we can all learn from each other!

“But I am completely new to Design Thinking and Lean Innovation… Will I learn something?”

Absolutely! I’m going to share my personal experience of how we:

  • used Design Thinking to find a product that solves customer problems
  • applied Lean Startup to achieve Product-Market-Fit without having an existing product
  • combined Design Thinking and agile software development in an efficient way

The goal if the story is to motivate people to become true innovators and help everyone to understand the principles of good and efficient product innovation. Additionally, I want to give people instruction and share good examples on how to apply Lean Innovation correctly.

"I’m working in a corporation and don’t want to found a startup. What do I get out of it?"

No matter if you work for a large company or currently planning to grow your own business. The articles point reasons why and how everyone can become an innovator. Good innovation comes most of the times from the right mindset. Lean only means to reduce waste, nobody needs. A “Lean” production creates only products, when a customer places an order, instead of overproducing and waiting until someone buys something. A “Lean” Innovation does only create products when they notice a customer problem or need that could be solved by a solution. This is valid for people involved in engineering or product development as well as people working in human resource. “Lean” means always to pull, instead of pushing.

One more thing: One principle of innovation is always to make the first step and this one could be yours. Let’s do this!

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 on LinkedIn!
  • …Or maybe you can come up with your own articles?
  • Ask questions! I’m happy to chat 🙂
  • You might also disagree with some of the thoughts: That’s why I want you to disagree and discuss with us too!

When is it happening?

The series will be released during the next 3 weeks. Follow my posts on our Pyoneer blog, on Medium, on LinkedIn or join the discussion on our Design Thinking and Lean Innovation Community at Slack!

Sign up to get receive the "Lean Innovation" story and updates from Pyoneer on your mail.

Thanks for reading! What do you think? Leave a comment and share our story!

Is there a simple way to innovation and successful products? No, of course, it’s not! If it would exist,

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?

homer-car-design
The Homer Car. A car developed for a single person — Himself

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.

The_speed_of_change

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 days, what marketing departments have built up over years.

Digitization forces organization to deal with completely new challenges and market preconditions. I know this isn’t highly advanced research, but I want to emphazise 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 digital transformation, as the integration of digital technology into all areas of a business.

It results in a:

  • fundamental change in how businesses are operating and how they deliver value to customers.
  • cultural change that requires organizations to continually challenge the status quo, experiment often and get comfortable 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 this 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 of 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 on lightweight development methods. It is based on an incremental, iterative approach, instead of an in-depth planning at the beginning of a project like 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.
Agile-1

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.

Human-centered (Lean)Management

During my interviews with leading enterprises like SAP, BMW, Lufthansa and many others, to identify their philosophy of doing 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 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 on 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 their employees. It helps them to alignment their teams towards customer value what 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.

PM-3.0

Neither Design Thinking or Lean Startup nor agile or user experience (UX) are new for companies. To become successful in 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 manager will gain more confidence in taking the right.

Combaning-DT--Lean-and-Agile

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 a simple planning and makes sequential processing possible?

There is good news — Pyoneer is going to building this interface!

Thanks for reading! Leave a comment and help us to share our story! Give it a ❤ if you liked it 🐠

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