Thursday, May 5, 2016
Have focus, be disciplined, communicate, and trust each other (4/4)
Unlike classic linear development (idea-prototype-product-sales), lean innovation is based on merging product, customer and market development. There is a danger of developing products and services with an insufficiently big market (hallucination) and/or ones for which the current market is inaccessible (fata morgana). Luckily, there are experiences on how to look for high-impact innovations in a way that requires the fewest resources, in time as well as money. This is the focus of the last article from a series created under the umbrella of the PODIM Conference and its activities for breakthrough innovation in established companies.
First what and why, and only then how
Before we work out the entire topic in detail, we should emphasise that we have to find the right thing as soon as possible, even before we tackle it in the right way. So, first we answer the questions what and why, and only then ask ourselves how!
Fewer resources for a better effect
A limited amount of resources is very important in innovation because in abundance (comfort, ease) little is done or changed. Financing (allocating resources) should be gradual, much like the experience is gained gradually. Even children don't get a motorcycle right away, but rather start with the training wheels.
The idea can only be confirmed or disproved on the market!
Too early and too extensive financing can be devastating. Getting capital or the CEO's agreement also isn't real idea confirmation. The idea can only be confirmed or disproved on the market with consistent confirmation of individual elements of the business model. In the first stage – the stage of problem/solution fit – really small resources are usually enough.
Innovation is risk
Without a safe environment, where failure is an integral part of looking for business models, lean innovation won't be possible. Faster learning about what works and what doesn't is necessary. It's better to fall 30 times from 1 meter than once from 30 meters (Deep Kapuria, India).
The best insurance for innovation risk is consistently implementing lean development stages, the mentioned daily (starting with the riskiest assumptions with the biggest impact) and weekly (what we learned) routine.
Monitoring progress
Trust is a nice virtue, but monitoring is still necessary. Regular weekly reports about what we learned are very effective: what we think we did, what happened, what we learned, what we will do next. The management will only support activities as long as they believe the team that they can create a good business model. They will only do the first bigger investments after the team reaches the product/market fit. For more guidelines, write Investment Readiness Level into your web browser.
Visualization helps
Stick business model drafts, experiment plans, field reactions, dilemmas to walls, doors, closets and even windows ... Such a space will bring the entire team closer and help it focus. Meetings with the management of course take place in this same space and not in the main office or the boardroom.
Have focus, be disciplined, communicate, and trust each other
Your goal is to find and develop solutions that the user wants, are technologically doable and economically justifiable, and will change market conditions. And your final goal is to find the right offer price in the scope of the right business model.
Lojze Bertoncelj, MSc, 30Lean, dr. Alexis Zrimec, Abelium, prof. dr. Miroslav Rebernik and Matej Rus, MSc (Faculty of Business and Economics, University of Maribor, and Venture Factory, Initiative Start:up Slovenia).
First what and why, and only then how
Before we work out the entire topic in detail, we should emphasise that we have to find the right thing as soon as possible, even before we tackle it in the right way. So, first we answer the questions what and why, and only then ask ourselves how!
Fewer resources for a better effect
A limited amount of resources is very important in innovation because in abundance (comfort, ease) little is done or changed. Financing (allocating resources) should be gradual, much like the experience is gained gradually. Even children don't get a motorcycle right away, but rather start with the training wheels.
The idea can only be confirmed or disproved on the market!
Too early and too extensive financing can be devastating. Getting capital or the CEO's agreement also isn't real idea confirmation. The idea can only be confirmed or disproved on the market with consistent confirmation of individual elements of the business model. In the first stage – the stage of problem/solution fit – really small resources are usually enough.
Innovation is risk
Without a safe environment, where failure is an integral part of looking for business models, lean innovation won't be possible. Faster learning about what works and what doesn't is necessary. It's better to fall 30 times from 1 meter than once from 30 meters (Deep Kapuria, India).
The best insurance for innovation risk is consistently implementing lean development stages, the mentioned daily (starting with the riskiest assumptions with the biggest impact) and weekly (what we learned) routine.
Monitoring progress
Trust is a nice virtue, but monitoring is still necessary. Regular weekly reports about what we learned are very effective: what we think we did, what happened, what we learned, what we will do next. The management will only support activities as long as they believe the team that they can create a good business model. They will only do the first bigger investments after the team reaches the product/market fit. For more guidelines, write Investment Readiness Level into your web browser.
Visualization helps
Stick business model drafts, experiment plans, field reactions, dilemmas to walls, doors, closets and even windows ... Such a space will bring the entire team closer and help it focus. Meetings with the management of course take place in this same space and not in the main office or the boardroom.
Have focus, be disciplined, communicate, and trust each other
Your goal is to find and develop solutions that the user wants, are technologically doable and economically justifiable, and will change market conditions. And your final goal is to find the right offer price in the scope of the right business model.
Lojze Bertoncelj, MSc, 30Lean, dr. Alexis Zrimec, Abelium, prof. dr. Miroslav Rebernik and Matej Rus, MSc (Faculty of Business and Economics, University of Maribor, and Venture Factory, Initiative Start:up Slovenia).
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For more guidelines and real-life experience on how to effectively innovate in established companies, the best way to take advantage of this year's PODIM Conference is to decide for the PODIM PRO package.
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For more guidelines and real-life experience on how to effectively innovate in established companies, the best way to take advantage of this year's PODIM Conference is to decide for the PODIM PRO package.
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Together, we are trying to spread best practices of the lean startup way of developing new business models, and simultaneously connect established experienced managers with innovative startup entrepreneurs:
- The Managers' Association of Slovenia, helping managers deal with challenges of implementing digital changes whose tempo is dictated by rapid, lean and innovative startup companies with their disruptive digital products and services.
- Initiative Start:up Slovenia as the provider of key national programmes for startups and connector of public and private stakeholders of the Slovenian startup ecosystem, summarizing its activities every year at the PODIM Conference.
- Business daily Finance with the media project Startupozavri or Startuposauruses, in which they highlight startup freshness in established Slovenian companies and thus contribute to healthy development of entrepreneurial spirit in the Slovenian society.
- 30Lean as an established consultant and mentor of lean innovation in already established organizations, mentor of startup teams of the Slovene Enterprise Fund, ABC Accelerator and others, and the leading partner of the Slovenia Running Lean movement.
Our first joint activities include gathering and sharing these types of good and bad experiences, and co-creating PODIM Conference content for established companies.
