You can’t go wrong if you fail fast
Contrary to the popular belief that failure is negative and should be avoided, the concept of Lean Business Design strongly encourages failure, utilising it as a teaching tool. Starting a new concept within a massive business or startup organisation from an idea jotted down on a piece of paper underpins the concept behind business design. What Lean Business Design aims to do is accelerate the learning process through trial and error. The more you fail, the more you learn and the better you can predict positive outcomes for future endeavours. The key to success is learning.
Adopting Lean Business Design when you have a new product idea is a great way to test its validity before you send it into market. If it’s not a right fit, once tested with your customers, then you haven’t wasted too much time or budget. Engaging an external company to run this process is often a great way to build the business case internally for larger organisations.
To provide you with some context, Lean Business Design adheres to the following principles:
Customer research ensures quality results
An entrepreneur’s time is usually solely focused on building efficient products and prioritising a product’s features. Though the business may think the product is a great idea, it might not necessarily be what the customer wants. Due to this uncertainty, the product might not provide a solution to the problem at hand.
With Lean Business Design, the product is built around a customer’s wants. The customer-centric approach cuts down on the time wasted building a product that is not measured by a validated learning tool. Knowing the customer and placing them at the center of the business design is imperative to the business’s success. A business’s quality is measured through this detailed customer knowledge.
Using customer focused strategy to design
A model called the Lean Canvas is used to establish a baseline understanding of where your business sits strategically. Problems are outlined, solutions are listed, the company’s USP is clearly defined, key metrics are drawn out, and customer segments and channels are sorted.
The tipping point between the early adopters and early majority is generally the most important audience targeted on the innovation curve. These two categories are generally early to adopt change, and have the leadership mandate to do so. Their judgement is valuable as they set the trends for others to follow. Once this data is extracted, the financial aspects of the business, regarding cost structure and revenue streams, are calculated for a maximum customer satisfaction rate.
Measuring success and increasing accountability
Part of a Lean Business Design process includes creating a prototype of the solution. This is an important component of the project as customers can interact first-hand with the business ideas, and valuable feedback can be provided to the business.
By doing this, the data produced can be evaluated to further aid the learning process and make predictions using innovation accounting as the accountability model. Innovation accounting drives accountability across all departments of the organisation, for ultimate efficiency.
Eliminate uncertainty by cutting down on time
Choosing the most essential elements of a product to develop first will speed up the learning curve for the business. Elements that don’t contribute to the learning process can be eliminated. This is called creating a Minimum Viable Product (MVP), and boosts the organisation’s success rate by minimising the total time spent on a project. MVP ensures uncertainty is eliminated in a short period of time by shipping your key elements to market first.
Milestones are measured with conversion rates
When the MVP of a new product has gone to market, the precise conversion rate can be verified, which will show the business integral information about its success. Instead of growing customer numbers, the product development process is enhanced by seeing the change in conversion rates. Applying MVP ensures that data can be captured in order to measure customer behaviour and directly feed that into the next iteration of development.
If your MVP data is not proving fruitful, pivoting is a safe approach to switch lanes, while staying grounded. While the main part of a business may be rooted, different functions of a business can be modified one step at a time. Pivoting allows businesses to make predictions ahead of time, so if they do turn out to be wrong there’s potentially still budget to recover. This process provides a platform to make more errors, learn and enhance decision making.
With all these different, measurable, tools at your disposal, failure doesn’t seem like a bad option to enable future success.
And always remember: we shouldn’t measure ourselves on the metrics determined by society, rather the objectives of what we’re trying to contribute.