Expert Insight on Lean Startup, Design Thinking and Innovation
Last week expert panelists from UnitedHealth Group, LPL Financial and DentaQuest, explored on our hangout webinar “Lean Startup & Innovation: Is It Working?”. how Lean Start Up, Agile and Design Thinking have changed the face of innovation – and how it will continue to do so in 2017.
First, our panelists:
UnitedHealth Group – Ed Boudrot, VP of Product Management
DentaQuest – Dan Williams, Executive Director of Innovation
LPL Financial – Ieasha Taitano, VP of Innovation and Design Thinking
Riffing off of Eric Ries’ book “The Lean Startup” a definition emerged:
“A value of lean startup is to reduce cycling times and costs.”
“It is experimentation.”
“It uses rapid methodologies for testing and evaluating early and getting customer feedback using minimum viable product.”
“Think continuous innovation, not one and done.”
“We need to shift our thinking from “build, measure, learn” to “learn (about our users), measure, build”.
And, getting comfortable with the idea of failure when you are learning from it.
Lean Startup and Design Thinking – How They Relate
“Lean Startup picks up where Design Thinking leaves off,” shared Ieasha. “Design Thinking gives you a methodology to refocus your thinking on the user versus yourself. This starts with desirability, feasibility, or viability. All the things that we know from the process space, it is now applying it into the design space. Design Thinking helps us realize what is desirable to our user, lean startup helps us really understand the impact of the idea and customer—and if this idea can actually be done and make money. Don’t speculate, instead test.”
Great Examples of Lean Startup
The Founder of Zappos, one of the first online shoe retailers, wanted to test his hypothesis that consumers would buy shoes online. Instead of building all his infrastructure, he approached local shoe stores, took pictures of their inventory and posted the pictures online on a basic website. If he received an order, he’d buy the shoes from the stores at full price and then send them directly to customers.
As Ieasha commented, “Zappos is a perfect example of what to do with Lean Startup. Yet adopting these lean principles is harder for large companies. Big companies do not like the idea of a MVP (minimum viable prototype- or product). They don’t like that you are going to duct tape together a solution and put it in front of the customer. They need to understand it is okay to put a picture up in front of the consumer and to act lean. Big companies want the big reveal without asking the consumer first. This is the big hurdle companies need to overcome in this space so they can create something really amazing.”
GE’s FastWorks program is another example of the lean startup in practice. In our November Hangout, “Selling Innovation & Design Thinking Internally”, Ann Marie Dumais of GE references GE’s approach to product development, FastWorks, which uses lean startup principles including testing prototypes with consumers and then iterating them accordingly. One lean example from GE is a French door on a refrigerator that went through 18 iterations after receiving customer feedback after each iteration.
Shifting Your Company’s Mindset
Ed of UnitedHealth Group understands that shifting your company’s mindset is not easy. He runs “Fusion sessions, which are Design Thinking workshops with strategy creation” – but they can be a tough sell to those new to the process. One time, at the start of a session, a doctor pulled him aside and said, “Let’s cut the BS. I know what I want to build so let’s just do that with the designers here.” Ed convinced the doctor to give him half of the day to run through the workshop, and promised to shift if it wasn’t working. After two hours the doctor was amazed and agreed to follow the process instead.
External firms can help with shifting a company’s mindset of how things should be done, too. “And this is where external agencies really shine,” added Dan. “They have more leeway to push the boundaries and create a framework for collaborative ideology and new processes to be considered and ultimately accepted.”
Ieasha added a tip for those struggling to find an entry point and acceptance to a new approach: “If an organization already has Lean, then bring Design Thinking into the Lean process. You just need the “Ah-ha” moment so you can pull them in. The emotional collateral is needed so people can truly recognize they do not know their customers as well as they thought they did. This can be scary for senior leaders, but you need the excitement of discovery to carry you through the process.” And this is a safer environment to explore before bringing the coveted customers in to get feedback.
How Agile Fits In
But how does Agile fit in this mix? More specifically, how does it vary from Lean Startup? Dan explained that “agile is designed for software development.” And you need a clear strategy and persona before you fire up an agile team.
“Your team needs to know the customer’s pains and to be thinking about your minimum viable product – and then what to test against for the customers you are servicing. In contrast, Design Thinking starts by gaining the understanding of who you are serving, then the pains and how to address them,” shared Ed. Lean offers a more methodical or scientific approach to improve the chances of building a new product or service that people will actually buy and really like. With Lean and Design Thinking, validation from the customer using prototypes or other research needs to happen before finalizing a product or service.
The panelists wrapped by sharing some overarching guidance for listeners to take to heart:
Ed of UnitedHealth Group: “People think you should have all the answers, but in reality the answers lie outside with the customers. Get out of the office and go where your customers are. Show deep empathy for those customers you are solving for. And check out the “Ten Types of Innovation” framework to diagnose patterns and identify opportunities.
Ieasha of LPL Financial: “Pick the best tools for the right time. Rely on your toolbox of Lean and Six Sigma which have been around awhile to execute, and look to Design Thinking for what the customer needs and for capturing the voice of the customer.”
Dan of DentaQuest: “Look internally and externally for passionate people with a voice. These people can help you evangelize and make the shift needed to innovate. Often they need a mechanism to engage their thinking. Are you providing one?”
Check out this hangout webinar “Lean Startup & Innovation: Is It Working?” to hear more.
Do you have challenges transitioning your team from lean to design thinking? We’re happy to help you brainstorm solutions to these challenges if you contact us. Or check out what experts from Stanley Black & Decker, GE, Bose, Eastman, AT&T and more have to say in our “Innovation By Design” hangout series. We have more headed your way, be sure to tune in!