As recently as 15-years ago, most markets had few competitors and significant barriers to entry. Management would decide what product to build, budget the work and assign engineers and developers to the project team. New product development projects would often last for many years. Similarly, companies providing services would keep an eye on market competition and take the long-approach for releasing new offerings, often protected from competition by regional control and deep reputation.
Today, the internet, open-sourced solutions, and social media have leveled the playing field. Consumers have one-click buying options for new products at their fingertips. New internet-based services disrupt long-standing businesses such as taxi transportation, insurance, legal services and healthcare. Customers will switch quickly and often to better solutions. Every day our world continues to become more complex.
This new reality has already affected many companies both large and small. Over half of the Fortune 500 companies from 15 years ago have failed to adapt and have been purchased, merged with others, or are no longer in business.
Successful companies today must move to a more flexible, faster model – an approach which is a synergy of Lean, Agile, Design Thinking, Innovation Engineering, and Lean Startup concepts – that we call ‘Lean innovation’.
Lean East helps organizations bring innovative products and services to the market to maintain their competitive edge and keep a focus on customer value. Our process focuses on experimentation to quickly learn who your customers are and what they value. In today’s complex and changing world it is hard to know what customers will like about your innovation. The goal must be on learning what customers value in the fastest and least expensive manner. We help organizations do this using tools and concepts from several disciplines including:
- Ideation brainstorming techniques popularized by Design Thinking to support forming an initial product/service concept
- A simple, one-page Lean Business Model Canvas for clarifying how you will market and distribute the product or service to profit from the innovation
- Creation of a Minimal Viable Product (MVP) to test an aspect of the product or service
- Plan, Do, Check, Adjust (PDCA) thinking with a focus on taking action! (Learn more by reading our Ready…Fire!…Aim blog post).
- Lean Six Sigma tools to help the learning ‘Flow‘ and ensure you address ‘Root-Cause’ needs
- User stories, sprints, and scrum concepts from Agile support the development process
In this fast-changing and uncertain world, you must learn what customers value (and will pay money for) versus what they do not value.
The Beltane Story
I learned the benefits of Lean innovation principles the hard way. I was the co-founder of Beltane Solar, a solar energy start-up, in 2011 with a highly efficient and innovative method for harnessing solar energy. We used principles of engineering and physics to confirm the science behind our innovative design. Our team then studied existing patents and found several claims to make for our new technology. After filing for a patent we spent the next two years building and testing our proof-of-concept design. Only then did our founding team become exposed to Lean innovation ideas and begin to talk to potential customers.
We soon realized that our customers were not end-users but rather solar installers who would want to buy our product at a discount. We talked to several installers in the large California market and found that they were unimpressed; our innovative design made installation much harder for them. Our innovation was never going to make money.
The realization that our grand innovation was doomed came several years and many thousands of dollars too late. We could have avoided the loss of time and money if we had talked to customers and learned from them earlier. Product development is the wrong idea; the focus should be on customer development.
The goal of Lean innovation is experimentation to learn what customers value
Sharing the benefits of Lean innovation
Over the next several months Lean East will be focusing our blog on concepts of Lean innovation that apply to clients at the product and service based organizations we support. We will also be speaking about Lean innovation at several events in New England on the topic of Lean Innovation.
Applying Lean to the process of innovation will result in more experimentation and faster learning. You will learn to focus more on providing customer value and less on developing the product or service.
Please share your comments on areas you want us to focus on for further posts.