Create Value With the Lean Innovation Management Process

Products and services, projects, and processes all need to add value to be strategically viable. This applies regardless of the type of organization – small, medium, or large company; startup; government entity; or non-profit.

Lean innovation management originated from startups, but is applicable in helping bring a startup mentality to a variety of types of organizations. Let’s start be defining lean innovation.

What is lean innovation, and why is it important?

Customers may know what they want – but often do not. They may simply not know what is possible. Or their imaginations fall short. Or too many people out there tell them that something is not possible.

It is not just a matter of gathering requirements. The challenge more and more is not “How?”…but “What?”.

In other words, customers may need help getting what they want…but increasingly need help discovering what they want.

When there is already a product or service that customers are using, it is normal to expect improvements. That’s’s one type of innovation.

However, in large part because of advances in technology, breakthrough thinking can lead to products and services where previously there were none. That is the domain of lean innovation.

What is Lean Innovation Management?

Managing this process of figuring out what the customer wants – in such a way that it is economical, business building, efficient, and highly productive – is what lean innovation management is all about. It incorporates a number of popular processes that have been practiced for some time.

• Agile – Short duration time cycles, such as sprints and iterations, are employed to engage directly with customers, gain experience and knowledge while building a tangible product, and obtain rapid feedback.
• Lean – The emphasis is on efficiency, since neither you nor the customers know yet what they want. Low costs are required until this becomes clear.
• Design thinking – Walking the customer through alternatives from any different viewpoints is a premium skill. Short term failure is allowed, and creative thinking to drive toward ultimate success is critical.
• Customer development – Working with real customers is the only way to do this, and the process includes business building, with real live customers.

The process to the right illustrates at a high level what lean innovation management is all about. It is all about iterating, innovating, and improving…and then doing it all over again in a series of rapid cycles. The idea is to rapidly progress toward what the customer wants, efficiently and effectively.

In the process, you

1. Accelerate cycle times – Using an agile approach, how can you iterate through cycles of discussion and delivery in as short a time as possible?
2. Focus on customer wants/needs – How can you gain – for the team and the customer – an increasingly deeper understanding of what the customer really needs and wants – that will help ‘get a job done‘ for them?
3. Scientific approach for decisions – How can this process be codified and executed in a disciplined way for reliable results, including questions answered and results delivered?

Let’s explore in more detail what this process might entail.

What the specifics of a lean innovation management process?

Below is a sketch of a lean innovation process that seems to capture all of what we have discussed so far.

The process starts with a vision – a holistic one that not only includes the product itself but the marketing behind it and the operational support required to deliver and support it. The vision is shared across this group of stakeholders.

With a clear shared vision in mind, the process moves through three distinct phases:

• Devise experiment – In the most concise terms possible, form a hypothesis and experiment to prove or disprove it. The experiment can address any and all stakeholder concern(s). It needs to be specific enough that it can achieve a certain answer to the burning question.
• Implement rapidly – Speed is of essence, because the question may change, the attention of the customer may become distracted, and resources may get diverted.
• Validate learning – With results in hand, communication across stakeholders for feedback is crucial. It is an extended team effort, and all stakeholders need to be on the same page.

Results of each iterative experiment need to be digested and incorporated into change actions on the part of each of the major business functions – product development/engineering, marketing, and operations. Not only is the product recalibrated for the next experiment, but the whole organization is recalibrated.

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Lean Innovation Management: A New Kind of Project?

On the surface, this appears to be another agile project. However, it goes deeper.

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Is it a project? Or is it a program? Maybe it is even a portfolio of coordinated projects. In any case, here are five unique factors that make lean innovation different:

1. Disruptive and incremental innovation – Lean innovation definitely includes both types of innovation. With a definite startup orientation, whether entrepreneurial or intrapreneurial, the starting point is where there is no incumbent solution. That makes it disruptive. However, with a continuous innovation mindset and disciplined process, it involves frequent incremental improvement to the disruptive product or service.
2. Cross functional – As illustrated above, lean innovation management cuts across business functional areas. It is not just about the product or service, but also the supporting functions led by marketing and operations.
3. Financial viability – The ‘lean’ nature of lean innovation management supports the need for financially viable execution. Somehow the project needs to sustain itself. It needs to validate concepts before spending much money. And it needs to be accountable, at a minimum, to answering questions in no uncertain terms as part of its value proposition.
4. Builds customer relationships – Part of the financial viability involves finding real customers. Each experiment needs to include some element of customer building, whether validating an idea, eliminating a possibility, or further cementing a customer relationship.
5. Builds a business – The end result of lean innovation management is holistic. The end result should actually be a viable business, proven not only in concept but in practice. The pieces should be in place: customers, organizations, business functions, products/services, and a financially viable business model.

Most projects, programs, and portfolios include the breadth of doing all of those things. But these things very much draw on the broad skill set of project management. The disciplined process of a professional project manager is a very visible overlap between lean innovation management and project management.

Ideas for Action

In this day and age, it only helps for people in any organization to think like a business owner and entrepreneur. The benefits are significant. Here are five very apparent benefits:

• Builds enthusiastic teams
• Drives results
• Minimizes waste
• Produces value added innovation
• Builds more interesting and marketable skill sets

For more resources, I encourage you to read a most interesting and stimulating book, “The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses” by Eric Ries. In addition to the book, Eric maintains an official website about his continuing work in this area, including a blog, videos, slides, and audios.

 

The following is a video summary of Eric Ries’ book, “The Lean Startup”: