The Lean Startup

“The only way to win is to learn faster than anyone else.” 

-Eric Ries

The Lean Startup is a must-read for anyone interested in combining agile principles with human centered design. In his book, Eric Ries defines a startup as an organization that’s dedicated to creating something new under conditions of extreme uncertainty. This is applicable for any company, not just one at the earliest stages of its journey, which is why this book has sold so many copies to people at companies of all sizes. A lean startup marshals its scarce resources as it iteratively pivots, as many times as necessary, until it finds the right combination of target customer and the right value proposition. The key is to get fast feedback without over-investing in more than is needed to decide whether another pivot is needed. This is equally true for larger companies, which can invest hundreds of millions of dollars in customer experience, and benefit from the same disciplined approach to ongoing experimentation as lean startups.

Human centered design (HDC) practices are key to better understanding customer needs and designing the right minimum viable product (MVP) to test customer interest in your value proposition. Developing personas and building valuable insights for them along the customer journey is key to creating the right spark of inspiration for where to focus for your MVP. Just as importantly as the toolkit for HCD is continuous listening to capture customer data signals and determine whether a pivot is needed. To make this most effective, your voice of the customer (VOC) listening approach needs to probe into specific attributes of your customer value proposition, not just overall customer satisfaction or your net promoter score. One valuable take-away from The Lean Startup is that you can focus your investment as you capture this feedback, combining HCD principles with greater enterprise agility.

Dominoes made the shift from being a pizza company that sells online to an ecommerce company that sells pizza. Like a lean startup that’s a digital native, Dominoes tests new experiences on an ongoing basis. Agile practices are core to successful ecommerce businesses as they conduct experiments across the cohorts that arrive at their site, isolating whether the value proposition resonates with a particular target customer. Ecommerce companies naturally work in short sprints, experimenting for how they drive traffic, how they convert desired behaviors, and how they sustain engagement and boost customer lifetime value. Each sprint has a clear “definition of done” and what they are testing. Just like an ecommerce native, a larger company emulating the practices of a lean startup lays out a roadmap, then works in a series of sprints to achieve milestones along the roadmap, while ensuring that they capture fast and regular feedback along the journey. Ideally their sprint retrospectives and planning for upcoming sprints includes insights that combine experience data (e.g., surveys and AI-driven text analytics of unstructured data signals from platforms like Qualtrics) with operational data from their systems. They then decide whether to pivot or persevere along the roadmap.

Another key insight from the book is that you can launch a value proposition before you do all the work to ensure a smoothly working back-end to enable and scale the customer experience. After all, why invest all the money into integrating the technology and building out the organization before you know if a further pivot is required. Working with a “broken back-end” is not viable for too long, as the savings from testing an MVP will be outweighed by the costs of complexity, but this can be a useful approach to gather fast feedback in some cases.

In my own experience working with clients, I’ve found that there’s a pragmatic balance to be struck here. What often works best is a bi-modal approach, where you apply lean startup principles to your innovative, bold bets and drive continuous improvement for your brilliant basics, even as you make larger investments in your data and tech-enabled customer journeys. You can then filter your priorities on your broader roadmap based on the value and ease of execution for specific CX opportunities and take a lean startup approach to test them out. Think of every CX opportunity that you are considering on your roadmap as having a green, yellow, or red score. Green opportunities can be pursued more quickly using out-of-the-box technology and with minimum changes required to your business processes, data, training, or other constraints. Yellow opportunities can be pursued but with some workarounds, so you can’t do too many of them at once without overwhelming the organization. For things that are red, you either need to wait for the organization to be more ready (e.g., after a major technology implementation is further along or the capabilities and costs of the technology improve or fall), or you need to break them down into more manageable chunks that are yellow instead of red. You can then work in agile sprints on the green and yellow opportunities in your roadmap, applying all the best practices of a lean startup.

For a selection of some of my own articles on related topics, including some written together with colleagues from the Katzenbach Center, head over to this page on our website.

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