Lead Change from the Top – PART 1
In this 3-Part series I’ll share key take-aways from a recent keynote address at the Australian Institute of Company Directors, covering much of my work with universities and organisations.
There was some important research published by Simon – Kucher and Partners in 2014 (and Strategyzer and 100firsthits.com) where they looked at the top 10 business mistakes, with #1 being actually building the wrong thing, building something no one wants. It’s not hiring the wrong people, or lack of focus, or failing to execute sales and marketing. All of those things are key, however the number one mistake is building something no-one wants.
The number one business mistake = building something no-one wants.
Companies are constantly developing products and services to launch into the market. However, around 72% of new product and service innovations fail to deliver on customer expectations (Simon – Kucher and Partners 2014). Or you can say that customers don’t care about 7 out of 10 new products or new services introduced to the market.
Lean thinking, in Value Proposition Design and Business Model Design, is a customer-centric method for the design of new products and new services. Design Thinking is a method for practical, creative resolution of problems incorporating the strategies designers use during the process of designing (Wikipedia definition). The key feature with Lean / Design Thinking from a business perspective is that it is now used very effectively in the design and validation of problem solution fit, product market fit, value proposition design and business model design.
Leading the work in this field are Alexander Osterwalder and Yves Pigneur authors of “Business Model Generation” and “Value Proposition Design” (with co-authors Greg Bernarda and Alan Smith). Other important references are Eric Ries with his book “The Lean Startup” and Steve Blank with his book “The Startup Owner’s Manual”. These books are all great references for looking at how you can validate problem solution fit, validate product market fit, design new business models and validate those business models and value propositions before embarking on taking products or services out into the market.
Using this method and the frameworks, and doing the work, allows you to understand the customer deeply, as well as identifying the early adopters and innovators in your market. You can greatly enhance the launch of a new product or new service in this way. It can also, and usually does, significantly reduce risk to your organisation or company.
Alexander Osterwalder and Yves Pigneur with their book “Business Model Generation” have described a visual design tool to design and test business models in a ‘business model canvas’, and with “Value Proposition Design” have described a visual design tool to design and test value propositions in a ‘value proposition canvas’.
Through the work that I do with CSIRO, universities, organisations and companies across the country, I translate and witness this methodology in action. These workshops are designed to focus on team work, understanding the customer, problem discovery, value proposition design, validating and de-risking, taking new products and new services out into the market, and maximising the impact of publicly funded research.
In these workshops, we use the above-mentioned frameworks for visualising and testing the assumptions that we have about the customer. These frameworks are central to the teaching and learning. A development team can use the value proposition canvas to articulate all the information they have on the customer; what they believe is the job the customer is trying to get done; the pains and gains that the customer has. This allows the development team to design a product or service that truly serves the customer.