A whopping 90% of new ideas fail, according to consulting firm Fahrenheit 212. To see better odds of success, companies should consider adopting the Lean development process to better understand customers and get ideas in front of users more quickly, according to Chris Howard, CIO of Slingshot, a mobile-based software and product development company based in Louisville, KY.
In a session at the 2018 Code PaLOUsa conference in Louisville, Howard explained how the Lean process can help companies get to market sooner and take on less risk.
The high failure rate of new products is often due to the fact that "companies often focus on the 'wow' rather than the 'how,'" Howard said. Take the Snapchat Spectacles, which came out in 2017. As it turned out, only 0.08% of Snapchat users bought them, and even those that did stopped using them quickly, Howard said. It turned into a $40 million loss for the company, as thousands of the Spectacles now sit in warehouses.
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Slingshot does consulting work with a number of organizations, including PetFirst Pet Insurance, Texas Roadhouse, and the Lurie Children's Hospital of Chicago. In this work, a number of common challenges arise, according to Howard. These include minimal involvement from the customer, wasted resources on unnecessary features, and an envisioned solution that does not solve the problem. Companies also tend to celebrate time and budget successes rather than actual outcomes, Howard said. They tend to have a lack of resources to fix poor solutions as well.
Slingshot encourages companies to consider Lean development as an alternative. "I would describe Lean as a way of thinking," Howard said, and less of a method than agile or scrum. It is centered around engaging with customers and building a minimum viable product (MVP), he added.
Using lean means that during projects, companies take a number of steps, that include engaging and learning from the company and its customers, measuring success, and testing and adjusting early and often, Howard said.
Success may end up meaning that you don't actually build the solution, Howard said.
"At the heart of Lean, you have to be okay with failure," Howard said. "In the corporate world, that's a challenge. You have to adjust your processes to accommodate that."
Highlights of the Lean process
Highlights of the Lean development process include an early, continuous focus on user value, and a hypothesis-driven approach, Howard said. Companies must produce an MVP, and validate what they learn from releasing that product. It's all part of a build, measure, learn loop, that allows for adaptive, collaborative work between CIOs, product owners, designers, and developers.
Before beginning a Lean development project, Slingshot consultants do field research. This means observing a workplace's processes, environment, tools, and employee attitudes and feelings. To accomplish this, the company sends a two-person team to conduct interviews with individual employees: One to ask questions, and one to write down or record answers. These interviews generally last for under an hour, and allow for more honest, valuable feedback than a large group interview would, Howard said.
Most software development projects cost at least $250,000, Howard said—and he's seen them go over $10 million. Companies need to justify spending that money by implementing strong metrics that are easy to measure, quantifiable, actionable, and predictive, Howard said. This goes beyond something nebulous like "customer satisfaction" and into something more specific, like "units processed per person per day," or "new user scquisitions per day."
When doing user testing, a company must observe a user's natural workflow with the product or service—and make sure not to lead the user by telling them where to click or describing what they are seeing. That creates a need for a user manual, when you want to build something intuitive, Howard said.
At the heart of Lean is the creation of the MVP, Howard said. "It's your fastest way through the build-measure-learn loop with something that provides value to the customer," he said. Companies can go one of two ways on this: Building a product with minimal features that you put into the market, measure feedback, and improve it; or creating a landing page, app, brochure, introductory video, and email signup list, and gauge interest there.
Companies can apply Lean principles to new product ideation, new services, their marketing strategy, and internal workflow improvement, Howard said.
The key benefits of Lean development include:
1. Learning quickly
2. Measuring real customer behavior, rather than focus groups
3. Becoming closer to your customer
4. Focusing on actionable metrics
5. Becoming comfortable with pivoting
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Alison DeNisco Rayome has nothing to disclose. She does not hold investments in the technology companies she covers.
Alison DeNisco Rayome is a Staff Writer for TechRepublic. She covers CXO, cybersecurity, and the convergence of tech and the workplace.