 "<b>Book Extract:</b> Test your assumptions")
Several decades ago, IBM wanted to test an unusual solution to a common customer problem: transforming spoken words into type. A team of computer scientists and executives envisioned highly sophisticated voice recognition software that would transform dictation into text. In addition to the core software, the solution would require high-quality microphones and an adaptive algorithm to parse differences in dialect and diction. Although the technical risk seemed high, the team believed that if it could overcome the technical challenges, it would solve a huge customer problem.
But before it made a big investment, how could IBM test whether customers cared about the solution? At a minimum, it seems that some primitive beta software would be needed to test whether the solution would be worth building. Instead, the IBM team hung a sheet across a room, and, when the customer spoke, a hidden typist on the other side of the sheet captured what was said and projected it on a computer screen for the customer to see. Essentially IBM 'pretended' to have the solution to answer the question, 'Do customers care?' Like IBM and the Google Glass team, most successful managers use virtual prototypes (VPs) - 'pretend-otypes' - to answer key questions while avoiding the costs of developing expensive, unwanted solutions.
To develop a VP, ask yourself a simple question: If I had to sell the solution today, how could I fake it in a way that feels realistic? The answer should be a good guide for what you could develop and how fast. Our favorite VPs use PowerPoint, sketches, off-the-shelf components, or other mock-up tools. For example, PowerPoint can mimic software by creating invisible click-through hot spots to quickly simulate what might take months in development. Similarly, Kaiser Permanente faked various service innovations through a combination of storyboards and rehearsed service simulations. One observer said, "There's something magical about low-fidelity ways of trying something out. It automatically allows people to feel like they can put their fingerprint on it. The more polished, the more people feel like it's already done."
Whatever tool you use - including advanced tools like 3-D printers, video, or flash demos - remember that all prototypes should be designed to answer specific questions. Your VP will likely be an imperfect representation of the product, but the goal is to start answering your key questions, or hypotheses, about what customers want. By doing only the minimum to get feedback on the most relevant uncertainty you face, you speed up your learning and preserve your flexibility. The ability to learn quickly through prototypes may be your most important advantage over slower rivals. In the words of one innovator, "A chess novice can defeat a master if moving twice each round."
Minimum viable prototypes
When someone at social gaming giant Zynga has an idea for a new game, no one starts the process by building the game. Instead, the team members boil the idea down to five words and perform a smoke test to see whether there is any customer interest. For example, suppose someone has an idea for a game about running a hospital. She would put up a low-cost ad on a high-traffic web page that simply says, "Ever fantasize about running a hospital?" The users who click on the link receive a brief description of the theoretical prototype and are told they will receive an e-mail when development is complete.
If the ad produces enough response, Zynga designers then spend a week or less building a minimal, stripped-down version and launch it to the e-mail list. Then they see what they can learn about the solution: How many users sign up, how long they play, what features they like, what they hate, and so on. This one-week test helps them learn crucial lessons about what customers actually want and guides them in deciding whether to perform another iteration or go explore different ideas.
THE INNOVATOR'S METHOD: BRINGING THE LEAN START-UP INTO YOUR ORGANIZATION
AUTHORS: Nathan Furr and Jeff Dyer
PUBLISHER: Harvard Business Review Press
PRICE: Rs 1,095
But before it made a big investment, how could IBM test whether customers cared about the solution? At a minimum, it seems that some primitive beta software would be needed to test whether the solution would be worth building. Instead, the IBM team hung a sheet across a room, and, when the customer spoke, a hidden typist on the other side of the sheet captured what was said and projected it on a computer screen for the customer to see. Essentially IBM 'pretended' to have the solution to answer the question, 'Do customers care?' Like IBM and the Google Glass team, most successful managers use virtual prototypes (VPs) - 'pretend-otypes' - to answer key questions while avoiding the costs of developing expensive, unwanted solutions.
To develop a VP, ask yourself a simple question: If I had to sell the solution today, how could I fake it in a way that feels realistic? The answer should be a good guide for what you could develop and how fast. Our favorite VPs use PowerPoint, sketches, off-the-shelf components, or other mock-up tools. For example, PowerPoint can mimic software by creating invisible click-through hot spots to quickly simulate what might take months in development. Similarly, Kaiser Permanente faked various service innovations through a combination of storyboards and rehearsed service simulations. One observer said, "There's something magical about low-fidelity ways of trying something out. It automatically allows people to feel like they can put their fingerprint on it. The more polished, the more people feel like it's already done."
Whatever tool you use - including advanced tools like 3-D printers, video, or flash demos - remember that all prototypes should be designed to answer specific questions. Your VP will likely be an imperfect representation of the product, but the goal is to start answering your key questions, or hypotheses, about what customers want. By doing only the minimum to get feedback on the most relevant uncertainty you face, you speed up your learning and preserve your flexibility. The ability to learn quickly through prototypes may be your most important advantage over slower rivals. In the words of one innovator, "A chess novice can defeat a master if moving twice each round."
Minimum viable prototypes
When someone at social gaming giant Zynga has an idea for a new game, no one starts the process by building the game. Instead, the team members boil the idea down to five words and perform a smoke test to see whether there is any customer interest. For example, suppose someone has an idea for a game about running a hospital. She would put up a low-cost ad on a high-traffic web page that simply says, "Ever fantasize about running a hospital?" The users who click on the link receive a brief description of the theoretical prototype and are told they will receive an e-mail when development is complete.
If the ad produces enough response, Zynga designers then spend a week or less building a minimal, stripped-down version and launch it to the e-mail list. Then they see what they can learn about the solution: How many users sign up, how long they play, what features they like, what they hate, and so on. This one-week test helps them learn crucial lessons about what customers actually want and guides them in deciding whether to perform another iteration or go explore different ideas.
Reprinted by permission of Harvard Business Review Press. Excerpted from 'The Innovator's Method'. Copyright 2014 Nathan Furr and Jeff Dyer.
All rights reserved.
All rights reserved.
THE INNOVATOR'S METHOD: BRINGING THE LEAN START-UP INTO YOUR ORGANIZATION
AUTHORS: Nathan Furr and Jeff Dyer
PUBLISHER: Harvard Business Review Press
PRICE: Rs 1,095
| Uncertainty is the hotbed from which all new growth emerges: Nathan Furr |
| Large companies sometimes fail to innovate because they prefer to leverage their existing systems rather than build new capabilities. How can companies get around this such thinking? Most established companies approach innovation in the same way as they manage the execution side of the business: execute the best, profit-maximising plan at scale, without error. But innovation is full of uncertainty, which turns the best of plans into guesses and turns execution into wasted resources. There are good reasons to leverage your existing systems and capabilities to innovate. Companies should do this. But if this is all they do, they will quickly fill up all the space in their market and be left with little growth. We all know this to be true but somehow we find it difficult to go outside our normal zone and try something different. Why? Because it involves uncertainty. But uncertainty is the hotbed from which all new growth emerges. Therefore, I recommend companies find a way to entertain some uncertainty by putting acceptable boundaries on it and allowing it to flourish. As you explain in the book, companies should first prototype the minimum 'awesome product' to test their assumptions before building a product. However, using prototypes can be a tricky process… The first rule of thumb is that every prototype answers a question. Therefore, when you are in the early stages, before you develop the minimum awesome product, we advocate using a large number of 'virtual prototypes' to test the different combinations of 'job to be done' and solution. Virtual prototype is nothing more than a drawing, a representation in clay, or a PowerPoint. Each virtual prototype can capture an 'element' of the solution. Use this to match different solution elements to the needs of customers. You will find that it is one or two features that makes all the difference to the customers. Hence, don't swamp them with features. Once you begin to find that match between a need and a feature, you leverage the minimum viable product to try and develop a working solution and then finally you use the minimum awesome product to make sure that you delight customers on that one feature that truly drives a customer purchase. Nathan Furr Assistant professor, Marriott School of Management, Brigham Young University |