These days, it seems like everyone is talking about innovation and new ways of working. We hear of many organizations “going agile”, sending more people to “design thinking” courses, and trying out “lean startup” practices.
While we drown in these buzzwords, it seems like many people are confused about when to apply these methods. Where do these methodologies make sense? And how do they fit together? Let’s try to make sense of it all.
These modern innovation methods are part of human-centered innovation, which is the discipline of developing solutions in the service of people.
At its heart, the innovation sweet spot is to strive for DESIRABILITY (what customers love), VIABILITY (a sustainable business model), and FEASIBILITY (what is organisationally and technologically feasible), with the accompanying methods mapped as follows:
Design Thinking is a method that solves for desirability. By putting users at the centre of the innovation process, design thinking enables you to explore the opportunity space, and discover unique insights on WHAT will delight your users, so you can be sure that your innovation is going to be adopted.
But how do you know that your innovation will actually make money? This is where Lean Startup comes in to solve for business model viability. By testing various business models with real customers in rapid iteration, you quickly discover which business model survives, and become smart about what to actually build so that your innovation is financial sustainable.
Finally, we have the help of Agile methods to launch an innovation in small and rapid increments. This mindset helps you bring an innovation to market in weeks instead of years, allowing you to get your products and services in the hands of customers faster, before your competition.
It is important to understand that while these methods are complementary, they solve for very different things. Here’s another way to look at these methods:
In the early days of corporate innovation, we observe many companies that adopt agile first, and agile only. They have the agile manifesto plastered on their walls, cross-functional teams that are disciplined with stand-up meetings, a grand KANBAN board, and finally launch a mobile app quickly (relative to corporate timelines), only to be disappointed that no one seems to be using it. This is a classic case of not discovering desirability.
We have also seen a few examples of companies who are supporting a sexy new digital service that is in fact haemorrhaging cash behind the scenes – this is often because their business plans are mere projections made in boardrooms, informed by high-level market trends, without ever going “out of the building” to test if these risky assumptions actually hold up in the real world.
And without agile, we see highly energised innovation teams coming up with the most remarkable prototypes, only to find them getting stuck in corporate bureaucracy, as operational units are too busy with “other priorities”. A couple months later, they see their competition launch something similar, which is a sure-way to kill their motivation to bring up anything new again.
But for companies that master human-centered innovation, the rewards are enormous. Here we see design-led companies outperform others on the S&P by over 200%. McKinsey also has a fantastic report on the business value of design. The best news is that these methods are simple, fun, and provide a framework for repeatable innovation. It has never been easier and more accessible to start investing in these new ways of working.