We’ve all heard about the Lean approach to creating a startup, launching a product and solving customer pain points. But it is seriously something else to think in terms of a large company doing it, and not just a small experiment in a quiet corner but as a company culture across its core and non-core functions!
Last evening, Scott Cook of Intuit conducted a workshop where a small select audience interactively explored much deeper the nuances of the lean experimentation mindset.
So what does it do for organizations (and of course, for startups)?
Be Right more often. Quicker.
Intuit soon realized that market research, focus groups and other theoretical methods of arriving at product and business decisions could be as wrong as they could be right.
And often times, in such a case it is just the highest paid opinion that wins.
Obviously, experimenting it with real users in real life situations got the most relevant responses and led to the most successful products. In one particular lab-test, ALL users rejected an option that almost 60% users eventually picked in a real life situation!
Sometimes, a great outcome of experiment driven decision is the unimagined, unexpected inputs from the market as expressed through these tests. And these often become visible when the original hypothesis fails!
Lean experiments have to be lean. 2 week cycles, 404 pages, fake screens on live apps that merely exist to gauge user preferences in the real world – these are some innovations that help achieve this. There are many instances of product teams first manually ‘faking it’ behind the interface of an automated service – Intuit tried this too to test the response to their Fasal product for farmers in India.
Done right, this sure beats expensive and ineffective market research, and even more expensive product development that may need to be thrown away.
Harnesses Entrepreneurial Energy And Risk Taking
The biggest risk for many product teams and companies is that everyone just plays too safe. The decisions are left to a few, and most just continue to hide in the cracks. You can’t be wrong if you’re not trying anything.
The experimentation approach to product and business development and decision making create space for entrepreneurial minded folks to stick their necks out and try out new ideas, products, features that could open up a big market for the company.
And it’s a great hiring strategy if you’re keen on getting and retaining the best folks.
The Role of Leaders
The biggest impact is on decision making. It’s a huge cultural shift for the leaders to let go of decision making (‘except in emergencies’ – as Scott emphasized multiple times) – indeed most have grown up on the ‘fact’ that leadership is primarily about being decisive!
But in truth, with this approach leaders can actually breathe easy that they are not required to be superhuman and perfect all the time! They instead need to play the role of a coach, enabler and help lay out and manage the policies and culture that encourage cheap, quick, relevant experiments and ensure that these are data driven.
Of course, this big a change is also scary for some leaders and managers to abandon their traditional role and play in a more equal field. Toyota ensures that the ideas from leaders are subject to the same kind of experimentation and validation that ideas from anyone else in the company would need to go through. Intuit is built around the same philosophy.
Even tougher is to take away the downsides, and fear of failure from the whole team. This is very deeply ingrained in a culture that lives for the appraisal cycle, and where the admission or being wrong is something to fight back against, and the possibility of doing so to be avoided. Visibly ensuring that the focus is on learning from mistakes, and indeed encouraging those who made them and learned to experiment more, can help mitigate this mindset to a great extent.
Intuit actually goes as far as to incentivize a few top experimenters – and part of the incentive is to take a few weeks off their day job to pursue something!
There were other insights Scott touched upon that are worth considering.
Core competence is limiting
As long as you are attacking real pain points with solutions you’re equipped to create, and where you have durable differentiators, restricting yourself through the notion of a core competence can limit what you can do for the market.
Be restricted only by the needs, and the opportunity to exploit or extend your strengths, not artificial constructs of any kind.
Experimentation without measurement against a clear, precise hypothesis is merely a random shot in the dark. If you succeed, you won’t know why, and worse, if you fail, you’ll have learned nothing for the future and definitely not recognize surprises that the market might be suggesting to you.
Experimenting doesn’t eliminate Judgement
Even as the team and company move towards experimenting more freely, judgement still plays a role, and leaders need to figure out even the unpopular ideas that might need their support and protection. There’s the determination of how much cost still keeps the experiment “cheap” vis-a-vis it’s impact on the market and the top/bottomlines. And most importantly, the decision around when to call it quits.
It’s an art that gets better as it’s practiced, not something that can be bound in rule books right from the word go.
We hope to see many more organizations and teams embrace this as a philosophy and approach to creating products and solutions. Workplace cultures, business outcomes and positive leadership can all benefit from this very open minded culture of experimentation.
Try it out!