“The only way to win is to learn faster than anyone else.” ― Eric Ries
I think it’s pretty typical that if we’re unsure of something then we tend to avoid it. Or, if we feel it’s really important, we may cautiously dip our toes in to see what happens. For example, I know a lot of Business Owners who feel marketing is really important but don’t feel they have the know-how to do it effectively. Some tentatively try different approaches hoping that it’ll make a difference but they frequently end up being frustrated with the results. And, since they don’t see the point of pouring a lot of money down the drain, they typically only invest minimally. The options seem to be: Go big or go home, or go slow and be left behind. But the truth is that both are risky. Are there other options? I think there may be.
I recently read “The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses”, by Eric Ries. The premise is how to effectively and efficiently innovate using lean methodologies. It was intriguing because my thinking is that lean innovation is an oxymoron. You can’t be efficient and “creative” at the same time but I also think Eric Ries ideology’ makes sense; that innovation can and should be “managed”. That while “learning” efficiently is challenging, there are ways to reduce uncertainty and it can be done in a lean manner by developing and testing what he coined “Minimum Viable Products “(MVPs). MVP’s are products or services produced quickly with minimal resources in small batches. One example he used was setting up a prototype on- line concierge service. The MVP was done using a staffed, fully manual call centre to “test” the idea. The plan was that if it worked, then they’d expend the resources to automate.
And while Eric’s book is mainly focused on developing a Business’s primary product or service there’s little doubt that his methodologies can be applied more broadly. The caveat is that some Business Owners try to make up for their lack of a good product or service by thinking everything can be solved with good marketers or sales people. You can’t sell your product without these kinds of resources but you also can’t make up for an inferior product or service by trying to make it seem desirable or needed if it’s not. So how do you know you’re succeeding? Most Business Owners would argue that as long as you’re making money it’s all good but the problem with that is it’s a historical perspective. There are no indicators that you’re on the right track moving forward. For that you have to understand how your customers believe your product and service is helping them to accomplish their agenda versus your competitor’s products and services. And the only way you can do that with confidence is by proving it which means metrics and statistics; paired comparisons, etc.
“Not everything that can be counted counts, and not everything that counts can be counted.”Albert Einstein
“There are no reliable proofs for feelings.” Annette Simmons
What’s intriguing about this is something Annette Simmons writes about in her book, “Whoever Tells the Best Story Wins”, and that is that people have a tendency to try to reduce risk by trying to measure issues when they aren’t readily measurable. She hypothesizes that people try to resort to data when it’s actually much more effective and compelling to tell stories. She argues that objective data can be used to prove hypotheses but when issues involve trust, loyalty, faith, respect, engagement and inspiration that learning is typically best accomplished by using metaphors or storytelling.
Annette Simmons argues that Storytelling is particularly apt when there are conflicting values. Most organizations can relate to the struggle of valuing effectiveness versus valuing people. At what point is it appropriate to fire someone? It’s impossible to measure and what’s right for one Business isn’t necessarily right for another. Jim Collins argues that if someone doesn’t fit into the culture and share the organization’s values, then they should be “ejected ... like a virus”. I don’t think he’s wrong but what if the employee is considered marginal? If it’s about achieving excellence then marginal likely won’t be considered good enough but it depends on why they’re considered marginal. If it’s because they generate conflict, some will desire to eliminate conflict to optimize efficiency, others may value the diversity and feel better decisions result from it, somewhat like a bipartisan government. If you wanted to use the measurement paradigm, you could use GE’s methodology and rank everyone and then get rid of bottom 10%. They believe this increases their performance but you could argue that it also fosters a healthy dose of fear which can be counterproductive if people spend valuable time trying to manage it. Does it make sense? Their success would suggest so. Regardless, it’s always about looking at things in new and different ways which is a form of learning.
But what is innovation if not the development of hypotheses? And if you can “prove” a hypothesis it obviously makes sense to do it sooner rather than later. If you’re a Drug Company being able to produce a new drug (innovate) and prove its viability, is what it’s all about, as with any medical hypothesis or treatment. We expect a certain amount of due diligence in determining cause and effect. The difference is most businesses don’t have the same resources but it can still be done but requires what Eric Ries terms actionable metrics that are typically based on customer engagement. He terms things like ROI “vanity metrics” because the link between cause and effect may not exist, especially during the development stage and if it doesn’t, then it’s not a good predictor of future success. So, not any measurement will do. The metrics have to demonstrate the desired outcome which is most often some form of customer engagement.
I think a common mistake is to assume that where leads are currently coming is an indication of where the best opportunities are for them to come in the future. It’s not necessarily so. For example, a website might not be generating a lot of leads but it’s quite possible that with some investment and work it might generate more. It depends on the business but you’ll never know if you don’t explore it and track it.
In Summary:
· In order to develop viable hypotheses of what will work, you must understand what is of value to the customer; which can only be accomplished by talking to the customer. (Hint: asking them what they want isn’t effective. A much better question is: “What are you trying to accomplish/get done?”)
· To prove a hypothesis you must have some meaningful way to measure it that correlates strongly with customer response.
· To learn you must prove/disprove hypotheses.
· To effectively innovate, you must figure out/learn what works.
· To survive and thrive, you must innovate.
