How to Actually Implement "Lean" Methods at Your Company
It's the oldest, wisest business tip, yet it's one that companies--even smart companies--neglect: How do you solve the crucial problem that your customers and prospective customers want solved?
The metaphors for gauging the job-to-be-done are countless. My personal favorites include:
- "People don't want to buy a quarter-inch drill. They want a quarter-inch hole." --Theodore Levitt, marketing professor, Harvard Business School
- Fast food customers don't really want milkshakes, per se. They want something filling they can gradually consume without making a mess during a long drive. (Courtesy of HBS professor Clayton Christensen's video, "What Job Causes You to Hire a Milkshake?")
- Customers don't want an iron and an ironing board. They want wrinkle-free clothes.
That last example comes from two professors at BYU's Marriott School of Management who are part of the Levitt-Christensen lineage. Nathan Furr and Jeff Dyer have spent much of their time and research anatomizing innovation and so-called "lean" startup techniques--and presenting their findings in affordable, replicable techniques that entrepreneurs can use.
Their forthcoming book, The Innovator's Method (due out September 9), is filled with techniques that can help you define the jobs that customers will pay you to solve. One of them is what Furr and Dyer call an "advice" interview. The authors spoke to me Thursday morning and explained exactly how the method works. Here are its three major steps:
1. Quickly and clearly describe to the customers the problem that you see. The idea is to let the customers know you're not just spitballing--you have researched and recognized a potential pain point. You want to put the customer in a position where they can critique and modify your explanation of the problem. "Don't go to customers with a blank sheet and expect something to happen," they write.
Of course, to be able to describe the problem, you'll first have to spend time observing the customers, taking notes, and asking questions. For example, Mike Maples, founder of Motive, had his founding team spend months observing call centers with stopwatches, recording their findings. They eventually discovered that only 25 percent of the time on each call was spent resolving customer problems. Up to 75 percent was spent gathering customer information, such as who the customer was, whether they had a support plan, and what their operating system was.
Motive eventually reached $100 million in revenues and went public in 2004. But the beginning of it all was Maples' working knowledge of an inefficiency that many potential customers--anyone with a call center--would pay big bucks to solve. Maples' team was not going into call centers and making vague inquiries about what was bothering the managers. His team watched and took notes--establishing a knowledge base from which it could initially articulate the problem.
All of which makes sense, but still leaves one key hurdle for entrepreneurs: How do you get an audience with customers in the first place--especially one where you can sit there, interview them, and take notes?
The authors suggest using the word "advice" in your outreach, whether it's via email or cold call. They've found that "advice" is something like a magic word, putting customers at ease, assuring them that you're only there for information, not as some sales weasel trying to Trojan Horse his way into a desired territory. "Let them know you want to get their feedback on a problem you're trying to solve," they write.
2. Ask your customers if they face this same challenge too, or a different challenge? "This gives you a chance to find out whether customers really have the problem you hypothesized," write Furr and Dyer.
You might think you've hypothesized correctly, but you won't know until you ask. For example, several years ago, ZipDx, a maker of high-quality audio teleconferencing technology, was having trouble closing deals. They couldn't figure out why. They believed, in their heart of hearts, that their amazing audio was solving a big customer headache: the lousy sound on conference calls.
Yet they were wrong. When they finally reached out to customers for advice, the first thing they discovered was that one set of their customers, in particular, was eagerly calling them back: the group of voice over internet protocol (VOIP) service providers. Here's how Furr and Dyer describe it:
VOIP service providers actually didn't care very much about audio quality--what ZipDx thought was the key feature. Instead, they struggled to differentiate themselves with reliable, easy-to-use conference-call software features. As it turns out, the ZipDx software that accompanied the "broadband audio" had other attractive features that allowed users to schedule, join, and manage conference calls far better than most solutions on the market.
You can imagine what happened next. ZipDx was suddenly armed with the knowledge to target an entire new swath of paying customers. Within three days of this finding, the ZipDx CEO closed the biggest deal in company history. It wouldn't have happened, had he not taken the step of asking customers about the company's plausible but ultimately inaccurate hypothesis.
3. Propose a solution--and show your customers a prototype. Mind you, it doesn't have to be an actual protoype. It can be a drawing, a storyboard, a PowerPoint slide. The key is that it gives customers a visual to react to. Any visual representation will allow customers to riff on how they'd tweak the design, for better or for worse.
In fact, a minimalist representation will allow customers to fill in the blanks and steer your design going forward. "You don't want to move too quickly," Dyer said in the joint interview. "Instead, you want to be very open-ended up front."
I asked both authors for examples of minimalist prototypes they've encountered in their research and teaching. Furr cited the work of his former students at BYU, who founded the Owlet Baby Monitor. The monitor, a "smart" sock which monitors your baby's vital signs, is a high-tech product. But when initially seeking customer feedback, Furr's students used a bare-bones visual representation that they created in 30 minutes: a PowerPoint slide with a picture of the not-yet-made product. "Then they printed it out on a color printer, stood outside Babies 'R' Us and talked to people," Furr recalls.
The upshot is, you need not obsess over your prototype. An average prototype today is better than a perfect one tomorrow. Innovation guru Scott D. Anthony, a managing partner at Christensen's Innosight consultancy, has called this the art of building a MacGyver prototype: homemade and inexpensive. All you are creating is a physical representation of your idea--something that can be damaged and quickly remade. Not a guitar, but nails, wood, and rubber bands.
In short, you just want to create an in-the-flesh illustration, so you can more easily explain your idea to others--and make sure it eventually exists outside of your head.