Innovation – everyone is talking about it, everyone wants to do it, yet most of the start-up clients we talk to struggle to implement it.
As business and customers expect better services, both entrepreneurs and progressive organisations see innovation as a top business priority. However, most people think of innovation as a random process, which is pulled out of thin air and does not need to be managed or formalised.
This is essentially wrong and various theories and books have been written to refute this common idea. As a start-up or as an organisational incubator, there is a better way…….
The Continuous Innovation Method
LEAN STACK is a leading provider of Lean Business Modeling tools, content, and coaching resources that are used by thousands of entrepreneurs, and innovators. The organisation was set up by Ash Maurya who developed the Lean canvas which is used at the start of the journey of developing a product i.e. innovation.
As the name suggests, Leanstack and the Lean Startup methodology are closely related although different, both are aimed at newly created companies that go through initial periods of high uncertainty and need to quickly iterate solutions to improve their understanding of the external market and customers. However, the Leanstacks concepts take this further by providing two-pronged approaches by focusing on building the business model, testing assumptions and then scaling via traction.
The Continuous Innovation Method defines a three-step approach to deliver repeatable business models faster:
- Document Plan A – Firstly, we need to capture our initial business model on the Lean Canvas. This takes the ideas out of our heads and moves them to a tangible form that can shared. (The numbers on the below state the order to be completed).
- Identify riskiest parts – Instead of looking at the easiest parts, focus on the elements that can make or break your business model.
- Test – Get out of the building and gain feedback with real users
- Iterate, Iterate, Iterate
As Steve Blank states
“No plan survives first contact with the customer”
It sounds like a simple and common sense-based process, but it contrasts with the traditional top-down financially driven management theory.
Generally, entrepreneurs and intrapreneurs have to draft detailed business plans to get investors’ or senior management’s buy-in and go ahead; however, these plans are based on wrong hypothesis and assumptions that can’t be validated unless experimented in the market.
Many entrepreneurs and intrapreneurs we see themselves confronted with the choice to Make up a business case or don’t get funded dilemma. For these reasons, The Continuous Innovation Method focuses on action.
Instead of made up plans, wasting both time and money, it encourages early-stage prototypes.
The Continuous Innovation Method might be the natural option for new companies but, not surprisingly far too many startups fail to follow this process leading to waste and this is ultimately behind the depressingly poor success rate of new businesses.
“8/10 new businesses fail!”
Innovation requires a mindset shift
In addition to a structured process, Innovation must be supported by the right metrics and mindset. Lean principles and actionable metrics have to be leveraged to create a “safe field” in which teams can experiment on new things and iterate, iterate, iterate.
The competitive landscape has changed and its more important than ever for startups to develop Innovation in a structured manner to be able to be nimbler than industry incumbents that are not able to quickly react to the changing environment.
The findings of this blog were taken content written by Ash Maurya and simply outline a better method to build a variable business model for Innovation.