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Lean Product Management & Innovation Framework, 3rd Edition

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3rd Edition, Major New Update!

This guide provides a systematic approach for going from idea to profitable business leveraging the building blocks and toolsets of lean methodology to:
1. Inspire innovation and new ideas
2. Ensure that your product idea is what customers need, are willing to pay money for, and can scale profitably
3. Evaluate your product roadmap to prioritize resources on the most valuable solutions

The cornerstones of the framework are:
1. Discover the Problem | Solution Fit
- Understand the problem via customer development
- Build the solution into a minimum viable product
2. Evolve to Product | Market Fit
- Use customer development to build a (minimum) viable business model
- Optimize or pivot based on the build-measure-learn feedback loop

It is structured this way to keep the focus on solving the crucial customer problem first so you don’t waste time building and investing resources in a product that customer’s may or may not ever want.

LEAN PRODUCT DEVELOPMENT FRAMEWORK - TABLE OF CONTENTS
1. The Lead Product Development Framework
2. Step1: Problem / Solution Fit
3. Customer Discovery
4. Understanding the Problem
5. Finding a Solution
6. Source of inspiration
a. employees
b. competitors
c. data/ analytics
d. partners / vendors
7. Iterate your solution
8. Minimum Viable Product : Build Only What you need
9. Step 2: Product/Market Fit
10. Customer Validation
11. Build-Measure-Learn Loop
a. Build: Agile Methodology
b. Measuring
c. Learning
12. Cleaning Up

APPENDIX: TOOLS & PROCESSES TO FACILITATE THE LEAN PRODUCT DEVELOPMENT FRAMEWORK
13. Evaluation Checkpoints
14. Evaluation Criteria
15. Product Management
16. Lean Canvas
17. Product Brief
18. Guidelines when talking to Your customers
19. Number of Usability Participants Best Practice
20. Employee Innovation Workshops: Structure & Format



Read more on my blog @ http://propono.com/
PRODUCT DEVELOPMENT INSIGHTS, RANTS, & RAMBLINGS

Publicado en: Liderazgo y gestión
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Lean Product Management & Innovation Framework, 3rd Edition

  1. 1. Dana Lee 3, dana@lee3.com A customer-centric guide to innovation and product management based on lean methodology
  2. 2. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 2 BUILDING GREAT PRODUCTS Successful companies build great products that customers need. Yet startups and established companies alike struggle with how to innovate and create breakthrough products. In a 2015 Accenture survey of leaders from 500 companies across the U.S., 72% of respondents admitted that they frequently miss opportunities to extend into underdeveloped areas or create new markets. For the startup or smaller company that misses the mark, their fate is often sealed. This guide provides a systematic approach for going from idea to profitable business leveraging the building blocks and toolsets of lean methodology to: 1. Inspire innovation and new ideas 2. Ensure that your product idea is what customers need, are willing to pay money for, and can scale profitably 3. Evaluate your product roadmap to prioritize resources on the most valuable solutions
  3. 3. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 3 LEAN PRODUCT DEVELOPMENT FRAMEWORK The Lean Product Development Framework The cornerstones of the framework are: 1. Discover the Problem | Solution Fit • Understand the problem via customer development • Build the solution into a minimum viable product 2. Evolve to Product | Market Fit • Use customer development to build a (minimum) viable business model • Optimize or pivot based on the build-measure-learn feedback loop It is structured this way to keep the focus on solving the crucial customer problem first so you don’t waste time building and investing resources in a product that customer’s may or may not ever want.
  4. 4. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 4 STEP 1: PROBLEM | SOLUTION FIT Problem | Solution Fit The intersection of identifying a customer problem worth solving (customer development) and crafting a minimum viable product (MVP) solution that customers will pay for. It starts with the foundational leg work of customer discovery. There is a fundamental connection between consumer insights and developing profitable new products, otherwise you are simply working in the dark. Focus on understanding: • A high value user problem • A solution customers want • The customer segment that this solution serves • Unique Value Proposition
  5. 5. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 5 STEP 1: PROBLEM | SOLUTION FIT Understand the Problem To effectively know your customer and their needs, you have to go out into the world and talk to them. Speak with them and observer their actions directly to learn what their problems are and what it is about your solution that solves it. Remember, you’re there to listen. Don’t try to convince or sell. Your goal is to understand what drives your customer’s intentions and motivates their behavior. While understanding your customer and their problems is your foundation, it’s only half the battle. Steve Jobs said it well: “it can be really hard to design products by focus groups… a lot of times, people don’t know what they want until you show it to them.” In short, you cannot outsource your innovation to your customers, but their voice is integral to the design. “Your goal is to understand what drives your customer’s intentions and motivates their behavior.” As you uncover the challenges and problems your customers face, assess if they are problems worth solving: • Is it something customers want? (must-have) • Can it be solved? (feasible) • Who do we think is going to use this? (segment) • How much would customers be willing to pay for it? (viable)
  6. 6. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 6 “Innovation has nothing to do with how many R & D dollars you have… It's about the people you have, how you're led, and how much you get it.” - Steve Jobs Finding a Solution – Seeking Innovation Inspiration strikes at unexpected moments. It is not sparked on a schedule or when it is most convenient, but it is what fuels meaningful growth and differentiates successful companies from also-rans. If you lead or participate in product development in your organization, while you may be held accountable for the product roadmap, it is a misconception that you need also be the source of all new innovative ideas that comprise it. Rather, your responsibility is to recognize smart ideas that address your customer’s needs when you see them and encourage their growth. Great ideas can come from unexpected places. Be open and listening. And don’t make the mistake that innovation is just about the “Next Big Idea.” Rather it encompasses both the incremental as well as the revolutionary. But whatever the size, it’s an on-going journey. Every day, you must demand it of yourself and your team, but most importantly, for your customers. Sources of Inspiration There are multiple sources to spark ideas that solve key problems for your customers. 1. Employee Ideas 2. Competitor Moves 3. Data Insights 4. Vendors STEP 1: PROBLEM | SOLUTION FIT
  7. 7. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 7 STEP 1: PROBLEM | SOLUTION FIT The people in your company think about your business every day and ways to make it better. Richard Branson once said, “a company’s employees are its greatest asset and your people are your product.” A wealth of great ideas sit within your ranks, but without a conduit to submit them, they can get lost. The challenge you face is how to coax them forward. There are multiple approaches to engage your employees to solicit ideas. As with most things, the more you invest in the process, the more you typically get out of it. A few ideas to get started: I. Idea Submission Box II. Idea Workshop (Select Invitation) III. Open Invitation Innovation Workshop A Proven Path AT&T introduced an open-door policy for their employees to submit ideas which has resulted in the introduction of multiple new products to the market that were initially seeded by employees working in the front lines. Forbes‘ profiled the program in Dec. 2013: AT&T's Innovation Pipeline Engages 130K Employees #1 Employees Ideas
  8. 8. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 8 STEP 1: PROBLEM | SOLUTION FIT #1 Employees Ideas #II The Idea Workshop (Select Invitation) Focuses on a specific area of the business leveraging a core team of thought leaders | problem solvers from all levels of the organization. Eric Schmidt, in his book How Google Works, said “Choose [your participants] wisely. It shouldn’t just comprise the people who have been around the longest or those with the biggest titles.” Start with an assessment of the problem you are there to solve and let the ideas flow. #III Open Invitation Innovation Workshop Similar structure to the Idea Workshop, but with a few key changes. Most noticeably, all employees are welcome and encouraged to participate, but the price of admission is they must submit an idea to workshop. Seed the workshop with a subset of seasoned thought leaders to boost creative thinking and help start the ball rolling. Details on format and structure of how these workshops can be set up are detailed in the Appendix: Tools & Processes section on page 29. #I Idea Submission Box Easy to implement, it offers all employees a voice and can be done via email or a physical box. The amount and quality of participation often depends on how you follow up with submissions that are received and if the response is timely and constructive. If employees perceive their ideas are not being evaluated or considered and are going into a “black hole”, you could send the wrong message and build resentment instead of ideas.
  9. 9. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 9 STEP 1: PROBLEM | SOLUTION FIT Studying your competitors is critical to understanding what you are up against in the marketplace. While one benefit is to discover flaws in their offering you can exploit, you need to also pay close attention to services and features that set them apart. There is no shame in copying and building on unique features or services they offer and evolving them to the next level using their work as a springboard. But don’t blindly copy – for one thing you could get yourself in hot water if you copy too closely, but just as importantly, what looks like a differentiating feature to you, may lack any real customer adoption and fails to address a true customer need. When copying, take the idea to your customers (or better yet, ask your competitor’s customers if you can) to understand if this is a must have feature to stay competitive or a red herring that that could waste time and resources trying to copy and improve on something that no one really wants in the first place. #2 Competitors
  10. 10. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 10 STEP 1: PROBLEM | SOLUTION FIT #3 Data Insights If you have launched your product, you are already analyzing your data to see what your customers are doing to gain insights that can inform the evolution of your products and services or even launch new products. Well defined KPIs are key in understanding what your customers are doing and provide clues to problem areas of your product offering. A trap you want to avoid is that not all insights are relevant or meaningful enough to spark real change or drive better decisions. There is also a common misconception that more data is better, but it does not necessarily mean better data. While gathering quality data is an essential part of the process, the data in and of itself has no value. Value is only established when actionable insights can be obtained from the data to better inform your business strategies, products and services. #4 Vendors There are thousands of vendors who offer turn-key solutions that can often be implemented for cheaper and less time than it would cost you to build it on your own. Like any solution you are considering, your first step should be to assess if their solution addresses a key problem you are trying to solve. If there is a fit, evaluate the cost and time it would take to buy their solution vs build your own. 3rd party solutions can be an expedient path to addressing a part of your product offering. If it’s not a fit, take a pass and move forward to find the solution that does address your problem opportunity.
  11. 11. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 11 STEP 1: PROBLEM | SOLUTION FIT Iterate Your Solution As you better understand your customer’s problems, formulate a set of hypotheses (e.g. what the product or feature set is, who will use/pay for it) and test it through iterative cycles of customer interviews. Assume your hypotheses will be wrong – be ready for rapid iterations and pivots. Using low fidelity prototyping can be a quick tool to rapidly iterate on a solution to assess if it has legs. Be careful not to become precious with your solution. It is easy to grow attached to an idea (especially one you came up with), but remember that it’s counter-productive and you risk being blind to customer insights that could be counter to your personal opinion. A popular catchphrase in Lean Startup circles is “Invalidate my Assumptions!” Sir Karl Popper, a philosopher and professor at the London School of Economics from 1949 to 1969 said it well: “Whenever you propose a solution to a problem, you ought to try as hard as you can to overthrow your solution, rather than defend it.” Another risk to watch out for is the natural tendency to seek closure which can lead to prematurely adopting an iteration of a solution that does not adequately fit the problem. There is going to be pressure to move things forward to show progress and get something out there. It’s a tough call, but resist the temptation when you have to or you could find yourself building a product with low customer adoption. “Invalidate my Assumptions!”
  12. 12. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 12 While not quite a panacea to the danger of scope creep, the Minimum Viable Product (MVP) is an important tool. It’s designed to limit wasting time and money on features that have little or no customer value. The focus is on building only the minimum feature set that addresses and solves your customer’s problem and allows you to launch and start testing the fundamental business hypotheses to begin the learning process. Minimum Viable Product is not synonymous with half-baked. Your MVP must address the top problems your customers have identified as important to them and deliver enough value to use your product or service, but no more or less. If your product does not have enough value to retain an early adopter, it’s not viable yet. A common pitfall is to try and over-engineer your product and address every edge case. This is a distraction that will waste your time and divert you from the core product. Once you launch, you will quickly have insights on features and gaps you missed and can prioritize their development according to the level of customer pain. Minimum Viable Product: Build Only What You Need MVP Product Vision Your MVP should have three key characteristics: • It has enough value that people are willing to use it • It demonstrates enough future benefit to retain early adopters • It provides a feedback loop to guide future development STEP 1: PROBLEM | SOLUTION FIT
  13. 13. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 13 Product | Market Fit You’ve worked hard defining your problem | solution fit and you know customers want it, but are they willing to pay for it at the price point you need to be profitable? Product | Market fit is about evolving your problem | solution fit into a (minimum) viable business model based on insights gained as you iterate through the Build- Measure-Learn feedback loop. Steve Blank, an early pioneer of lean thinking defined Product | Market fit as “sufficient demand in a clearly defined marketplace for a product delivering a clearly defined value proposition to allow efficient capital expenditure to scale value creation.“ “The only thing that matters is getting to product|market fit.” Marc Andreesen, Founder of Netscape STEP 2: PRODUCT | MARKET FIT
  14. 14. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 14 Customer Validation In essence, customer validation corroborates your model. Your goal is to verify your market, locate your customers, test the perceived value of your product, identify the economic buyer, and establish your pricing and channel strategy. Key areas you’ll want to focus on and apply rigor as you build out the business model include: • Revenue Streams. How does this product impact your revenue stream? Are you charging for it? If so, what is the pricing strategy? Or does this solution facilitate the shopping experience and reduce barriers to conversion? If so, how do you quantify the added value it provides? • Cost Structure. What is the breakdown budget to design, build, and support ongoing operations? This includes costs for customer research, development, marketing, procurement, manufacturing, transportation, etc. Is this a new business with its own P&L? What is the break- even point? Are your assumptions valid? • Channels. What are the paths to your customers? Online? Partnerships? Sales reps? • Key Metrics. How will you measure the effectiveness of your product? Conversion rate? Size of, or increase in AOV? Frequency? • Unfair Advantage. The most difficult one to determine and should not be confused with competitive advantages. A true unfair advantage is something that cannot be easily copied or bought. STEP 2: PRODUCT | MARKET FIT
  15. 15. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 15 Build-Measure-Learn Feedback Loop You’ve launched your MVP. The rubber has hit the proverbial road. You are operational and spending money. Your focus needs to be on achieving Product| Market Fit as quickly as possible. The Build-Measure-Learn feedback loop is designed to quickly track actionable metrics, learning from those insights, and adjust (build) your product to reflect those learnings. The race is on. STEP 2: PRODUCT | MARKET FIT The Build Speed to market is as critical as being nimble and able to respond to changing priorities. Competition is fierce and new game changing services are being introduced into the market at a rapid rate. Agile Methodology Your build methodology has a major influence in your ability to innovate quickly. Agile is probably the best process in today’s fast-paced environment. Forrester concludes “waterfall is too slow for today’s business challenges, and Agile speeds time-to-market. Traditional development methods specify all, code all, test all, and deploy all — nothing hits production until everything is ready. Agile stresses that developers deliver a minimum viable product at the earliest possible date and deliver the most-critical functionality first — far sooner than conventional methods.”
  16. 16. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 16 Agile Projects are 3x More Successful than Waterfall Key Differences ● Structured ● Sequential process ● Requires clearly defined requirements upfront ● Suited for situations where change is uncommon ● One big project ● Flexible ● Well suited for continuous optimizations ● Requirements are expected to evolve and change ● Business is heavily involved in the process ● Requires high level of collaboration While the use of Agile continues to grow every year, it is important to remember it is not a silver bullet. VersionOne have been publishing an annual survey about Agile for almost 10 years to help companies make informed decisions about their agile initiatives. They report that executive sponsorship is the #1 most important success factor, followed by buy-in from day-to-day business stakeholders and clear processes and training around the basics of agile methodology. Waterfall Agile SOURCE: CHAOS Manifesto, Standish Group, 2011 Graphs show specific results based on projects executed from 2002 to 2012. STEP 2: PRODUCT | MARKET FIT
  17. 17. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 17 Measuring To find change producing insights you need to have clear business objectives. Diving into the monolith of data available to you without clear goals can quickly lead to ‘analysis paralysis’ and lost time slicing through data with no clear direction. Start with a set of strategic goals that help you discover insights that are actionable. Properly defined KPIs can be enormously insightful in how you are performing and track what your customers are doing. Metrics alone, however, won’t tell you why customers are behaving one way or another and it’s dangerous to infer just from data. Your goal is to uncover your customer’s pain points and understand what’s working and what’s not. Conducting customer interviews and usability tests provide the additional insights you need and are just as critical as the KPIs derived from your analytics. The combination of both insights is how you will learn how to optimize (or possibly pivot) your product to achieve Product| Market fit. “In God we trust. All others must bring data.” W. Edwards Deming STEP 2: PRODUCT | MARKET FIT
  18. 18. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 18 Learning The launch of your new product or feature set is just the beginning. Assumptions you’ve made will be wrong and gaps in your feature set will become quickly apparent – some large, some small. Iterate your learnings with users to ensure usability of your product and repeat until you find the solution that solves your customer’s problem. Jakob Nielsen, a prominent web usability expert advocates, "elaborate usability tests are a waste of resources. The best results come from testing no more than 5 users and running as many small tests as you can." Iterate the solution and learn. A mistake some companies fall into is to move key resources to a new project once a product has been built and launched. For your product to be successful you need to devote resources to make the necessary adjustments learned through your measurement activities until you reach product| market fit or risk the product / business failing. STEP 2: PRODUCT | MARKET FIT Iterative Learning
  19. 19. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 19 Cleaning Up Features or services that contribute marginal value after a couple iterations to fix them should be seriously considered for removal. This may go against your gut instinct that more features make your product better, but ultimately the message you’re receiving loud and clear is that this solution does not help solve your customer’s fundamental problem, regardless of anyone’s affinity for it. Identifying features to remove is not one to take lightly but is important and should include those that:  Are not used by customers  Detract from other value-adding features  Are costly to support  Do not fit with your product strategy STEP 2: PRODUCT | MARKET FIT
  20. 20. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 20 APPENDIX: TOOLS & PROCESSES TO FACILITATE THE LEAN PRODUCT DEVELOPMENT FRAMEWORK 1. Evaluation Checkpoints 2. Evaluation Criteria 3. Product Management Discipline 4. Lean Canvas 5. Product Brief 6. Guidelines When Talking to Your Customers 7. Number of Usability Participants Best Practice 8. Employee Innovation Workshops
  21. 21. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 21 Evaluation Checkpoints Checkpoints are an important mechanism to determine your organizational intent to continue investing resources into a new product at key milestones in the product development lifecycle. Form a committee of senior leadership that meet on a recurring basis (e.g. quarterly?) to evaluate products in discovery and development stages to keep all teams focused on the most important opportunities and align leadership on the current set of strategic initiatives. These should happen on a recurring basis (e.g. quarterly) to ensure current initiatives remain on track, assess new ones, and respond to new threats or opportunities in the marketplace in a timely manner. Ideas reviewed by the committee can be moved into one of three categories: APPENDIX: TOOLS & PROCESSES Go Forward. Best bet products/ services that are strategically aligned to your goals and pillars or are otherwise considered critical to remain competitive in the marketplace. A level of investment (money and resources) is committed to the project to bring the idea to the next stage of development. Banked. Solid ideas but for one reason or another you cannot move them forward to the next step of development yet. Banked ideas are effectively a holding ground until you are organizationally ready to move them forward. Retired. Ideas that miss the mark in key areas (e.g. lack of significant consumer pain, inadequate market opportunity, etc.) and are effectively shelved. In this way, your Innovation Pipeline feeds your product roadmap with: • Up to date list of all active product development initiatives and the stage they are in • Product owners responsible for moving them forward • Clear understanding of next steps for the product’s evolution
  22. 22. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 22 Checkpoint Ranking Criteria Below are a suggested baseline set of criteria in evaluating product ideas: • Customer Pain Level. Does this product truly solve a customer problem? Is there strong enough customer motivation (pain) to get the customer to use your product? These should be must-haves for your target segment. • Market Size. You need to pick customers that represent a big enough market, or are a stepping stone to a big enough market. Are there enough customers that have this strong motivation to make the product successful?[4] • Business Model. Can you build a viable business model around this idea? (Specifically, is it going to be possible to acquire customers for less money than the profit you can make from selling to them?) • Price. Is this a product you can charge for? If so, how much is largely driven by the segment? Focus on a customer segment that allows you to maximize on price. The more you can charge, the fewer customers you need to reach break-even (assuming gross margins don’t increase). If this is a free tool or service to support the purchase process, what is the anticipated lift? • Level of Effort and Investment. How much time and capital are required to complete the solution? • Competition. Are there entrenched competitors who would be hard to dislodge? Similarly, what are the barriers to entry that can be sustained over time? (Ideally the differentiation should be strong enough to allow you to beat other players who may decide to copy the idea, and benefit from their brand, distribution, customer base, etc.) • Risk. How significant are the risks involved? • Suitability. Are you well suited to this particular opportunity? Do you have appropriate insight or technical expertise that makes you well placed to tackle this opportunity? APPENDIX: TOOLS & PROCESSES
  23. 23. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 23 Product Management Product Management Addresses Common Challenges within Organizations: ● Lack of clarity and accountability around product ownership ● Products are released with little or no further evolution ● Specific KPIs for a product are not tracked and evaluated on an on-going basis Product Management Solves These Problems: ● Product Managers maintain a portfolio of existing and new/in-development products and feature sets to track and grow ● Prioritizes MVP features based upon customer need and expected ROI ● Works across disciplines (user experience, technology, marketing, customer service, etc.) to ensure all aspects of the product are addressed ● Frequently in the field, talking to customers, understanding their needs ● Owner of the product; responsible for ROI and Net Profit ● Responsible for market, business case, and competitive analysis ● Monitors a metrics dashboard that track KPIs for each of their unique products ● Responsible for contributing new ideas to add to their portfolio ● When a Product Manager moves to a new role or leaves the company, their product portfolio is re- assigned to other Product Managers to ensure continued tracking and evolvtion - nothing gets dropped APPENDIX: TOOLS & PROCESSES
  24. 24. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 24 The Lean Canvas is a simple but powerful tool that helps you iteratively and rapidly define the strategic vision that creates a unique value proposition and, in doing so, significantly increase your chance for success. Lean Canvas is an adaptation of the Business Model Canvas by Alexander Osterwalder which Ash Maurya created in the Lean Startup spirit (Fast, Concise and Effective startup). It is licensed under the Creative Commons Attribution-Share Alike 3.0 Un-ported License. Lean Canvas Steps 1 & 2 of the Lean Product Development Framework can leverage the Lean Canvas as a tool to help focus first on key areas to reduce wasting time on ideas that your customers don’t need or care about. APPENDIX: TOOLS & PROCESSES
  25. 25. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 25 Focus Areas for Steps 1 & 2 of the Lean Canvas  The content of the canvas is iterative, completed initially with a hypothesis and evolved over time as you refine and validate your understanding of the customer’s needs and the unique value proposition that solves those problems.  The numbers in the canvas represent a prescribed order to filling it out to maintain a customer-centric approach.  It is NOT meant to cover every topic that needs to be solved in developing a new feature or product offering (Partnerships, Key Resources, Technology, Marketing Plan, Supply Management, etc.)  IT IS focused on attributes that define the strategic vision that guides the supporting efforts to bring the product to fruition. Step 1 Problem| Solution Fit Focus on defining #1 to 3 1. Customer Segments 2. Problem 3. Solution 3. Unique Value Proposition Step 2 Product| Market Fit Evolve the business model with #4 to 7 4. Channels 5. Cost Structure 5. Revenue Streams 6. Key Metrics 7. Unfair Advantage 1 1 2 3 4 5 5 6 7 APPENDIX: TOOLS & PROCESSES
  26. 26. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 26 Step 1: Problem| Solution Fit Product Brief ● 1-2 page brief, includes ● Details on the approach, activities, key learnings, and pivots the team made in establishing their recommendation ● Stage 1 Lean Canvas focus areas: Problem, Solution, Customer Segments, and Unique Value Proposition ● Appendix of the artifacts from activities used as inputs to develop the product brief Step 2: Product| Market Fit Product Brief ● An evolution to the Product Brief that extends and details the activities, key learnings, and pivots the team has made since the Stage 1 Product Brief ● Stage 2 Lean Canvas focus areas: Channels, Cost Structure, Revenue Streams, Key Metrics, Unfair Advantage ● Appendix of the artifacts from activities used as inputs to develop the product brief Step 1 Artifacts Typical examples include: ● Customer interview key themes ● 3rd Party Research ● Competitor benchmarking ● KPI / metrics insights ● Card sorting outcomes ● Wireframes / Prototypes ● Usability testing results Step 2 Artifacts Typical examples include: ● MVP feature prioritization ● Financial model, projections ● Conversion funnel analysis ● Development Effort Estimate ● Go to Market strategy ● A/B & multivariate test outcomes ● Visual Design Product Briefs The Product Brief is a light-weight document that summarizes the activities, insights and decisions of the product development process. The purpose is to encourage a synthesis of learnings from different activities to create a more complete picture. It’s also well-suited to present to evolution checkpoints. APPENDIX: TOOLS & PROCESSES
  27. 27. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 27 Talking to Your Customers Guidelines and reminders when talking to your customer: • Start from the assumption that everything you know is wrong • Ask open-ended questions to get people talking and pay attention to the words they use. The more comfortable they are in the conversation, the easier it is to identify and understand problems and form hypotheses. • Don’t Sell, Convince or Argue. Listen. • Don’t Ask Them What they Want. Ask questions around the problem “Do you ever experience a problem like …”, or “Tell me about the last time...” • Separate their behavior from the words they are saying • Be empathetic - listen, even when they go off-topic • Validate the problem you are solving, your solution, pricing, and channels • Remember that what people say and what they do are not always the same • When performing usability testing: • Look for places where they are having a hard time or they experience friction in their journey • Are there moments when they can’t do what they want to do? http://scalemybusiness.com/how-should-innovators-really-talk-to-their-customers/ APPENDIX: TOOLS & PROCESSES
  28. 28. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com “The best results come from testing no more than five users” - Jakob Nielsen, Ph.D.* N (1-(1- L ) n ) where N is the total number of usability problems in the design and L is the proportion of usability problems discovered while testing a single user. The typical value of L is 31%, averaged across a large number of projects we studied. Plotting the curve for L =31% gives the following result: https://www.nngroup.com/articles/why-you-only-need-to-test-with-5-users/ % of usability problems found in a usability test with n users *Jakob Nielsen is “the guru of web usability" (The New York Times). Holds 79 U.S. patents, mainly on ways of making the Internet easier to use. Principal of the Nielsen Norman Group. Number of Usability Participants Best Practice APPENDIX: TOOLS & PROCESSES
  29. 29. Lean Product Management & Innovation Framework © 2016 Dana Lee 3 dana@lee3.com 29 Idea Workshop (Select Invitation) Open Invitation Innovation Workshop GOAL Focuses on a specific growth area of the business you want to expand Provides an open door for any employee to pitch an idea in a supportive space PARTICIPANTS  Cross-functional team of thought leaders / problem solvers from all levels of the organization.  Participants shift regularly to encourage new and different voices.  Eric Schmidt, in his book How Google Works, said “Choose [your participants] wisely. It shouldn’t just comprise the people who have been around the longest or those with the biggest titles.”  All employees are encouraged to participate. But admission comes with a price: they must bring an idea to workshop .  Seed the workshop with a sub-set of the Idea Workshop members to boost creative thinking, encourage or help start the ball rolling, and provide guidance to first-timers. WORKSHOP PART1  Start by clearly defining the problem the team is gathered to solve – provide as many insights as possible to help inform the ideas; post on the walls for easy reference.  Team brainstorm cranks out as many ideas as possible: good, bad, and otherwise; make sure one or two people capture the ideas on a whiteboard in real time. A good stretch goal is 100.  One rule: No judging. Limiting phrases like “we’re not set up for that" or "that's stupid" kill creativity and deflate the energy of the space.  Each participant that brings an idea provides a high-level outline to the group - they can use props, slides, printouts, etc. to help illustrate their idea (5-10 minutes).  Workshop members spend the next 20 minutes brainstorming, exploring, riffing and expanding on the original idea. This is a no judgment exercise - it is a safe haven for all suggestions.  Repeat cycle until each participant has had a chance to present. WORKSHOP PART2  Take a break after part 1, then switch gears and begin to evaluate, assess feasibility, and mold/evolve the ideas. Some will be big, new, and bold; others become components or complementary to other ideas, and some will fall away.  Focus on the ones that create the most excitement within the group, and more importantly, solve the biggest problem for your customers. Prioritize the ideas (possibly a top 10 list); add a high-level overview for each concept and an initial hypothesis of the problem it solves. APPENDIX: TOOLS & PROCESSES Employee Innovation Workshops: Structure & Format

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