Monday, June 23, 2014

Fail Fast or Learn Fast?

This work by Marcelo Bernardes (@marcelobern) was originally posted on LinkedIn.

As I read the article from Jim Belosic (CEO of ShortStack), it got me thinking how many times people get paralyzed by past failures. While entrepreneurs are forewarned of the danger (and sometimes likelihood) of failure, fear of failure is a challenge for all people and we all should reflect on which risks to take, how to mitigate them, and seek to learn from the outcome. It is about reframing the fear of failure into risk taking as a learning opportunity.

Prepare yourself to learn from your journey

I agree with Rob Shelton (global innovation chief of PwC), when a more scientific approach is used, learning takes center stage.

It's about having a hypothesis, and testing it, if the results don't match your hypothesis, you've got data. If the results do match your hypothesis, then you have a discovery. - Rob Shelton

Entrepreneurs, intrapreneurs, and business leaders might use business plans to capture their hypothesis, others might use project plans. No matter which tools your situation favors, be sure to document your hypothesis.

Every time actual results invalidate your hypothesis, analyze the data to update your hypothesis. Remember, being right is not the goal, learning from this reflection process is. And applying the learning to update your hypothesis will ensure a continued learning experience.

As practical, identify “early warnings” to help you spot invalid hypothesis as early as possible, and in time for a course correction to affect the outcome. For example, while an annual plan is good, intermediate (quarterly or monthly) goals can identify shortcomings early, allowing you to update your hypothesis in time to still meet a meaningful annual goal.

Finally, it is important for you to care for your health and well-being at all times. This will prove particularly useful as the number of hypotheses reviews (pivots) mount.

Test your hypothesis

A key to success is to be diligent when testing your hypothesis. One way this can be accomplished: pre-schedule regular hypothesis review sessions and commit to them. An impartial advisor might help keep perspective, avoiding blind spots and denial from those personally invested in proving the hypothesis.

As you gain more insight into the hypothesis, you may be able to spot key performance indicators, which could prove useful to measuring progress.

Revising a hypothesis (or pivoting in entrepreneur terms) could happen either because the current hypothesis was proven invalid or even because a better and more powerful hypothesis can be formulated, based on the insight and data gathered during the hypothesis testing.

Learn from your journey

As soon as a more powerful hypothesis is identified by analyzing the data gathered, take the time to reflect:
  • How would it have been possible to identify this more powerful hypothesis earlier in the process? Which “early warnings” should have been in place?
  • Is this the most powerful hypothesis you can identify at this point in time?

Writing down your findings and/or sharing them with others is a great way to make sure this experience is internalized and becomes an intrinsic part of your life experience.

And please note than a culture of “fail fast” should not promote or expect failure. Rather, it should aim to succeed by mitigating risks to the best of one’s abilities, incorporating learning from eventual failures to the point where finding the path to success becomes second nature.

How comfortable are you with risk taking? Are you wired to succeed? How do you learn from your past experiences? Feel free to use the comment box below to share your experience and point of view. And please follow me, if you would like to be automatically notified when I publish new articles.






(Image courtesy of Naypong - FreeDigitalPhotos.net; Post updated Jun/22/2014)

Sunday, June 22, 2014

Corporate Innovation in a Numbers Driven World

This work by Marcelo Bernardes (@marcelobern) was originally posted on LinkedIn.


In his recent Forbes article, Neil Howe suggests that the shared leadership of Boomers and Gen Xers is a key driver behind the current risk-aversion behavior we see in the corporate environment.

This risk-aversion further challenges corporate entrepreneurs (aka intrapreneurs), and the execution of innovation driven projects, especially disruptive innovation ones. Here are some suggestions on how you can win support from your Gen Xer leadership and even engage millennials, who are eager to innovate and become intrapreneurs!


Be Numbers Driven Yourself

Revenue and profitability are key numbers for most customer facing projects. So start by figuring out how much revenue and profit your innovation project may bring.

It is much easier to convince a numbers driven leadership to invest in an innovation project, once there is a “proven customer demand”. Customer demand can be proven either through traditional means (e.g. market research, customer interviews, etc.) or by using corporate crowdfunding.

Regardless of the chosen approach to prove customer demand, remember that revenue data linked to customers opportunities is much more powerful than market size data. As such, a traditional sales funnel of sorts, or a pre-order list from a crowdfunding campaign are great ways to collect revenue data.

On the profitability side of things, focus on keeping costs down. Determining a minimum feature set, and then scaling up in phases is a great way to minimize costs, and increase profit margins throughout all phases of your project.

Identify your Minimum Viable Product

The term “minimum viable product” or MVP (Wikipedia) can be defined as
that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.
If a few customers can fund your innovation project, you may opt for offering it as a customized solution to be sold to a couple customers (or even a single one). On the other hand, if a high number of customers is required to fund your innovation project, you may do better with a corporate crowdfunding approach.

Keeping costs down during this initial phase will increase your likelihood of fully funding your project with the customers identified, then your numbers challenge will be reduced to proving profitability. Lower costs can be accomplished by using 3D printing for rapid prototyping (Wikipedia) of hardware components and public cloud (Wikipedia) for deployment of software components.

The project focus during this initial phase is to validate the market demand and customer needs. Scalability is not yet a concern, as the solution is not available for the general public but just a few customers.

For continued success, it is critical to use this initial phase to identify potential future customers. If you used a crowdfunding approach, you may want to keep the campaign open, so you continue to gather customer interest. For a customized solution, you definitely want to get the word out to other potential customers and build a sales funnel.

Scaling up to serve a larger audience

Once your customer interest has been validated and you understand the customer needs, it is now time to make your ground breaking solution available to the masses, building scalability into the process. In the numbers game, this phase is all about growing revenue and/or improving profit margins over time.

Get started by leveraging the customer interest gathered in the previous phase. Here is where keeping your crowdfunding campaign open could really pay off, if potential customers continue to express interest, and commit money, as your existing customers start to spread the word about their results.

It is always best to continue to serve your customers without disruption. Look for ways to gradually and smoothly transition from the 3D rapid prototyping and public cloud deployment to a more cost effective and scalable approach. This will also allow you to bring cost efficiencies and revenue growth into your project, allowing numbers to gradually improve over time.

Can these suggestions help you “sell” your innovation project to a numbers driven leadership? Is the corporate crowdfunding or traditional approach a better fit for you? Did you use a different approach to “sell” your innovation project? Feel free to use the comment box below to share your experience and point of view, and please let me know about your innovation project. If there is enough interest, I will look into internal facing and social innovation projects in a future post. And please follow me, if you would like to be automatically notified when I publish new articles.




(Image courtesy of bplanet - FreeDigitalPhotos.net; Post updated June/9/2014)