What is the difference between Design Thinking, Lean Startup and Agile.
All three frameworks show up regularly on the buzzword bingo of fast moving and forward looking companies. But what are they, are they related to each other, and are they relevant for Product Managers? Yes to all questions. This article will explore the systematic approach to generating value presented by Design Thinking and Lean Startup and Agile as a methodology to build products fast! Next to that we’ll throw some Lean in the mix as well.
Let’s start with WHY, as that’s always a good idea.
Why would organizations bother about a systematic approach to rapid value creation. Well the answer is obvious, as companies are becoming more digital they are expected to operate at the speed of light, be extremely agile and continue to deliver value and meet ever changing requirements.
Let’s take a step back – I used to build products using waterfall. This was a training product designed for modern IT professionals, and it was called ITIL. We developed a gigantic storyboard for a 5 day theoretical training program. Once content was done, media items were created, then audio was being recorded, and then the program was stitched together. The entire exercise took about 10 months before we could take the product to market. Once we launched it, we obviously found out the program had some big flaws. People were not used to our innovative way of teaching without Powerpoint that we introduced and rejected it, and the competition build something slicker, more attractive and appealing. Classic example of how today products are not developed anymore.
Design Thinking could have really helped to understand the problem customers were facing (They were looking to to study new concepts, but moreover discuss ideas with their peers in class so interactive group learning).
Lean Startup would have helped to avoid the problem of building something people were not looking for (training without Powerpoint), and Agile could have helped to cut the dev cycle with 50% by just building iteratively.
Gartner introduced a model in 2016 where they connected these three models.
Gartner: Combine Design Thinking, Lean Startup and Agile to Drive Digital Innovation
Let’s look at these three models in more depth.
Design thinking – understanding complex customer problems
Let’s start with Design Thinking. This method was developed in the 1960s as a creative method to solve complex problems. Design thinking is often associated with the work of IDEO, the company that made design thinking popular.
Design Thinking requires a company to really understand customer problems from an outside in perspective. Design thinking follows a logical process that tries to understand the customer pain, challenge assumptions and come up with new and fresh ideas. Is the customer looking for a car, or is he looking for the best way to get from A to B.
Author/Copyright holder: Teo Yu Siang and Interaction Design Foundation. Copyright terms and licence: CC BY-NC-SA 3.0
Why should organizations consider Design Thinking?
- Design Thinking brings a human-centered view and builds empathy with users/customers
- Design thinking helps to reduce the risk associated with launching new ideas, products, and services.
- Design Thinking generates solutions that are revolutionary, not just incremental.
- Design Thinking engages in systems thinking and takes a big picture view.
- Provides a perspective to evaluate ideas against their desirability, feasibility, and viability
- Design Thinking helps to clarify the real problem and challenges the status quo.
- Finally, it helps to learn and iterate faster.
The bridge between Design Thinking and Lean Startup
The Gartner model integrates Design Thinking with Lean Startup. The moment ideas gets ready for prototyping Lean Startup takes over and uses its Build-Measure-Learn approach to develop marketable products.
In reality there is a bit more to it though and it’s not so straight forward as the Gartner model displays. Design Thinking operates primarily in the problem space. The logic behind Design Thinking is to find fresh ideas to existing problems for users. Lean Startup operates in the solution space, you are actually working towards a solution that will solve a customer problem. The product needs to be good enough that users can actually use it (build), allowing you to monitor their behavior (measure) and improve your next releases based on these findings (learn).
This will actually put most of the prototyping in the Problem space. A prototype can also be a sketch of a product and does not yet need to be a working product. Before you move towards building your minimum viable product (mvp) you also want to have a minimum level of validation that there is a viable business model to support the product. Can you free up the internal resources required for building the product, and does the product fit the overall product portfolio. Once those questions are also addressed, you can work towards building the MVP.
Lean Startup – Test products quickly in the market and validate they are fit for purpose
The idea behind Lean Startup is that products and business models are rapidly developed in partnership with customers or users. Using iterative product development and exposing products quickly to users development can be done faster and the chances of success are higher compared to traditional development processes. Lean Startup thus counters the idea that you first have to develop the complete product, design every process and only then take the product to the market.
When building (BUILD) new products the teams responsible for this are working towards what is called a Minimum Viable Product (MVP). The MVP carries sufficient features that will satisfy early users. Extensive testing with customers (MEASURE) is then applied to validate if the product makes sense, and to experience how users are benefitting from the product. This learning (LEARN) is then applied to further develop the product. Once customers feel excited about the product, it’s time to scale up and get into mass production.
Two examples – For one of my projects I was working towards launching a portal in the energy domain. Customers would be able to quickly view the spare electricity capacity in a section allowing them to assess the viability of their plans for example for deploying solar panels. Sections with a lot of spare capacity would be interested to pursue, sections with low capacity should be avoided. I was convinced that customers were interested to apply different scenarios helping them to find the best fit. Consistently however customers explained that just an insight into spare capacity would be sufficient. This saved a lot of development effort.
A second example – we were building a learning portal to deliver online programs to users of our customers. The portal did what it was supposed to do and learners were enjoying their training programs. Then some customers asked us if they could also buy the portal and use it as their own platform. We realized that our product was actually addressing a completely different problem, and quickly tested if other customers where experiencing the same challenge. This was the case, and soon our product entered a completely new segment that was dominated by large learning management system providers.
From Lean Startup to Agile
The source of Agile is the Agile manifesto that was conceived in a ski resort in 2001 as an alternative approach to building software. Waterfall was the dominant method used for developing software up to that time. Waterfall means that development only starts when the design is completely thought through. Testing happens after development, etc.
Agile changed this approach by working iteratively. So no big bang anymore, but releasing small consumable chunks of the product. Hey, that sounds like working on releasing an MVP instead of the full thing – indeed. More than a proces, Agile is a mindset. This is well articulated in the Manifesto.
- Individuals and interactions over processes and tools
- Working software over comprehensive documentation
- Customer collaboration over contract negotiation
- Responding to change over following a plan
The most popular application of Agile today is still Scrum. Scrum is a framework that was developed for building software using Agile principles. The Scrum framework is included in the Gartner model, and is the third circle in the model -> product backlog, sprint planning, sprint execution, shippable increment, sprint review.
The Scrum model started making its way into business as well. The concept of working with a backlog, prioritizing activities and releasing in small chunks is considered logical and does not just apply to building software. It aligns well with the idea that businesses need to move at the speed of light and deal quickly with a changing environment.
Combining Design Thinking with Lean Startup and Agile and Lean
The Gartner model is interesting, but I’m not too excited about the Scrum model as the third circle at the end. For me Agile is a mindset that is applicable to Lean Startup, as well as the Scaling phase following Lean Startup. The beauty of the Agile approach is that it puts people in a mindset to work according to specific principles. Sure, Scrum provides a solid framework, but it’s primary relevance is still in software development, and it’s not yet a proven and tested model in the business. Using Lean and Agile methods, we can cover both Lean Startup as well as the scaling phase. So let’s give Lean a podium as well.
The 5 principles of Lean are: Specify value, Map the value stream, Create flow, Establish pull, and Seek perfection. These principles are perfectly aligned with Lean Startup and the scaling phase that comes when production needs to start running. Lean uses visual management techniques (like the Kanban board) to create a high performing continuous delivery organization. Small chunks of work are picked up from a prioritized backlog and flow smoothly through the development cycle. There is a focus on continuous improvement, ensuring the approach becomes better all the time.
So Agile and Lean can be applied to Lean Startup as well as to the scaling phase as a method to develop value iteratively and release value to the market. Scrum is a good process to consider when building software products. If you’re working towards releasing a consulting service or a business proposition for the energy domain you may just have enough by applying Lean principles.
Interested in hearing your feedback – so let’s hear it!