How Lean is your business?

How Lean is your business?

December 10, 2012 by Laurence McCahill

How Lean is your business?/skinny manIf there’s one thing the Japanese know a lot about, it’s effective car production. And that’s where the term “Lean” comes from. It all began at Toyota, when the car manufacturer found a new, more efficient method of producing cars. The principles learned at Toyota became known as Lean, and they are now more of a management philosophy that can be applied to almost any business.

At its core is the principle of creating value by reducing unnecessary risk and waste. More recently the term has become synonymous with start-ups, thanks to Eric Ries and his Lean Startup movement.

So what makes Lean lean?

  • More focus on experience being designed, with less focus on deliverables.
  • Questioning and testing your assumptions.
  • Evidence-based decision-making.
  • A collaborative approach to designing products.
  • Better outcomes as a result of regular iteration.

OK, so how do I apply it?

Learn about your customers

A key component of Lean – customer development – is a method to help you find ‘product-market fit’, with the aim of delivering a product that people love. The best way of doing this is through interviews with prospective customers, conducting surveys, landings pages with email sign-up forms and demos to test various aspects of the business model (eg pricing, positioning, segments, and so on).

Build something to show them

Create your ‘minimum viable product’ (or MVP in Lean Startup jargon), which is the first version of your product that will enable you to learn the most. Perform regular testing with users, iterate and improve as you go. Make changes when there’s less risk and when you’re not too precious about what you’ve created. 

Measure the response

Focus on metrics that really matter such as sign-up conversions, payments, referrals, returning visits and NOT vanity metrics such as total number of hits.

Rinse and repeat

Keep learning, building and measuring. It’s this feedback loop that ensures you get to where you want to be.

Some useful tools to help with running your Lean projects can be found here.

Lean in practice

We work with many start-ups and often get approached by entrepreneurs with a great idea, however, more often than not they have no validation to show that theirs could be a successful product or scalable business. It can be a painful lesson for many, that after spending lots of time, energy and cash – there's simply no demand for what they've built.

Our approach at Spook Studio involves exploring all aspects of our clients’ business models to ensure that we test out ideas at an early stage where there’s less at stake, which helps to reduce risk, create value and ultimately a better return on investment.

In summary

  • Learn often, fail fast and get out of the building!
  • Fake it before you make it.
  • Start small then scale up.
  • Keep iterating.
  • Don’t lose sight of the vision.
  • MVP: minimum awesome not awful.
  • The web is your lab, keep testing and measuring.

Now it's over to you...

Laurence McCahill is a digital product designer and co-founder of Spook Studio, a “product innovation studio by the sea”. He also writes a popular blog about Lean.

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