Lean Startup or Stage-Gate?
More often organizations are not choosing one or the other but taking the “and” option and integrating both into their product processes. The challenge is how to get them to play nice with each other and gain the benefits of each without losing something in the process.
To discuss this topic I turned to a well-experienced product manager and innovator who mentors young entrepreneurs as well as large companies, showing them how to put Lean into practice and align it with other methodologies, including Stage-Gate. My guest is Mark Adkins, president of Smart Hammer Innovation, a management consulting business that helps companies apply best practices to Innovation Management. He is also a part-time professor at the University of Pittsburgh’s Center for Medical Innovation.
Mark shares how Lean Startup works best in the front end of Stage-Gate, enhancing an organization’s product process.
Below is a summary of the topics discussed and a link to the interview.
- [2:17] Mark’s first experience as a product manager earned him and his organization the Outstanding Corporate Innovator award. Not bad!
- [9:40] Several product managers recognized the need for a faster way to find and test breakthrough ideas. This was pre-Lean Startup. Mark’s company formed a group called Innovation Ventures that operated outside of a stage-gate process to explore ideas in an environment with fewer constraints.
- [10:00] Mark mentors students at the University of Pittsburgh in the Blast Furnace program for entrepreneurs. He uses Eric Ries’ Lean Startup materials and Alex Osterwalder’s Business Canvas/Value Proposition materials (see episode 123 for an interview with Alex Osterwalder). He has also applied the materials in large organizations. The breadth of experiences has provided important insights.
- [11:25] An example is Mark’s engagement with a large company he has worked with for the last year and a half integrating lean startup methodology as pre-stage gate (or stage 0) process. The company had a very solid stage-gate process but lacked breakthrough product development. Adding Lean improved that.
- [15:31] Big companies struggle with the concept of “fail fast.” What is important is that learning takes place. When you’re doing your early customer investigation, thinking of value propositions, or considering product concepts, you’re in the early stages of innovation and your sole metric is based on asking, what am I learning?
- [18:47] The standard stage-gate processes are: (1) scope, (2) business case, (3) development, (4) test & validation, and (5) launch. Add a zero stage for Lean.
- [24:46] Stage 0 is built around Lean and is where a Learning Plan is created and conducted. A Learning Plan is an iterative loop of:
- Ideation – create or discover ideas
- Experimenting – designing experiments to test assumptions
- Customer discovery – get out of the office and talk to customers about the idea
- Business model canvas – create a one-page business plan to analyze the feasibility of the idea
- [26:00] The idea is evaluated for feasibility using the areas of technical, clinical (for medical products), organizational, and financial.
- [27:40] Keep turning the crank, moving through a Learning Plan, creating a new one, and moving through again, until you know how to solve a specific customer problem in a specific way that creates value for the customer and your organization.
- [29:26] In addition to Eric Ries’ work, Ash Maurya’s Running Lean book is a good resource (see episode 10 for an interview with Ash).
- [30:55] Adding Lean as a stage 0 to a stage-gate process increases velocity. It gives organizations the ability to try many more ideas much faster.
Listen to the interview with Mark Adkins on The Everyday Innovator Podcast for product managers and innovators.
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Chad McAllister, PhD is a product innovation guide, innovation management educator, and recovering engineer. He leads Product Innovation Educators, which trains product managers to create products customers love. He also hosts The Everyday Innovator weekly podcast, sharing knowledge from innovation thought leaders and practitioners. Follow @ChadMcAllister