BLOW UP THE BUSINESS CASE

@barryoreilly #LeanEnterprise1

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PMO + Finance PMO

Iteration 0 | 1 | 2 | 3 | 4Fuzzy front end The last mile

Ȋ$JLOHȋ�WHDPV

Centralized QA Ζ7�2SHUDWLRQV

Study+ approval

Design+ planning

Integration+ QA

Development

Testing+ showcase

Analysis

Release &operation

TRADITIONAL BUSINESS PARADIGM

2015 PRODUCT MANAGEMENT INSIGHTS

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44% include user feedback throughout

the development process

66% of products take or more 6 months

to launch

It’s typical for 50% of the total product development time to be spent

on the fuzzy front end

- Don Reinersten

4Don Reinersten, The Principles Of Product Development Flow

STOP WRITINGSTART LEARNING

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Sketch out ideas with the right people, at speed

BREAKING DOWN BARRIERS

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CROSS FUNCTIONAL COLLABORATION

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8Alexander Osterwalder and Yves Pigneur, Business Model Generation

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GO, LOOK, SEE

User research by the people that are designing solutions

Get out of the building

Challenge beliefs through experience

LEARNING OVER EARNING

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Build a runway of questions to ask, not requirements to build

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Minimize thetotal time through

the loop

LEARN

Ζ'($6

&2'(DATA

MEASURE

BUILD

Eric Ries, The Lean Startup

IMPLEMENT AND AMPLIFY LEARNING LOOPS

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MINIMUM VIABLE PRODUCT

Delightful

Usable

Valuable

Feasible

Delightful

Usable

Valuable

Feasible

ThisNot this

Diagram inspired by Jussi Pasanen, with acknowledgments to Aarron Walter, Ben Tollady, Ben Rowe, Lexi Thorn, and Senthil Kugalur.

TEST WITH SMALL, THIN SLICES AT SPEED

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LAUNCH AND LEARN

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&KDQJHVin Value

Time

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6PDOO�(UURUV

THE PRINCIPAL OF OPTIONALITY

Nassim Taleb, Antifragile

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Barry O’Reilly, How To Implement Hypothesis-Driven Development http://barryoreilly.com/2013/10/21/how-to-implement-hypothesis-driven-development/

We Believe That ________________________ Will Result In __________________________

We Will Know We Have Succeeded When ______________________________________

Reducing the prices hotel after 7pm

increased number of booking for tonight

conversion improves by 10% in 4 hours

We Believe That ________________________ Will Result In __________________________

We Will Know We Have Succeeded When ______________________________________

Reducing the prices hotel after 7pm

increased number of booking for tonight

conversion improves by 10% in 4 hours

Which Is Worth £100,000

INVESTING BASED ON EVIDENCE

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Making better decisions based on learnings

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Doubt is not a pleasant condition,

but certainty is absurd.

- Voltaire

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REDUCE UNCERTAINTY WITH EXPERIMENTS

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27

27

14 people

£261,000

12 weeks

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It is not enough to do your best; you must know what to do, and then do your best.

- W Edward Deming

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PRODUCT / PROFIT CURVES

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WHY INNOVATION LOOKS COSTLY

▫︎ Traditional management & financial accounting measures are not designed for innovation

▫︎More effective, for exploiting well understood domains or established business models and products

▫︎When exploring, accounting must not be ignored or irrelevant -- simply needs to be interpreted differently.

▫︎ Established practices provide little insight on if customer or user will love or engage with a new product

▫︎ return on investment

▫︎ financial ratio analysis

▫︎ cash flow analysis 31

HOW TO CREATE A FRAMEWORK FOR DECISION MAKING

▫︎ Innovation Accounting refers to the rigorous process of defining, experimenting, measuring and communicating the true progress of innovation for new products, business models or initiatives

▫︎ It creates accountability and transparency in an area that can be ambiguous and opaque

▫︎ It allows intrapreneurs to measure the impact of their improvements and the financial decision-makers to to measure the macro return of their investments.

▫︎ Turn leap of faith assumptions into a quantitative financial model

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HOW DO WE SHOW THE CFO WE ARE MAKING PROGRESS?

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Stakeholder Measure Current Target Trend

CustomerCustomerCustomer

BusinessBusinessBusinessBusinessBusiness

% users that complete sales flow 30% 45%

% retention 20% 25%

Net Promoter Score 44 60

% visits to sign up for service 20% 25%

% conversion to paying customers 15% 20%

Customer acquisition costs £0.50 £0.25

Life time customer vale £12 £20

% attrition 30% 15%

ONE METRIC THAT MATTERS

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Stakeholder Measure Current Target Trend

CustomerCustomerCustomer

BusinessBusinessBusinessBusinessBusiness

% users that complete sales flow 30% 45%

% retention 20% 25%

Net Promoter Score 44 60

% visits to sign up for service 20% 25%

% conversion to paying customers 15% 20%

Customer acquisition costs £0.50 £0.25

Life time customer vale £12 £20

% attrition 30% 15%

MEASURE USER AND CUSTOMER ENGAGEMENT

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GROWTH METICS AND OUTCOMES

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Element Purpose Relevant Metrics

What we will use?

Acquisition

Activation

Retention

Revenue

Referral

Generate attention of product

Traffic, Mentions, Cost per Click, Cost of

Acquisition

Turn drive-by visitors into customers that

are enrolled

Sign ups, Completed on-boarding process,

Used service once

Convince customer to return repeatedly or stickiness behaviour

Time since last visit, daily/month active

users, churns

Business outcomes dependent or

business model

Customer life value, conversion rate,

shopping cart size

Viral and word of mouth invitations to

other customers

Invites sent, viral coefficient, viral cycle

time

BASED ON EVIDENCE UNDERSTAND THE FUTURE UPSIDE

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Understanding the upside of new customers, how often they return, convert, share or recommend our product means we can use the evidence of the engagement level to steer future decisions and potential for return on investment

CONCLUSIONTell the story as a narrative with a runway to succeed

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TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED

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TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED

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Aspirational Customer Journey

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TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED

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Aspirational Customer Journey

Product Hypotheses

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TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED

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Aspirational Customer Journey

Product Hypotheses

Design Experiments

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TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED

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Aspirational Customer Journey

Product Hypotheses

Design Experiments

User Story Map

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TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED

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Aspirational Customer Journey

Product Hypotheses

Design Experiments

User Story Map

Data/feedback

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