If it isn’t broken, don’t fix it. Usually, that’s the mindset ruling an efficient business. The cost of change itself doesn’t always meet the value of doing things differently. However, when new competition is spreading like wildfire, the demand for change is bigger than ever. Unicorns and hockey stick ventures are stealing your market. And it’s not likely to change anytime soon.
Sometimes, the right answer is to continue business as usual. But sometimes change is needed. How do you spot whether there’s a genuine need for change? And even if all alarm bells are ringing and doomsday is approaching with great haste – how do you know what to change? If change is expensive, and business is bleeding – how do you take decisive action?
Change at the core
A typical approach is to change the product design or the marketing. Sometimes radical decisions are made, and the entire C-level is replaced. But very rarely we touch what is at the core of the business, whether it be the core proposition (or the core product), the core values or the primary business model.
The reason for not changing the core business will usually be: It’s what we were founded on. It’s what kept us alive all these years. It’s our brand. It’s who we are.
Donald Sull, a global expert on strategy and execution in turbulent markets, calls it “Active Inertia“: You can see that something isn’t working, so you put in “an extra effort”, change operations or fire the boss. But you don’t stop and think about what’s really the problem. You don’t know where and what to change, and you don’t spot the opportunities for innovation.
We all need to make mistakes
The truth is that we all need to make mistakes to learn what works the best. We all need to adapt to reality and a world ever changing.
Take a look at some of the biggest companies today.
- Apple almost faded to nothing, before dropping most of their product line of computers, cameras and PDAs to focus on a portable music player, which evolved into the iPhone and a huge ecosystem for software and music.
- Google had trouble making money on the world’s most popular search engine. When evolving into an ad-based platform based on relevancy and bidding, Google turned into a multibillion business within a year.
- IBM used to be a hardware manufacturer. Now IBM has evolved into a service business.
All right, so all these large corporations have made major changes to their business at some point in time. Does that mean that we also need to change the core of our business in order to succeed? The answer is a constant: Maybe! The point is that you need to evaluate the market, your position, your offerings and your core values always. We shouldn’t seek the change for the sake of change. But we mustn’t fear change. Change can be expensive. Not changing can be fatal. The trick is to know when change is appropriate.
Analysis vs. Synthesis
Analysis is our friend. It’s an ally when we need backup. It provides data and insight that we can act and make decisions upon. When we suspect, something is not optimal, we can have people look at the numbers, look at the market, summarize and conclude. But analysis is always based on a certain set of variables. The reality is that the world is complex, even though many of these variables are small and can seem insignificant. However, to cover every variable and determine whether or not they actually are significant is a colossal analytical task. Which is why we either end up with analysis we don’t really trust, or the so-called paralysis by analysis, where the amount of (sometimes contradictory) data is overwhelming.
Enter synthesis: If analysis is “prepare by looking and thinking”, synthesis is “do something and learn from it”. With the massive success from companies taking an user centered approach, actually testing ideas on users has become very popular. With methods from the service design-paradigm, leaving the office and exploring the users’ context have become everyday tools. Processes like Design Thinking, where analysis and synthesis walk hand in hand make sense, because we’re not only working in the lab on a theoretical or strategic level, we’re actually giving form to concrete ideas and testing them in their natural context.
Use design sprints
When synthesis and analysis are combined, you don’t just have an excuse to stop, look at the data and reflect, you also get a chance to test an idea in real life context. That is what design thinking is all about: Analyze while giving form to your ideas and gather input from real life testing. Realizing ideas from an early stage provide important knowledge on business goals, production limitations, user needs and how we measure success. The idea is to test and learn, and iterate from the beginning, instead of having the mindset of nailing the solution in the first go.
Design Sprint is a method you can use to accomplish this. In the book “Sprint” Jake Knapp explains how the method was evolved at Google to work smarter and more productively when creating new concepts. These sprints are not about producing aesthetic results and graphic design. It’s a method to test whether or not we can design our way out of a problem in five days. The method is simple: Over a course of five days, we go through a series of workshops and methods to gather information and define the problem, sketch and refine an idea, and create a prototype that we ultimately can test on real life users. The output is essentially just a confirmation or rejection of our design idea. But the real outcome of such a process is a much better understanding of the problem, the business problem, the users’ needs and the context for the solution. Sometimes we do nail it, and we’ve made a huge shortcut into a usually lengthy and tedious design process. At other times we realize, what it is, we don’t know enough about, and we can change the project before we use the entire budget on a mislead hunch.
When to innovate vs. how to innovate
You can use the principles from Design Thinking and Design Sprints to explore if there’s a real need to change the core of the business. Instead of just looking at the numbers, you should leave your office and inspect the real world. What does you offering look like in a context? What are the emotions going through your customers? Can you create an actual improvement?
We’re all looking to build a better mousetrap, a term used by entrepreneurs trying to win fame and fortune on building better products. However, there has been issued more than 4,400 patents for better mousetraps (as in literal patents for better mousetraps). Some of them are bound to be better than the original design. But just a little better won’t cut it. As the saying goes – we need to do it 10x better. Not 10%.
The question you should keep asking yourself is this: How do we innovate? The answer depends on what problems you need to focus on. Design Sprints can help to create an understanding of what a new approach to solving your costumers’problems could be, and if it will work in real life context. And it will suggest if you should be looking at your core values, products or maybe your business model.
Remember to remain critical to innovation as well as status quo. If introducing innovation is more expensive than the value it brings, maybe you need to focus elsewhere.
As new competition may pop up at any time in any form, youmight want to do frequent Design Sprints to keep the gears grinding and the perspective fresh. Plan a Design Sprint 4-10 times a year. Take it seriously, and try to compete with your own business. Can you create a better design, solving the same problems?
Blockbuster lost to Netflix. But don’t forget, that Netflix itself evolved. It started out as a “rent-a-dvd-by-post”-subscription service. In the end, it found a better design for its core business, and changed the company completely. Blockbuster didn’t.
If you don’t try to be your own competition, someone else will. And if you don’t challenge the core, it’ll be harder to validate it.