Are you still working LEAN or are you already making well-founded decisions?

Of course, this question is provocative. Nevertheless, it shows the problem of current decision-making in companies. LEAN may have been a good approach 20 years ago, when huge software monsters were still being built that were brought to market too late and untested with too many features. However, as always, once a problem has been solved by a solution, the solution needs to be reviewed to see if it is still functional in the new ecosystem. Unfortunately, the promise of the LEAN approach “fail fast to succeed” only works if the initial situation is known, it is clear what you are failing at and the right performance indicators are measured. Otherwise, during testing or release, you are working on a symptom that would never have existed if the right approach had been taken.

Large companies have learned “agile” from start-ups, but have also adopted the error rate.

Companies have learned a lot from start-ups - iterate quickly, react flexibly to the market and set up unconventional projects based on their own ideas. But what else have companies learned? 8 to 9 out of 10 start-ups fail mostly because nobody actually needs the solutions they have developed. Instead, another 50% of capital is sunk into marketing in order to somehow push poor solutions onto the market. Products are developed on the basis of ideas, customer or stakeholder wishes and not on the basis of real, ascertained user needs. Wishes are often imprecise and even misleading in order to form the basis of a successful product. And in most cases, the full potential that would be identified through real user research is not realized.

Fig.1 - Unrealized potential in product development

Generating creative ideas is only good up to the point where these ideas are validated and solve real problems. At the moment, many companies are more concerned with selling something well rather than taking the less risky route - namely developing products, services and systems that solve real problems in a way that is actually applicable for users. According to a 2017 McKinsey study in cooperation with Oxford University, 75% of all IT projects worldwide fail. And according to experts, these figures have not changed. 50% of projects fail before the product is released. And even if this 50% is already annoying, the 25% after the release is far more painful because it reduces trust in the company and damages the brand that was built up at great expense. This is not only really expensive and slow, but also extremely risky. Again, IBM provides us with a good explanation. If a project is developed needs-oriented in line with user requirements right from the start, it costs a factor of 1. If the user group is only included during development, the costs increase by a factor of 10 and after the release, the costs have to be calculated by a factor of 100. It is therefore no wonder that projects fail and companies get into difficulties.

The connection between price - quality - time

So the comfortable actionist way of working that has taken hold in so many companies has a big problem. People work according to buzzwords from savior coaches such as LEAN, a pure focus on customer centricity (or CX, which often falls short), design thinking, safE and many others, while ignoring valid concepts that experts have agreed on in international committees. The problem is similar to that of homeopathy. People want quick results and base their decisions on faith rather than knowledge. It simply feels better to “quickly” work out a solution yourself or be shown one. But if they only work out a solution with their own team, in the worst case - and unfortunately this happens quite often - it is only relevant for this small group. However, it is precisely this group of specialists in the field that is not the main target group, as the company needs to generate solid sales, grow and be able to react robustly to crises. In other words, exactly what many start-ups and now large companies do not (or no longer) do.

Fig.2 - Robust through the balance between time, money and quality

For example, if you only rely on the wishes communicated by sales employees, there is no innovation. Because it is always a look into the past. A product has been built and delivered, certain limitations have become apparent and you are working on problems that might not even exist without the current solution.

Or if you are constantly observing your competitor in order to be able to react, you run the risk of losing sight of your own strategic goals. Because in most cases you don't know the strategic goals of your competitor. This also means you miss out on opportunities for innovation or disruption because you only ever draw conclusions from the past. If you want to achieve a short time to market cost-effectively, you can only do so with an efficient way of working. Actionism and uncontrolled driving around without a plan, as in some “agile” companies, has never been efficient. One restructuring follows the next. Employees are burned or made redundant, only to realize shortly afterwards that they were the very talents needed for the next step.

As long as people use and pay for the products and services that are built, it is a good idea to take them into account in the planning!

If the user experience is poor, people will not pay for it a second time and trust in the company and the brand will dwindle. It's time to want to understand people again - because in the end, the only person left is the user. There will no longer be anyone who spends money on a product or service in order to use it. This is exactly what human-centered design is all about. It is not a rigid process, but a way of thinking that enables us to turn a holistic view of complex issues into well-founded decisions. It may sound slow and boring and contradict the dopamine-addicted, social media-ridden brain, but we are on the way to a completely new future that can no longer be sustained with backward-looking concepts. If the right and important data is collected in an initial phase, higher quality can be achieved in a much shorter time afterwards. The risk of failure is much lower and real innovations can emerge.

If we take the needs of real users (which includes customers as well as employees) seriously - and not just pay attention to the pure transaction when buying or, even worse, the silent mail from the sales team or marketing - then completely new possibilities open up. First the product or service must be viable, only then comes the marketing. The customer experience can only be created if the product already exists and, moreover, not all users are customers, all customers are users of a system - which leads to even greater risks in the B2B sector. Social changes, the development and use of technologies and the most pressing issues such as skills shortages and education have had a significant impact on the way people work. The skills and abilities of users, as well as their problems and needs, are different than they were 10 years ago. The way in which products, services and systems are used is different. It is naïve to believe that we can find solutions by looking to the past. Even generative AI is of no help in outlining potential beneficiaries - it only works with probabilities of past, trained data - and this will always remain old data that nobody can understand the context in which it was collected. And don't get me wrong. AI is a valuable tool that can shorten work steps, but only if it is used correctly. Again, bad data in - bad quality out.

Faster and better quality on the market with low initial costs

The human-centered approach of needs-based innovation always applies wherever there is a human component, both externally, i.e. products and services offered by a company, and internally, i.e. the corporate culture and processes of a company. Innovation or even disruption can only succeed if they understand the actions of the people who use the products, services and systems, classify the framework conditions and weigh up the needs of the stakeholders in the overall complex with the strategic goals of the company. This makes companies robust and enables them to react quickly to changes - if they have not already recognized the signs of the times and made forward-looking decisions.

In this fast-moving world, it would therefore be time to approach it like top athletes. First, take the time to warm up and understand the conditions. Only then can top performance be achieved. In human-centered design, this means that it is first important to understand the real problem of the right group of people (the users) so that a high-performance solution can then be developed quickly, agilely and cost-effectively. Need-driven innovation is a strategic tool for companies that want to remain or become risk-conscious, attractive and sustainably successful. And the best thing about it: all of this is based on international standards.

Would you like to know more? I look forward to hearing from you.