Lean business development is not just for start-ups. It’s also a must for businesses facing rapid change.
And in these uncertain times, that means even if you have an established business you need to learn how to make lean business development work for you.
What is Lean Business Development
Most people are familiar with “lean” through concepts such as lean manufacturing, first pioneered by Toyota, and lean start-up from the book of the same name by Eric Ries.
The principles of lean underpin efficiency and effectiveness. Not just in manufacturing or product development but much more widely.
Lean business development is about making:
“Better, faster business decisions, while being less wasteful and still doing things that are big”.
Eric Ries – The Lean Start-Up
Put simply, lean business development provides a roadmap for successfully developing new business in today’s highly volatile business environment.
Many people associate lean business development with Agile. That’s understandable.
After all, lean business development uses Agile techniques as part of its iterative and incremental innovation process.
However, lean business development is more than Agile. It is a highly efficient approach to getting your business idea to market quickly and cost effectively by:
- Developing your new business concepts not just for customers but directly with your customers
- Testing, measuring, and learning from selling minimum viable products and services at the earliest possible opportunity
- From these initial learnings, revising your offering and go-to market strategy
- Finally, repeating the cycle until you have enough data from real customers to optimise and scale up
By following this approach, you reduce risk, eliminate waste, and increase speed.
The lean business development roadmap
The lean business development roadmap is set out on our latest infographic.
The good news is that lean business development comes with its own toolkit. Moreover, the stages of the roadmap are very easy to implement.
Stage one: lean canvass
The lean canvass is an ingeniously designed one-page document that encapsulates the key elements of your business development plan.
Your lean canvass is a set of assumptions about how your organisation will create a winning value proposition that solves a genuine problem for real customers who are prepared to pay what you need for a profitable, scalable business venture.
Critically, it helps you boil down your value proposition into a simple to understand and easy to convey “elevator pitch”.
As you paint your lean canvass, it helps to ask yourself the following questions:
- Is the identified problem so much of a pain point that customers will pay for a solution?
- Does your proposed service or product solve the problem in a way that will appeal to customers and which will be profitable for you to deliver?
- What do you need to do to make your proposed business development financially viable?
- How will you position your product or service and acquire customers through your sales and marketing funnels?
Once you have completed your lean canvass and are absolutely clear on your unique value proposition and unfair competitive advantage that it confers, you need to “get out of the building” to test your business hypothesis on real-life customers.
Stage two: prototyping
It’s not easy to test ideas straight off the lean canvass with customers.
This is because ideas can be misconstrued. Usually, you need something tangible to present to obtain meaningful feedback. This is where prototyping comes in.
A prototype is the theory behind your product or service made into a physical concept that customers can see, touch or experience.
This could be as simple as a product mock-up, a computer simulation or a service you demonstrate without back end system integrations.
To increase speed and minimise waste it is important to invest only as much time and money to enable you to obtain feedback from real-life customers.
Many a prototype bites the dust at this stage. But no matter. Lean business development is about learning quickly and failing fast at minimal cost.
However, customer feedback may indicate that some prototypes have real commercial promise.
In which case, you take your prototype and further develop it into a minimum viable product (MVP). That is to say, a product or service with sufficient functionality for paying customers to be willing to buy.
Stage three: minimum viable product
“An MPV is the simplest version of a deployable product”.
Frank Robinson, CEO of SyncDev
As promising as any concept or prototype might be, the acid test is whether actual customers or potential customers are prepared to pay for what you offer.
By putting your product or service into the market as early as possible, you avoid lengthy and unnecessary work on non-essential add-ons.
At the same time, you obtain clear feedback on what is most important to early adopters. You also gain valuable insight into how to develop your product further for the wider market.
Your initial MVP may or may not be commercially successful.
If it fails, it has served a purpose as a “learning”. It also avoids developing further something that customers won’t see value in.
If your MVP proves to be a hit, the customer feedback enables new features to be added to improve your offering and increase its market value.
Stage four: iteration
From the initial MVP feedback, you move into an iteration cycle. Here you use agile sprints to bring to market, in rapid succession, improved versions of your business model, product, or service.
These iterations are essentially a series of experiments where you test your assumptions about the feedback you received from previous development cycles.
You are looking for the optimum combination of features and benefits that delivers the maximum value to your customers at the greatest potential profit to your organisation.
What’s great about these iterations is that you build them from direct customer input. Thus, enabling you to quickly identify improvements and potential trade-offs.
MVPs also save money, eliminate waste, and enable you to devote resources to scaling your business development based on customer proof as opposed to theoretical modelling.
Stage five: optimisation
The final stage of lean business development is optimisation.
Having developed your value proposition not only for customers but also with customers, you can now optimise your offering using the same lean techniques that led to its creation. In practice, this means:
- Continuing to iterate your product or service to stay ahead of the competition
- Deploying lean manufacturing to scale your production efficiently. For example, through automation and AI
- Leveraging digital technology to deliver services more cost effectively
- Running Kaizen events to drive continuous improvement right across your organisation
With lean business development, you never stop learning and improving. Even when you have become commercially successful.
Lean business development in summary
Many start-ups launched on a shoestring grew to world domination through lean business development: Facebook, Amazon and Uber among them.
It’s obvious that lean business development is in their DNA. They are constantly evolving their platforms and continually requesting your feedback on novel features and entirely new ventures.
If customers don’t like the latest developments, they quietly “retire” unpopular new features. If customers value them, they retain and further develop their innovations.
In this way, these businesses constantly adapt to anticipate and meet changing customer needs.
Clearly, lean business development works as well for established business as for start-ups. If you’ve not yet got started, it’s time to get aboard or risk being left behind.
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