Why the MVP Process Is the Key to Resilience
As the economy continues to lag, organizations have the opportunity to create sustainable growth and value. To capitalize on the market opportunity and demonstrate the business’s resilience, organizations should take a page from start-ups by adapting the Minimum Viable Product (MVP) Process, allowing them to quickly test, evaluate and validate their hypotheses with minimal risk and discover if the solution is worth pursuing.
Despite ongoing inflationary fears, combined with aggressive mood swings in the market, this recent McKinsey story stresses the importance of remembering that “organizational growth is an important facet of resilience: Growth leaders generate 80% more shareholder value than their peers over a 10-year period, and many high-growth companies were founded during economic downturns.”
“Growth leaders generate 80% more shareholder value than their peers over a 10-year period, and many high-growth companies were founded during economic downturns.”
However, a lack of strategy and overinvesting in an unproven concept that has yet to be validated by your customer can be detrimental to the business financially. This survey revealed that “around $1 million is wasted every 20 seconds collectively by organizations around the globe due to the ineffective implementation of business strategy.”
The founder of Medium and co-founder of Twitter, Evan Williams, said this about start-ups that could easily apply to many well-established organizations: “You know that old saw about a plane flying from California to Hawaii being off course 99% of the time—but constantly correcting? The same is true of successful start-ups—except they may start out heading toward Alaska.”
“Around $1 million is wasted every 20 seconds collectively by organizations around the globe due to the ineffective implementation of business strategy.”
Yet, many CEOs prioritize the bigger opportunity of market share for long-term sustainability over capitalizing on the value they create for customers. This HBR article speaks to the importance of why CEOs need to take a holistic approach: “These leaders either ignore some components of what I call the complete strategy landscape or don’t recognize the interdependencies among them.” The same article references adopting an agile approach to increasing the ROI of the initiative while minimizing risk: “Strategic adaptation must become an ongoing, iterative process of hypothesis, experimentation, learning and action, resulting in new programs, technologies or processes that increase value and growth.”
“Strategic adaptation must become an ongoing, iterative process of hypothesis, experimentation, learning and action, resulting in new programs, technologies or processes that increase value and growth.”
As for jump-starting positive cash flow, branding can support this through purpose and relevance, helping to curb any negative company perceptions and aiding in restoring revenue. While cost-cutting measures may temporarily help the financials and profitability, the long-term implications of just cutting costs could do more harm than good by further damaging the brand in the eyes of customers and employees, accelerating a download spiral in profits, eroding trust and being perceived as weak against competitors.
The MVP Process as the Pathway to Resilience
Used by start-ups and large tech companies, the Minimum Viable Product, or MVP, is a process designed to quickly evaluate and validate technology in the marketplace by delivering “What is necessary,” or the stripped down version of a product that allows the team to gather the maximum amount of proven customer knowledge with the least amount of effort.
The MVP process is distilled here into two simple questions. Whether you’re developing a product design, marketing plan, or writing code, always ask:
What is my riskiest assumption?
What is the smallest experiment I can do to test this assumption?
I believe that the MVP process shouldn’t be exclusive to start-ups that are building products, or for testing new features on an app or website, but should be expanded into company-wide programs that can be used to mine and reveal value/growth opportunities internally and externally. As described here, “the primary purpose is to test a business idea at minimal cost to find a response from the target audience and determine further iterations to enhance the value development.”
“The primary purpose is to test a business idea at minimal cost to find a response from the target audience and determine further iterations to enhance the value development.”
Whether expanding on the test of a business idea, be that for marketing, employee communications, new product ideas or features, or, of course, a new technology, it’s all about creating a quick, stripped-down version of your idea (be that clickable prototype, mock-up with text, or a landing page with a form) that your desired audience or customer can react to.
Start the MVP process through the lens of your customer, be that your employees or another audience, by following this customer development framework to:
Identify the need: The need you want or think you need to address may not always be clear. It may be best to start with the idea and work backwards to identify the need you are really looking to solve for.
Hypothesize potential solutions: Be that to address the true need of the original solution or to address a need that your solution doesn’t presently address.
Identify assumptions: That are of the greatest importance to your hypothesized solution and its impact on the business environment, dependencies, minimum requirements for that solution, or change management required. Or simply ask, “What must be true for this solution to be effective?”
Validate assumptions: By speaking with your desired audience, thereby gaining additional insights into your assumptions and testing your solution. There are many different ways you can go about validating assumptions.
Deploy your solution: After consolidating the feedback from the previous steps, deploy a minimal, yet viable, solution and get ongoing input from your audiences as to how the solution is addressing their needs
Constantly reevaluate and iterate: Based on audience data, use cases and feedback, which may mean pivoting on the design, messaging or functionality, or possibly abandoning the effort altogether and starting over.
As organizations continue to look for new growth opportunities and offerings that address unrealized customer needs, by applying the MVP process they can quickly validate assumptions with minimal risk, answer early on if this is worth solving for and identify what is the minimum viable product feature or solution they can go to market with that provides the greatest value for their audience.
Questions about how your organization should approach the MVP process? Email me here. As always, thank you for reading.
Photo by Glen Carrie on Unsplash