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Skip to 0 minutes and 0 seconds Let’s look at kind of a specific example of what this might mean. I would characterize the earlier techniques so the Charles Taylors, the Michael Porters, the idea that planning and prediction is important and will get you to a good outcome is kind of things that are scale friendly. So they’re oriented towards achieving scale with the assumption that hopefully we have something that’s worth scaling. Whereas innovation friendly methods don’t assume that. They assume that we could create something valuable and in the digital age it’s pretty easy to achieve scale, relatively speaking, but, we need to figure out something that’s valuable first because that’s the hard part, that’s the important part, that’s where the money is.

Skip to 0 minutes and 43 seconds So let’s kind of contrast these things. And a skill friendly take on how to do things. We write a plan becuase plans create certainty, and we still have a lot of historical baggage where we place faith in plans, maybe in places where we shouldn’t put so much importance on the plan. Then we raise capital because we gotta have an office. Establish ourselves and get a whole bunch of people together to build this big thing. We’re people of integrity so we’re going to build something. That’s our dream. We’re going to build the best possible version of this thing because that’s what such people do.

Skip to 1 minute and 15 seconds And I would absolutely not say to produce bad product, but we’ll kind of look at what the difference is. Then we have to cost reduce this because we must make sure that our costs are below our revenues when we get out of the gate. We have to make sure we sell it to lots of retailers so that we can achieve scale and then maybe we can take look at the customer a little more here and we hold a focus group. Something that big companies do when they want to have a person of the street, tell them what they want to here.

Skip to 1 minute and 42 seconds And maybe this group tells us that gee, this talking bicycle compass, we would love to have it tell us where our friends are, and so we delay more, and we add this feature, and hopefully, we release something that’s successful and people like and all the scale that we’ve put into place actually means something. But if you assume that, hey, every product has maybe a 20% success rate. We probably spend a lot of time and money on something that is extremely high risk, which is just kind of arithmetically not good.

Skip to 2 minutes and 15 seconds Instead if we have an innovation-friendly approach to this, which is what you’re going to learn and what Agile is about, we start by observing our buyers, so we go out and we look at cyclists. Why do they cycle? What are the triggers that make them want to do this? What jobs, habits, desires orbit this activity of cycling. And then we ask, are there things there that aren’t that great, jobs that they do, tasks that they have that are difficult for them? And here we’re going to assume that we’ve found that they get lost a lot, it’s harder for them to pull out their phone and find out where they are, and they don’t have a good alternative.

Skip to 2 minutes and 50 seconds Then, and this is where things start to get really different, instead of building a big complicated product and hoping we’re going to be okay, maybe we just duct tape an iPhone to somebody’s bike, call them, and track them on GPS to see if that helped them. Did they care? Did they ask us if we’d do it again for them next weekend? Did they seek out some kind of sign-up that we gave them that they could optionally go and do. And if we find that that’s true and only if we find that that’s true, we go forward and we have a focal proposition that we build our product around.

Skip to 3 minutes and 24 seconds And we don’t build a crummy, cheap product, but we build one that’s really, really tightly defined around what we decided was the important part of this proposition. And then we iterate in the small batches that are so important to Agile, and on a success basis, we scale this up. But we’re constantly looking at whether or not what we’re creating is valuable to the user or not. This is the main difference between a lot of the concepts that came before and the application of agile and it’s kind of sibling concepts that help drive innovation.

Scale Friendly vs. Innovation Friendly

In this video, Alex discusses the differences between being scale friendly and innovation friendly. As you watch this video think about your own organization. Is your current organization scale or innovation friendly? How might this help or hinder using agile? Share your thoughts in the comments section and read other learners’ contributions.

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This video is from the free online course:

Getting Started with Agile and Design Thinking

Darden School of Business, University of Virginia