Blow Up The Business Case

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Transcript of Blow Up The Business Case

  • BLOW UP THE BUSINESS CASE

    @barryoreilly #LeanEnterprise1

  • 2PMO + Finance PMO

    Iteration 0 | 1 | 2 | 3 | 4Fuzzy front end The last mile

    $JLOHWHDPV

    Centralized QA 72SHUDWLRQV

    Study+ approval

    Design+ planning

    Integration+ QA

    Development

    Testing+ showcase

    Analysis

    Release &operation

    TRADITIONAL BUSINESS PARADIGM

  • 2015 PRODUCT MANAGEMENT INSIGHTS

    3

    44% include user feedback throughout

    the development process

    66% of products take or more 6 months

    to launch

  • Its typical for 50% of the total product development time to be spent

    on the fuzzy front end

    - Don Reinersten

    4Don Reinersten, The Principles Of Product Development Flow

  • STOP WRITINGSTART LEARNING

    5

    Sketch out ideas with the right people, at speed

  • BREAKING DOWN BARRIERS

    6

  • CROSS FUNCTIONAL COLLABORATION

    7

  • 8Alexander Osterwalder and Yves Pigneur, Business Model Generation

  • 9

  • 10

    GO, LOOK, SEE

    User research by the people that are designing solutions

    Get out of the building

    Challenge beliefs through experience

  • LEARNING OVER EARNING

    11

    Build a runway of questions to ask, not requirements to build

  • 12

    Minimize thetotal time through

    the loop

    LEARN

    '($6

    &2'(DATA

    MEASURE

    BUILD

    Eric Ries, The Lean Startup

    IMPLEMENT AND AMPLIFY LEARNING LOOPS

  • 13

    MINIMUM VIABLE PRODUCT

    Delightful

    Usable

    Valuable

    Feasible

    Delightful

    Usable

    Valuable

    Feasible

    ThisNot this

    Diagram inspired by Jussi Pasanen, with acknowledgments to Aarron Walter, Ben Tollady, Ben Rowe, Lexi Thorn, and Senthil Kugalur.

    TEST WITH SMALL, THIN SLICES AT SPEED

  • 14

    LAUNCH AND LEARN

  • 15

    &KDQJHVin Value

    Time

    %LJ'LVFRYHU\3RVLWLYH%ODFN6ZDQ

    6PDOO(UURUV

    THE PRINCIPAL OF OPTIONALITY

    Nassim Taleb, Antifragile

  • 16

  • Barry OReilly, How To Implement Hypothesis-Driven Development http://barryoreilly.com/2013/10/21/how-to-implement-hypothesis-driven-development/

  • We Believe That ________________________ Will Result In __________________________

    We Will Know We Have Succeeded When ______________________________________

    Reducing the prices hotel after 7pm

    increased number of booking for tonight

    conversion improves by 10% in 4 hours

  • We Believe That ________________________ Will Result In __________________________

    We Will Know We Have Succeeded When ______________________________________

    Reducing the prices hotel after 7pm

    increased number of booking for tonight

    conversion improves by 10% in 4 hours

    Which Is Worth 100,000

  • INVESTING BASED ON EVIDENCE

    22

    Making better decisions based on learnings

  • 23

    Doubt is not a pleasant condition,

    but certainty is absurd.

    - Voltaire

  • 24

  • 25

  • REDUCE UNCERTAINTY WITH EXPERIMENTS

    26

  • 27

  • 27

    14 people

    261,000

    12 weeks

  • 28

  • It is not enough to do your best; you must know what to do, and then do your best.

    - W Edward Deming

    29

  • PRODUCT / PROFIT CURVES

    30

  • WHY INNOVATION LOOKS COSTLY

    Traditional management & nancial accounting measures are not designed for innovation More eective, for exploiting well understood domains or established business models and productsWhen exploring, accounting must not be ignored or irrelevant -- simply needs to be interpreted dierently. Established practices provide little insight on if customer or user will love or engage with a new product return on investment nancial ratio analysis cash ow analysis

    31

  • HOW TO CREATE A FRAMEWORK FOR DECISION MAKING

    Innovation Accounting refers to the rigorous process of dening, experimenting, measuring and communicating the true progress of innovation for new products, business models or initiatives It creates accountability and transparency in an area that can be ambiguous and opaque It allows intrapreneurs to measure the impact of their improvements and the financial decision-makers to to measure the macro return of their investments. Turn leap of faith assumptions into a quantitative financial model

    32

  • HOW DO WE SHOW THE CFO WE ARE MAKING PROGRESS?

    33

    Stakeholder Measure Current Target Trend

    CustomerCustomerCustomer

    BusinessBusinessBusinessBusinessBusiness

    % users that complete sales ow 30% 45%

    % retention 20% 25%

    Net Promoter Score 44 60

    % visits to sign up for service 20% 25%

    % conversion to paying customers 15% 20%

    Customer acquisition costs 0.50 0.25

    Life time customer vale 12 20

    % attrition 30% 15%

  • ONE METRIC THAT MATTERS

    34

    Stakeholder Measure Current Target Trend

    CustomerCustomerCustomer

    BusinessBusinessBusinessBusinessBusiness

    % users that complete sales ow 30% 45%

    % retention 20% 25%

    Net Promoter Score 44 60

    % visits to sign up for service 20% 25%

    % conversion to paying customers 15% 20%

    Customer acquisition costs 0.50 0.25

    Life time customer vale 12 20

    % attrition 30% 15%

  • MEASURE USER AND CUSTOMER ENGAGEMENT

    35

  • GROWTH METICS AND OUTCOMES

    36

    Element Purpose Relevant Metrics

    What we will use?

    Acquisition

    Activation

    Retention

    Revenue

    Referral

    Generate attention of product

    Trac, Mentions, Cost per Click, Cost of

    Acquisition

    Turn drive-by visitors into customers that

    are enrolled

    Sign ups, Completed on-boarding process,

    Used service once

    Convince customer to return repeatedly or stickiness behaviour

    Time since last visit, daily/month active

    users, churns

    Business outcomes dependent or

    business model

    Customer life value, conversion rate,

    shopping cart size

    Viral and word of mouth invitations to

    other customers

    Invites sent, viral coecient, viral cycle

    time

  • BASED ON EVIDENCE UNDERSTAND THE FUTURE UPSIDE

    37

    Understanding the upside of new customers, how often they return, convert, share or recommend our product means we can use the evidence of the engagement level to steer future decisions and potential for return on investment

  • CONCLUSIONTell the story as a narrative with a runway to succeed

    38

  • TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED

    17

    39

  • TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED

    17

    Aspirational Customer Journey

    40

  • TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED

    17

    Aspirational Customer Journey

    Product Hypotheses

    41

  • TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED

    17

    Aspirational Customer Journey

    Product Hypotheses

    Design Experiments

    42

  • TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED

    17

    Aspirational Customer Journey

    Product Hypotheses

    Design Experiments

    User Story Map

    43

  • TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED

    17

    Aspirational Customer Journey

    Product Hypotheses

    Design Experiments

    User Story Map

    Data/feedback

    44

  • @barryoreillywww.barryoreilly.com#leanenterprise @jezhumble | @jemolesky

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    2015 ThoughtWorks, Inc.

    45

    THANK YOU