History is full of companies that were initially very successful but failed to innovate when the market changed, says Jeremy Brandt, founder and CEO of We Buy Houses, an online service that connects home sellers with potential buyers. And that informs the way his company operates.
“At We Buy Houses, we continuously identify ways to improve our products, taking technology we've built internally for ourselves and turning it into a commercial product for our clients," says Brandt.
“Agile and similar methodologies are great for consistently moving the ball forward," he continues. "Innovation is about coming up with new ideas, processes and products to stay ahead of the competition and in line with what the market needs. Once the innovation happens, it's all about execution, and that's where agile plays a huge role."
No amount of team discussion and/or focus group discussion can perfect a product or service until it's put into real-world use with clients who pay for it. — Charles Gaudet, founder and CEO, Predictable Profits
Design thinking is an agile product innovation methodology traditionally used by designers to solve complex problems. It is a solution-focused and action-oriented way of creating a preferred future.
Over the years, design thinking has taken on many faces, but the Institute of Design at Stanford University proposed a groundbreaking and now frequently used series of steps, which are:
Empathize
Empathize mode is the first step on your product innovation journey. Here you're trying to understand your customers' physical and emotional needs, how they think about the world and what is meaningful to them.
Observing what people do and how they interact with their environment can give you clues. You can engage your users by preparing some questions you'd like to ask, for instance:
- If you are standing in line at the grocery store, what app are you most likely to view first and why?
- If you see a new product on a retail store shelf but it's too high to reach, what packaging feature would make you go out of your way to take a closer look?
Elicit stories and always ask "Why?" to uncover deeper meaning.
Define
Think about what stood out to you when you talked and observed people. What patterns emerged? Develop an understanding of the type of person you are designing for—your customer.
Select a set of needs that are important to fulfill. In the Define stage, you're working to express insights you developed. Then, you can articulate a point of view by combining three elements—customer, need and insight—as an actionable problem statement that drives your product innovation.
Ideate
You can ideate by combining your conscious and unconscious mind—that is, connecting your rational thoughts with your imagination. For example, in a brainstorm you leverage your employees' ability to reach new ideas by building on others' ideas.
Adding constraints, surrounding yourself with inspiring materials and embracing misunderstanding can help you reach further in your product innovation than you could by simply thinking about a problem.
In a recent ideation phase, Charles Gaudet, founder and CEO of small-business coaching firm Predictable Profits, sought to develop a new process that helps clients get better results by focusing their efforts in key areas and being accountable for concrete activities in those areas.
“We decided to find the common denominator between top performing entrepreneurs and an 80s martial arts movie, and the end result was The 'Transformative Action Protocol,'" Gaudet explains. "This systematic approach has been the impetus of more consistent progress than anything we've offered to our customers so far."
Prototype
The Prototype mode is where you create a representation of your product to hone into a final solution. A prototype is anything a user can interact with, but you should build with the user in mind. What do you hope to test with the user? What sorts of behavior do you expect?
Test
The final stage of this product innovation model is to put your prototype in the users' hands—or your users within an experience. (Ideally you want to be able to test your prototype within a real context of the user's life.)
Let your testers interpret the prototype. Watch how they use what you have given them and how they handle and interact with it. Then listen to what they say about the prototype, and the questions they have about it.
“No amount of team discussion and/or focus group discussion can perfect a product or service until it's put into real-world use with clients who pay for it," says Gaudet. “Accept that your first iteration won't be your best. The most important element of innovation is to put together a minimum viable product that's designed for one purpose: to collect user data."
Assuming you want to dip your toe into design thinking, or agile product innovation more generally, how should you get started?
“Take any product or service you have, and interview your customers—as well as people who didn't buy from you—about why they did or did not buy," says Brandt.
“Ask what do they love? What would they change? What didn't make sense?" he continues. "Build knowledge around what customers actually need, then iterate through small changes to make your product/service better—removing what is confusing, adding more of what makes customers happy and converting more people into clients!"