This post first appeared on IvyExec.com.
When teams start working on a new product or service, they often fall in love with an idea, and jump straight to developing a beautiful solution. They often don’t spend enough time choosing the right problem to solve.
Starting with a fully fleshed out solution and then backing out the problem statement is risky. Think of the Segway, a beautifully engineered product that never delivered on the promise of transforming urban transportation. It is much easier to start with a great problem statement, then come up with solutions that solve real customer needs.
How do we pick a great problem to solve? There are lots of frameworks out there, including the Lean Startup movement, which is great for teaching teams to validate their hypotheses in the market, and the business model canvas, which encourages entrepreneurial teams to take a more holistic view to their business. However, most of these approaches focus on testing the product once it has been created. We need a framework for defining and iterating at the problem definition level.
For initiatives that are still in discovery stage, I have found that the A. G. Lafley and Roger Martin’s Playing to Win framework works very well. Lafley was the CEO of Procter and Gamble (P&G) from 2000 to 2009, and the Playing to Win framework is what P&G used to double its sales, quadruple its profits, and increase its market value dramatically during his tenure.
The beauty of this framework is that it is extremely simple, and it works on projects at any scale. We don’t have to work for an $84B company to apply it. All we have to do is answer five questions.
- What is our winning aspiration?
This is the first question to answer. Why are we taking on this initiative? How do we define success? How do we know if we have won?
This is the single most important question that needs to be answered before the initiative gets started. The winning aspiration may have to do with helping customers solve a key problem, or to grow the company’s revenue dramatically, or to improve internal productivity, or a combination of various things. Discussing and defining success metrics at the get-go is key to keeping everybody aligned and focused on the main thing.
- Where will we play?
The second question provides focus to the area of interest. What is our beachhead market that we will focus on in the beginning? What types of companies are our ideal customers? Who are our buyers and users? What are their needs, wants and expectations? If this is an international initiative, which country do we start in?
Note that these “where to play” parameters are placeholders until they are validated through primary market research. Coming up with a set of first guesses inside the building is a necessary first step. The rest of the iterations need to happen outside the building via customer development.
- How Will We Win?
The third question explores how to make customers (and therefore, yourself) successful. How can we solve the problems identified? What benefits might the customer derive from these offerings? What’s in it for the customer? What’s in it for us?
As with the “Where to play” parameters, “How to Win” ideas need to be validated in the market. This is where the discipline of applying primary market research and building and testing Minimum Viable Products (MVPs) in the market will really pay off. The key is to break down the problem and solution into small chunks, and test and iterate each chunk in the field.
- What Capabilities Do We Need?
The fourth question looks at the team’s core competencies, and uses this as a basis to come up with an actionable plan to build the solution.
Core competencies and capabilities can be pre-existing (often the case for established companies pursuing an innovation initiative). Alternatively, they can be built from scratch (often the case for startups). A third way is to acquire them through partnership or a merger and acquisition event.
Capabilities can span technical disciplines (hardware and software development, or deep understanding of a related scientific discipline) and business disciplines (for example, a huge customer list from another business unit coupled with a viable sales channel to reach these customers is a core asset).
- How Do We Manage the Execution of this Strategy?
Vision without execution is hallucination. This last question makes sure all the great strategy work done up to this point can be turned into reality. How we come up with a high level program plan with milestones and deliverables, a staffing strategy to get the job done, and a way to keep communications open and to manage and keep track of progress, is critical to making sure the strategy ends up with a viable new product or service offering.
As tempting as it might be to jump straight to creating solutions, it really pays to invest in choosing and defining the right problems to solve. It will save time and money and will help create a better solution that solves customer needs in the long run.