Like most businesses, associations have a lot of bulk. Maybe that’s because it’s hard to trim the fat.
That said, eliminating wasted efforts and minimizing defects can lead to new products and innovations, according to a new whitepaper by Elizabeth Engel, CEO and chief strategist for Spark Consulting, and Guillermo Ortiz de Zarate, director of information systems for National Council of Architectural Registration Boards.
From the whitepaper: “Is there a process that can help associations achieve our missions, stay in business, find problems worth solving and make a real and meaningful difference for our members, achieving the sustainable, dynamic impact we seek? Your authors would argue that there is: lean startup methodology, as most fully developed and articulated by Eric Ries in his 2011 book ‘The Lean Startup.’”
I asked Engel to break it down for us, and following is our Q & A. Thanks to Engel for her contribution!
Q: How would you simply explain lean startup methodology?
A: Lean startup is an innovation system developed by Eric Ries that came out of his experiences with lean process improvement, which is all about reducing waste and defects and working more efficiently and effectively. Ries had an insight: It doesn’t matter how quickly you’re moving if you’re headed in the wrong direction.
Lean startup methodology is designed to help make sure you’re going the right way and going there quickly and efficiently.
Q: Why is it important?
A: To quote Guillermo Ortiz de Zarate, my co-author, “There’s no bigger waste than investing resources working on the wrong thing.”
Lean startup methodology has been being used not just in startups, but also in more conventional for-profit business, for several years. And that makes it easy for associations to dismiss: “We aren’t a startup – or even a for-profit. This isn’t for us.”
Guillermo and I would argue that associations share a key characteristic with startups: tight resources (and by that, we mean human as well as financial resources). Those perpetually tight resources are precisely why this methodology is so useful for our community.
Q: How do you think associations, specifically, could benefit from practicing this methodology?
A: In associations, decision-making is often driven by anecdotes, untested assumptions and the HIPO (highest income/influence person’s opinion). “One of our board members talked to a member who said she wants X so therefore everyone must want X and therefore we have to go build X immediately.”
But are you sure you’re solving a real problem that’s important to at least one of your key audiences, in a way that’s useful and makes sense to them – and that they’re willing to pay?
That very situation was what sparked Guillermo’s interest in lean startup methodology. His association, the National Council of Architectural Registration Boards, is one of the case studies in the whitepaper, and he relates two stories: one of a project that took place before NCARB starting using lean startup that was NOT the right problem, the right audience or the right solution; the second of a project after NCARB “saw the light” that was far more successful for them.
Q: Walk me through the build-measure-learn cycle…what’s involved?
A: The build-measure-learn cycle is the core of the methodology.
In lean startup, you build first. That means you’re trying to get the Minimum Viable Product (that is, the minimum version of the product you can build with the smallest investment of resources and effort that would still be real enough to let you start testing your assumptions) out to your audience as quickly as possible. No theorizing or speculating, no “stealth mode,” no working for two years on creating the absolute perfect thing (that you then discover no one wants). You build a prototype and get people using it and offering feedback as quickly as you can and with as small an investment of resources as possible.
Next, you measure. You’ve identified a problem you think might be worth solving, and you have a hypothesis about what the right solution might be. Now you have to test whether your hypothesis is correct. You have to identify and track a few key measures that will prove – or disprove – your theory.
That testing leads to learning. Did you identify something that’s a real and important problem? Are you targeting your solution at the right audience? Does your solution work and make sense for them, at a price they’re willing to pay?
The only way to reliably answer those questions is to let people use your product and find out what they think and how they act. That information feeds back to your team so you can get closer to where you should be going in your next MVP iteration.
Q: Change can be scary. So what do you think is the best first step?
A: First of all, the whitepaper is just a primer on lean startup methodology and is designed to introduce the concept to association executives and hopefully pique their interest in learning more. If that’s you, I’d strongly encourage you to read some of the more extensive treatments of lean startup we share in the bibliography, to get some formal training (and we share sources in the conclusion) or to join a local lean startup MeetUp group for peer-to-peer learning.
Beyond that, start small, with something that lies completely in your own area of responsibility and is relatively low profile. Once you have a few examples of how the methodology works, it’s time to start sharing your story.
Q: Let’s say associations are ready to start with lean. How do they achieve buy in from the board of directors? members? staff?
A: It’s all about being able to demonstrate that the methodology works, which is different from building the perfect product right out of the gate.
To quote two of the other key thinkers in lean startup, Nathan Furr and Jeff Dyer: “It’s liberating to recognize that no human being can guess correctly when you face uncertainty, and that part of the process is making changes to adjust to these inevitable errors.”
That’s what’s so powerful about lean startup: You are not going to get it right all the time. This methodology is built on that fact and structured to help you move as quickly and efficiently as possible from “here’s an interesting idea” to “here’s a program, product or service that we know – because we’ve been testing it all along the way – our audiences want, need, will use and will pay for.”
Q: And finally, what are two or three takeaways from your research that you’d like to share?
A: I’d strongly encourage people to download the whitepaper – it’s free – and read the stories of four associations we interviewed, all of which are using lean startup. It’s eye opening to see how this methodology works in real situations, where your peers are using it to help their organizations provide better service for their members and other audiences and invest their resources more efficiently and effectively.
Second, one of the concerns we’ve heard over and over from associations is: “What about our brand?” Again, quoting Guillermo: “In associations, we tend to worry that releasing a half-baked program will negatively impact the brand. I would argue that doing the same thing year after year without changing also negatively impacts your brand.”
Also, you have to realize that lean startup may not be suitable for every single initiative of your association or for every single audience – it’s hard to create a Minimum Viable Certification. Some of your members will not be O.K. with beta-testing a new product for you. But some will love that and leap at the opportunity to co-create a new service with the association. It’s up to you to find those people, who are your champions and allies in this.