Writing a well-crafted business case may be key to securing funding, but it has little impact on whether your initiative succeeds or fails. A clear product strategy and knowing which initiatives to start, stop, or continue will serve you better in the long run, especially if your goal is creating a high performance organization. Barry O'Reilly presents an alternative, evidence-based approach to making investments and managing and prioritizing your organization's projects and products. He'll show how using techniques such as customer discovery, hypothesis-driven development, and innovation accounting can minimize risk, inform your teams, and get the optimal return on your efforts. Webinar available at: http://www.oreilly.com/pub/e/3349

1. BLOW UP THE
BUSINESS CASE
@barryoreilly #LeanEnterprise 1

2. 2
PMO + Finance PMO
Iteration 0 | 1 | 2 | 3 | 4Fuzzy front end The last mile
Centralized QA
Study
+ approval
Design
+ planning
Integration
+ QA
Development
Testing
+ showcase
Analysis
Release &
operation
TRADITIONAL BUSINESS PARADIGM

3. 2015 PRODUCT MANAGEMENT INSIGHTS
3
44% include user
feedback throughout
the development
process
66% of products take
or more 6 months
to launch

4. It’s 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

5. STOP WRITING
START LEARNING
5
Sketch out ideas with the right people, at speed

6. BREAKING DOWN BARRIERS
6

7. CROSS FUNCTIONAL COLLABORATION
7

8. 8Alexander Osterwalder and Yves Pigneur, Business Model Generation

9. 9

10. 10
GO, LOOK, SEE
User research by the
people that are
designing solutions
Get out of the
building
Challenge beliefs
through experience

11. LEARNING
OVER EARNING
11
Build a runway of questions to ask, not requirements to build

12. 12
Minimize the
total time through
the loop
LEARN
DATA
MEASURE
BUILD
Eric Ries, The Lean Startup
IMPLEMENT AND AMPLIFY LEARNING LOOPS

13. 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. 14
LAUNCH AND LEARN

15. 15
in Value
Time
THE PRINCIPAL OF OPTIONALITY
Nassim Taleb, Antifragile

16. 16

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

20. 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

21. 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

22. INVESTING
BASED ON
EVIDENCE
22
Making better decisions based on learnings

23. 23
Doubt is not a pleasant condition,
but certainty is absurd.
- Voltaire

24. 24

25. 25

26. REDUCE UNCERTAINTY WITH EXPERIMENTS
26

27. 27

28. 27
14 people
£261,000
12 weeks

29. 28

30. It is not enough to do your best; you must
know what to do, and then do your best.
- W Edward Deming
29

31. PRODUCT / PROFIT CURVES
30

32. WHY INNOVATION LOOKS COSTLY
▫︎Traditional management & financial accounting
measures are not designed for innovation
▫︎More effective, for exploiting well understood domains or
established business models and products
▫︎When exploring, accounting must not be ignored or
irrelevant -- simply needs to be interpreted differently.
▫︎Established practices provide little insight on if customer
or user will love or engage with a new product
▫︎return on investment
▫︎financial ratio analysis
▫︎cash flow analysis
31

33. HOW TO CREATE A FRAMEWORK FOR DECISION MAKING
▫︎Innovation Accounting refers to the rigorous
process of defining, 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

34. HOW DO WE SHOW THE CFO WE ARE MAKING PROGRESS?
33
Stakeholder Measure Current Target Trend
CustomerCustomerCustomer
BusinessBusinessBusinessBusinessBusiness
% users that complete sales flow 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%

35. ONE METRIC THAT MATTERS
34
Stakeholder Measure Current Target Trend
CustomerCustomerCustomer
BusinessBusinessBusinessBusinessBusiness
% users that complete sales flow 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%

36. MEASURE USER AND CUSTOMER ENGAGEMENT
35

37. GROWTH METICS AND OUTCOMES
36
Element Purpose Relevant
Metrics
What we will
use?
Acquisition
Activation
Retention
Revenue
Referral
Generate attention of
product
Traffic, 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
coefficient, viral cycle
time

38. 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

39. CONCLUSION
Tell the story as a narrative with a runway to succeed
38

40. TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED
17
39

41. TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED
17
Aspirational Customer Journey
40

42. TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED
17
Aspirational Customer Journey
Product Hypotheses
41

43. TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED
17
Aspirational Customer Journey
Product Hypotheses
Design Experiments
42

44. TELL THE STORY AS A NARRATIVE WITH A RUNWAY TO SUCCEED
17
Aspirational Customer Journey
Product Hypotheses
Design Experiments
User Story Map
43

45. 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

46. @barryoreilly
www.barryoreilly.com
#leanenterprise
@jezhumble | @jemolesky
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45
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