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Faculty Research

The Next Step - Facing Uncertainty with Innovation

The prototype wasn’t pretty. Wrapped in tinfoil and dotted with hand-drawn circles, the cardboard cylinder could have easily passed for an elementary school project, but the student entrepreneurs didn’t mind.

Why should they spend money on a product they weren’t sure people wanted? With creation in hand, they took to the streets, asking Utah County residents: how much would you pay for a security system like this? If it were real, that is.

Imaginary security system aside, this type of low-tech analysis—which mitigates risks for entrepreneurs by providing valuable feedback early in the innovation process—is one of the core tenets of The Innovator’s Method: Bringing the Lean Start-Up into Your Organization, a bestseller coauthored by Marriott School professors Nathan Furr and Jeff Dyer.

“When you’ve got a lot of certainty and you know exactly what you want to build, then build it,” Dyer explains. “But if you’re facing any uncertainty, you need to test the assumptions behind your ideas before you ever start building.”

And when Dyer says “building,” he’s not just referencing foil-wrapped prototypes. Whether it’s developing a fresh approach for employee training or revamping the family’s chore chart, applying lean start-up principles can help you test the waters and diminish the risks associated with big ideas.

“Underneath the process is this question: how fast can you learn about something that you don’t know?” Furr says.

So banish the excuses about why you can’t, won’t, or haven’t implemented your great idea. It’s time to take the next step.

Pivot Points

No chicken-and-the-egg debate here: before a prototype is born, you’ve got to have an idea.

The BYU students behind the cardboard alarm system initially observed that when car alarms went off in Provo, no one took any notice. What if that were your car being stolen and you never knew? Their solution: an auto security system that could send an alert to your cell phone.

Then came the testing—the first step to making sure an idea will be successful.

While it seemed like a valid problem and solution, when the students actually asked potential users about it, there was more concern for apartment security than for auto security. After testing the initial hypothesis, the students changed their direction to fit their findings.

“It’s been a really interesting learning process as we present different ideas to different customers,” says AJ Hemner, a Marriott School student who is one of the founding members of Novi Security. “Without spending very much we were able to either validate or crush our hypotheses. Sometimes we were dead wrong.”

This is where building a cheap prototype comes in. After their first attempt, the students built four more prototypes, all slightly different, based on feedback they received from testing. Their final product design is a small device equipped with cameras and motion sensors that can be discreetly installed on the ceiling, where they record images to send to a mobile device—considerably different from their original idea but tailored to perfectly meet customers’ needs.

The ability to make changes is critical, according to Furr and Dyer. But like Novi Security, there’s no need to walk completely away from your original idea. Instead keep one foot in the same place and transfer your research and findings in a new direction.

“Some people are afraid to pivot,” Hemner says. “We saw that people are more interested in home security, and we just ran with it. And it turned out that there was a much bigger market there. Sometimes you have to try things to find out what you don’t know.”

Hemner and his teammates’ company caught the attention of national media and received more than $175,000 from a crowdsourcing campaign to build their product. They will begin shipping their first security systems this year. The key to their success: reiteration.

To The Test

The life spans of top companies are shrinking. In 1958 an S&P 500 company was expected to stay on that list for sixty-one years, but by 2012 that number was down to eighteen years, according to an Innosight study.

With globalization, new technology, and changing customer demands drying up business, it’s never been more important to innovate. But making changes at work can be difficult—especially if running experiments isn’t in your job description.

Boyd Goodson, a BYU economics grad and partner at Highcrest Management Group, was in a tough situation as he worked with leadership teams from portfolio companies. One team was trying to bring a new software program onto the market but realized that the product couldn’t compete because it was priced too high. The team members called Goodson and said they were going to take the loss and move on.

“It seemed like my only choice was to accept their decision or tell them they were wrong,” Goodson says. “But instead I suggested doing some experiments to figure out what the right price point was. Luckily we caught it early enough that we were able to refine the business model, and now the product is starting to get some traction.”

Goodson says the situation was tough because he’s not directly in charge of the software product, but he does have responsibility for its performance. He didn’t want to seem pushy or arrogant, so he offered the idea as a short-term experiment that would give them more data to work with.

“If framed in the right way, suggestions of change and iteration aren’t viewed as controversially as they might otherwise be,” Goodson says. “We had some quick wins in the experiment that got people excited about the process, and it caught on from there.”

Getting buy in on a request for experimentation, as Goodson’s experience illustrates, comes down to three steps, says Furr.

  1. Show your coworkers that you value their ideas, and they will be more comfortable when you suggest further testing.
  2. Find out what the assumptions behind the idea are and what you need to test to know if the idea will work.
  3. Propose a series of tests that will help validate the assumptions behind the idea. Use logic to show that more information will help your company avoid failure or embarrassment.

“It’s amazing what people are willing to share when they know their opinions are valued. Some of our best fixes came from people who weren’t even involved with the problems.”

Team Effort

Good innovation doesn’t stop with experimentation. It requires teamwork, and there’s nowhere better to learn about working together than from some of the world’s toughest athletes and their software developing counterparts.

In rugby, the scrum is a method of restarting play. Team members link up to fight for control of the ball, with a scrum master leading the pack.

Away from the pitch, academics Hirotaka Takeuchi and Ikujiro Nonaka developed scrum for software developers to meet the needs of consumers. The system challenges the traditional waterfall model—where software is developed, tested, and maintained sequentially—and replaces it with a flexible framework, allowing developers and testers to work on small pieces of software at the same time. The result, Takeuchi and Nonaka argue, is a system that is “especially good at bringing about innovation continuously, incrementally, and spirally.”

Since being coined in 1986, scrum has seen many iterations, but its main premise hinges on three roles: product owner, development team, and scrum master.

The product owner represents stakeholders and is the voice of the customer. This person processes and prioritizes requests, such as bug fixes, features, or upgrades, and adds them to a backlog of projects.

The development team is responsible for delivering a shippable product at the end of each sprint—the period of time given for the team to complete a goal. The sprint starts with a planning meeting, where the team identifies tasks that need to be completed from the project backlog. Assigning a numeric value for difficulty to each task, the team only takes on what can be completed during the sprint based on capacity data from previous cycles.

Overseeing the process is the scrum master. Under his or her direction, a daily stand-up meeting is held to check on progress. If any hurdles are identified, the scrum master works to remove them so the team can meet its commitments.

Two meetings wrap up the sprint. At a review, the development team presents a demo of the completed work to stakeholders. During a retrospective, team members discuss what they learned and how processes can be improved for the future.

To the uninitiated, scrum can seem focused on minutiae, but coupling a time-sensitive goal with daily communication is what leads to continuous innovation and prevents the inevitable delays caused by siloed efforts. “Everybody knows that if you’re not sure you’re going down the right path, running down that path as fast as you can is probably not a good idea,” says Kenneth Rubin, author of Essential Scrum: A Practical Guide to the Most Popular Agile Process. “Scrum creates a coherent framework that allows people to see the whole situation and organize work.”

Rubin often gives training to companies and organizations on creating teams that will innovate successfully. Some of his past clients include Yahoo, CNN, and five thousand Orthodox rabbis who needed help improving their outreach efforts.

Regardless of what your organization produces—whether it’s the news or converts—implementing scrum starts with assembling the right team. “You need people who can adapt to change quickly and will fit in with the culture you are trying to create,” says Cydni Tetro, tech entrepreneur and CEO of 3DPlusMe. “Making a wrong hiring decision on your initial team is a really hard problem to recover from quickly because you don’t know what the damage will be for a while.”

Tetro, who earned her MBA from the Marriott School in 1998, suggests using your network to find people who are proven problem solvers and have deep skills in the fields you need. Knowing people have the right experience will help you know they can be relied on for your project.

No matter what field you’re in, scrum can streamline efforts and ensure your team isn’t running in the wrong direction. Ask your HR manager if your organization already sponsors scrum training or if you could bring in a specialist to give your team an overview.

Personal Matters

The workplace and the entrepreneur’s garage aren’t the only places for launching novel ideas. This method of adapting and learning can also help develop solutions for everyday problems.

For example, Furr used the method when he was deciding his career path. As an undergraduate he studied English, but just a year before graduation he realized that a career in English wasn’t for him. While exploring other options, he almost ruled out business because he associated it with sales, an area he was sure he would not enjoy.

“I was this English major, and business was the dirty world of money,” Furr says. “But I got more familiar with the topic, and I learned that it could be an interesting career.”

He had no experience, but he was able to take small steps, including interviewing with companies, joining a management consulting student organization, and going to career fairs. He liked what he was learning and eventually was hired by a top consulting firm.

“I’m grateful that I didn’t draw a line in the sand and say, ‘I must stay in English because that’s all I know,’” Furr says.

Being flexible and taking ideas across disciplines is one way Amy Rees Anderson, who studied business at the Marriott School and is a founder at the Rollins Center for Entrepreneurship and Technology, keeps both her business ventures and her personal life from getting stuck in old routines.

As the CEO of MediConnect, Anderson operated an idea board on which she posted problems within the company. Any employee was welcome to contribute a proposed solution, no matter their position in relation to the situation.

“It’s amazing what people are willing to share when they know their opinions are valued,” she says. “Some of our best fixes came from people who weren’t even involved with the problems.”

Though her career has changed—Anderson

sold MediConnect in 2012 and launched an angel investment firm later that year—she continues to follow the same method. She keeps a blog where she asks readers to give advice for challenges she is currently facing, like becoming an empty nester or building a new home.

“As a parent you’re going through things for the first time, and it’s always nice to seek the input of people who have been there and done it before,” she says. “If you can learn from the mistakes of others and not make them yourself, that really puts you ahead of the game.”

Creative Streak

It’s hard to stay at the top for long. New technologies are being adopted faster than ever, and trends seem to change with every new viral video.

“By every measure uncertainty has increased dramatically in the past fifty years,” Furr says. “Sometimes people think of uncertainty as a bad thing. And sometimes it is. But I like to think of it as a good thing because it’s where new ideas come from.”

Even if you’re not working in a high-tech field or don’t see yourself as an innovator, you can find ways to nurture and develop ideas that will make a difference in your career and in the world.

“I know a lot of people who feel like they didn’t get the creative gene,” Dyer says. “I want people to feel empowered. It may not be earthshaking, but their innovation can make a difference in their world. There were times that I haven’t seen myself as creative or innovative, but I’ve been able to get better at it. And that’s exciting.”

As you begin to take the next step, remember that failure is not the worst outcome—but skipping out on your big idea may be.

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Article written by Angela Marler
Illustrations by Mark Miller