[…] As the pace of uncertainty continues to increase, managers will need to learn a new set of management tools. They need entrepreneurial management—the principles used in effective start-ups—rather than traditional management (see graphic: When to Use Entrepreneurial vs. Traditional Management).
We are not saying that what we learn in business school is worthless. Rather, we are saying that while traditional management works well for problems of relatively certainty, they work poorly for problems characterized by high uncertainty. Our research shows that great innovators understand when to apply an “Innovation School” approach that encompasses the Innovator’s Method to create value rather than a “Business School” approach which excels at capturing value. (see: The Innovator’s Method: Bringing the Lean Start-up into your Organization from Harvard Business Review Press).
In brief, the innovator’s method consists of four steps to solve high-uncertainty problems and turn insight into a successful innovation.
Step 1: Insight: Savor Surprises. Leverage questioning, observing, networking, and experimenting—to search broadly for insights about problems worth solving.
Step 2: Problem: Discover the Job to be Done. Rather than starting with solutions, start by deeply exploring the customers’ need or problem—the functional, social, and emotional job to be done—to be sure you’re going after a problem worth solving.
Step 3: Solution: Prototype the Minimum Awesome Product. Instead of developing full scale products, leverage multiple virtual prototypes to explore many solution dimensions, then iterate on each solution to develop a minimum viable prototype and eventually a minimum awesome product—one that truly delights on a particular dimension.
Step 4: Business Model: Validate the Go-to-Market Strategy. Once you’ve nailed the solution, you’re ready to validate the other components of the business model, including the pricing strategy, the customer acquisition strategy, and the cost structure strategy.
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