In today’s fast pace, hyper-competitive world of product development, a lean mindset is a new skill product managers and product teams need to develop. But what exactly is a lean mindset?
At its simplest, Lean is a way to analyze our process and actions in pursuit of delivering value to the market faster.
For product management, the goal is to achieve product-market fit in less time with fewer resources.
It is a target upon which we will forever work to improve.
One Lean value and the focus of this post is to “optimize the whole.”
The boundaries you define are, therefore, critical. In development, if you work with a Scrum team, for example, the boundaries are generally set around the acceptance of a user story into the Sprint and when that story passes acceptance testing and is ready for deployment.
These boundaries are reasonable because this is the span of the process over which development has control. Nevertheless, by narrowing the scope, Scrum only optimizes one part of the whole.
In product management, we expand the boundaries from the point that we decide an idea or opportunity is worth researching to when the customer derives value from the solution. We, thus, focus on the “flow” of value to the customer. By measuring the cycle time, we can track how long it takes an idea to get to market
The second measurement we track is value-added time versus the total cycle time.
Expressed more simply, how much time was the project waiting to be worked on as it passed through all the stages to go from an idea to release and usage by our customers.
Dividing value-added time by the total cycle time, we can calculate our “flow efficiency” (aka process cycle efficiency).
To quickly summarize the key terms discussed thus far:
- Cycle time: the time it takes for an item to move from the start to finish of a process
- Value-added time: the total time an item is actively being worked on (i.e. it excludes wait time between stages)
- Flow efficiency: (Value added time) / (Cycle time)
The above may sound abstract and hard to act on, so let’s tie it back to product management.
One high-level metric every team should track is the time it takes to go from Idea to MVP (i.e. minimum viable product).
Getting to MVP or minimum viable product is the critical first step in delivering value. The MVP is the first test that the solution addresses the needs of a segment of users (even if they represent a sliver of the target market we eventually wish to address).
Everything up to that point is just an educated guess. The learning we derive from putting an MVP release into the hands of some early customers will accelerate our path to product-market fit.
We can then work to improve our flow efficiency to MVP, and thus time to market, in two ways.
We can i) minimize wait times (i.e., non-value added time) and ii) improve the productivity of our value-added steps.
How to approach improving flow efficiency will be the topic of the next post in this series.
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