Throughout our blog posts about innovation, ecosystems and platforms, we’ve maintained one core theme: incremental, discrete product innovation will not create significant new revenues or disrupt markets.
The reasons, as we’ve discussed, include the growing expectation of seamless experiences from the consumers’ viewpoint and the rising importance of platforms and ecosystems in which new products or services exist.
Minimum Viable Footprint
Today I’d like to highlight a new idea – innovating for the “Minimum Viable Footprint”, an idea that was first proposed in Ron Adner’s book entitled The Wide Lens. Adner defines the “Minimum Viable Footprint” or MVF as “the smallest configuration of elements that can be brought together and still create unique commercial value“. The MVF is the logical outcome of two realities: first, the already discussed idea that innovators need to innovate more than just a product, but must consider the ecosystem in which the product will reside, and second, the concept of a minimum viable product – something many companies already understand and practice.
If we can accept that innovation in the future must be more than a discrete product, then the “MVP” concept is becoming rapidly dated as it deals specifically with a product (concept) alone. It does not tackle the wider systems we believe are emerging. Adner’s MVF is the logical next step – understanding and producing just enough of a mixture of product, business model, channels and experiences and blending the MVP with enough “footprint”, the necessary services, channels, data, ancillary devices and so on that exist in the ecosystem.
In fact, the more you want your new innovation to “disrupt” the market, the more you need to turn your attention to more than just a discrete product. Customers today have enough disconnected, discrete, disparate products. They no longer want to work to make these products, services and business models fit together. Instead, they expect more integrated, seamless solutions and experiences.
MVF and Seamless Experience
To understand how to achieve a seamless experience, you first must understand customer needs and expectations. That’s not new news. Where things go wrong in these investigations today is that innovation teams define customer product needs and features, and neglect to understand the entirety of the expected solution. We’ve linked previously to Geoffrey Moore’s Whole Product concept and have suggested that we rename it the “Whole Solution”, to fully embrace the definition of what customers actually want. To deliver that “whole solution”, you will need to leverage products, services, channels, information, apps and other capabilities to round out your offering and create the seamless whole. The faster you understand that your product won’t thrive in isolation, and that it must be fleshed out and augmented by other products and services, the better your innovation can be.
This realization, that you don’t innovate alone, should spark a couple of new insights. First, you should be asking yourself: what capabilities do we have internally? What is the inventory of products, services, channels, information and so on that we have within our company that can extend the innovative offering. Most companies don’t understand or take advantage of their breadth and depth of capabilities, at a time when combining products, services, channels and information becomes so much more important. Second, once you understand your capabilities and have mapped them to the “whole solution” needs, can you bring them to bear in the solution? And then, equally importantly, what are the capability gaps you have between what you can offer and what the customer expects from a “whole solution”? These gaps must be filled by third parties, who provide apps, data, channels, services or ancillary support products. Identifying them, and working in concert with them, is vital.
Minimum Viable Experiences and Transformation
Of course these ideas build on each other. The MVP was adequate for products, but increasingly customers want and demand more. Adner suggested the MVF, establishing a product with just enough “footprint” of ancillary products and services to validate with customers. In this regard, the MVF suggested by Adner should create what we believe is ultimately the most important “minimum viable” outcome, the idea of a Minimum Viable Experience (MVE). Customers want seamless solutions and validating experiences. If we as innovators and producers aren’t considering how to deliver a MVE, then we will be left with yet another unsatisfactory product.
This idea relies to a great extent on the innovator’s own ability to innovate, to transform its channels and services and business models. Innovation doesn’t just change the market or customer, increasing it must also change the innovator, leading to another “minimum viable” outcome: Minimum Viable Transformation (MVT), in which the innovator is the one being transformed. While we’d like to claim we invented this idea, Deloitte has done some good thinking on how and why Minimum Viable Transformation is important and necessary.
Increasingly it will become clear to you that innovation is not something you do to create products for customers, but innovation is something that happens sometimes simultaneously in products, channels, experiences and even business models. Minimum viable product is just the first step toward minimum viable footprint (to address customer expectations) and minimum viable transformation (to transform the business to serve the customers’ needs and business model expectations). To see this in action, look no further than GE’s transformation from a financial services behemoth to an Internet of Things company, or Ford’s rapid transformation from a car company to a transportation company.
What would a minimum viable experience (MVE) look like for a Ford customer in the future? One stop shopping for transportation needs, where Ford and its partners seamlessly provide a customer with transportation (perhaps costed out by the trip or the mile, depending on customer needs), insurance, lifetime maintenance and warranties, perhaps even a choice of vehicles depending on needs (van for the school day, SUV for the weekend, convertible for date night, etc) all fulfilled through a seamless ecosystem. Ford is already introducing FordPass, which could become the platform on which many of these services rest. If this seems far-fetched, consider what Lynk & Company are doing – creating a fully web-enabled car that is shareable.
In this post we’ve introduced a number of new ideas, most importantly building from the accepted concept of an Minimum Viable Product to Minimum Viable Footprint to Minimum Viable Experience. This represents a spectrum of solutions an innovator delivers. Also important is Minimum Viable Transformation (MVT), the transition that the innovator themselves must undertake in order to fully deliver the MVE. In the next series of posts we’ll go a bit deeper into some of these ideas.