Avoiding Common Mistakes When Implementing MVPs in Large Enterprises

In today’s rapidly evolving society, how can we create products that effectively address users' challenges and needs? The Minimum Viable Product (MVP) is often highlighted as a powerful solution to this question. The concept of MVP has gained widespread popularity among startups, driving innovation through early identification and iterative learning. According to a McKinsey report, "On average, large IT projects are 45% over budget and 7% behind schedule. Moreover, they are delivering 56% less value than expected" (author's translation). In this article, we will review the concept of MVP and its operation, which is indispensable for product creation, and then introduce points to keep in mind when utilizing it in major companies.

What is an MVP?

If you’ve been involved in product development, you’ve likely encountered the term 'MVP.' The concept was detailed in 'Lean Startup,' a book that has become a modern classic and is still widely applied today. The essence of MVP is not to aim for a perfect product or service initially, but to deliver a minimal version that effectively addresses the customer’s problems. This approach allows us to work within a limited budget by restricting development to the minimum necessary for hypothesis testing. It also helps to clarify focus areas and narrow down verification points when launching a new business or startup. However, if the concept of MVP is misinterpreted, it can become an excuse for avoiding responsibility or for self-protection. It’s crucial to revisit the definition of MVP, ensuring a clear understanding of 'Viable' with the primary goal of determining how far the MVP can go to test hypotheses and deliver value to the user.

Points to keep in mind when introducing an MVP

Traditionally, when launching a business, it has taken a long time to identify risks from various perspectives, and to think through measures to deal with the risks before putting them into a business plan. Therefore, a major shift in thinking is required to introduce MVP. We will introduce the five key points of this shift.

1. Stick to the team from the planning stage

In large companies, the organization is often so vast that the most suitable personnel are typically assigned only after the company has determined its objectives on a company-wide scale. However, assigning people after decisions are made often leads to 'make-do' work, which can stifle the enthusiasm crucial for fostering innovation. Once the theme has been determined, the relevant issues can be identified and incorporated into the MVP. The learning gained from independently thinking through the issues and developing an MVP is far more valuable than merely testing a pre-determined hypothesis. After defining the theme to be addressed, an MVP should be developed irrespective of internal resource constraints, with careful consideration given to assigning the most suitable personnel for hypothesis testing.

2. Focus on learning through the MVP

As the organization grows, new businesses become smaller in scale compared to core businesses, and unless they are a huge success, they do not receive much attention within the company. Not only that, but since new businesses are likely to fail, compared to core businesses that never fail, they can easily lead to negative evaluations, and there is an incentive to build up requirements in a risk-averse manner. In contrast, startups and new businesses must drive innovation with limited resources. The speed and depth of learning through MVPs will determine the success of the product.

3. The answer is not in the office

The core of MVP is not about perfecting the plan, but about testing the underlying hypothesis. While discussions with team members in the office are important, it is essential to face the intended users in order to proceed with hypothesis testing. Remote work has become the norm due to the COVID-19 pandemic, making online meetings with external parties commonplace. This has made it easier to interview and discuss with prospective users without having to travel. If this opportunity for rapid MVP validation can be realized, it has the potential to become a source of competitive advantage.

4. minimize product

In a siloed organization, attempting to advance a highly novel project often results in receiving varied feedback and requests from different departments. If each of these is addressed individually, the novelty may be lost, and it can become unclear who the product is for and what purpose it serves. The MVP shouldn’t aim to perfectly address feedback from various departments; instead, it should focus on testing hypotheses in a minimal state that addresses the customer’s core problems.

5. Be open to rapid changes

The purpose of MVP is hypothesis testing, and depending on the results of the test, the current plan may be drastically changed.If the plan cannot be changed, there’s no value in testing it. In other words, it is not necessary to identify risks in order to pass a plan, and a plan that has been thoroughly worked out in advance is not necessary.

Summary

MVP is a concept that maximizes learning through repeated hypothesis testing with limited resources. Unfortunately, as organizations grow larger and become more siloed, the term MVP is often used as an excuse for backhanded behavior due to internal politics and other issues. To prevent this, it’s essential to return to the core principles of MVP, focusing on hypothesis testing with the five points above to foster genuine innovation.

References

• A Proven Methodology to Maximize Return on Risk
• 4 Tips for Launching Minimum Viable Products Inside Big Companies
• Delivering large-scale IT projects on time, on budget, and on value
• Using an Enterprise Minimum Viable Product Approach
• リーン・スタートアップ×経営【第3回】大企業における新規事業を成功へ導く処方箋
• A Review Of The Minimum Viable Product Approach