You know the kind of business who does things the same way for 30 years? A minimum viable product is a great way to rattle their cage!

For this article’s sake, I will call this firm “Acme.” There are many companies like Acme, and we all have an Acme in our lives.

Acme is a company in which things are done the way that they were always done, “because it’s been going okay for 30 years.” Employees only do the work they have to do according to the strict interpretation of their contracts, and only their managers communicate with other departments. Yes, there is some innovation at Acme, but it is all relegated to the siloed R&D department.

The biggest problem for Acme is that innovation poses too much of a threat to the current business. One factor is the fear of a retaliatory response from their channel partners if they would decide to manage their business in a different way.

McKinsey’s 3 Horizons

Businesses such as Acme make me very excited because I would like to disrupt it and take it to the 21st century. A great way to rock the boat in these kinds of organizations is McKinsey’s 3 Horizons model.

As I described before, Horizon 1 (H1) describes the current way of doing things in an organization. These include the products or services the company is known for and which result in the biggest profits and cash flow. Acme is doing excellent on this level, but the problem is the other 2 horizons: Horizon 2 (H2) that is all about emerging opportunities, and Horizon 3 (H3) which is the perspective on disruption and revolutionary change.

In our rapidly changing world, all 3 of these horizons are mandatory; organizations that are successful innovators have the highest survival ratings.

Acme Should Build an MVP

For Acme, innovations, especially H2 and H3 innovations, pose too much of a threat to the current business. I would recommend them to test the waters in a way that would not upset the organization too much. The solution would be to develop an early minimum viable product (MVP).

As you undoubtedly know, an MVP is a product with just enough features to satisfy early customers while also providing feedback for future product development. Building an MVP is a great way to test your product in the market. Gathering insights from an MVP is often less expensive than developing a product with more features.

Building an MVP is a useful practice for companies who are seeking to overhaul their route to market or value chain but fear retaliatory responses from their channel partners. It is also a great way of circumventing the “valley of tears” potentially caused by a drop in revenues or profits while reinventing the business model.

Google Builds MVPs Too

An MVP allows the business to gauge interest and traction for a specific innovation before committing to it fully. Let’s describe an example. When RevelX partner Noud van Alem was a Google executive, he was involved with the development of AdWords Express.

This is basically a simplified version of AdWords which generates relevant ad copy for the customer. From the beginning, this process seemed to be automated, but when this product was being developed, the backend consisted of a group of students who were very quickly typing ad copy.

When this experiment proved successful, AdWords Express was further developed, and the process is now fully automated.

Happy MVP’ing!

Are you ready to innovate without overhauling your entire business? Our MVP Toolkit can help prepare you for this task. It provides you with a framework, a list of must-reads, and some workshop canvases so you can start practicing right away. You can download the MVP Toolkit here.