mm1 survey shows: German companies are methodically fit for digital product development, especially since 60 or 70 percent of them already use Agile Development and Design Thinking. However, the methods are frequently used incorrectly. mm1 provides graphics related to the methods free of charge for download.
The digital transformation requires new approaches for the conception and development of (product) services in all sectors. The consultancy mm1 believes that Agile Development, Design Thinking and Lean Startup represent a contemporary methodology that should be used in combination for development tasks.
Therefore, mm1 wanted to know how far these development methods are known and used in German companies. The result: Agile Development and Design Thinking are now well-established innovation methods and are already used by 60 or 70 percent of German companies – a trend which is increasing. Lean Startup is still relatively unknown. “Our survey shows that the surveyed companies have recognized the signs of the times. Today, digitally connected services must be brought to the market quickly and effectively. This is only possible with state-of-the-art methods,” explains Laurenz Kirchner, partner at mm1. About 110 product and innovation managers from mostly large German companies with more than 1000 employees took part in the survey conducted in November 2016.
Digitization is forcing companies in all sectors to maintain their competitiveness with new services. But this also poses several problems: Due to fast technology development, customer requirements are changing rapidly and have to be constantly reassessed. At the same time, development projects have to be able to react to such changes more flexibly and with shorter lead times. And even when a customer problem is satisfactorily resolved with a new product using new technologies, a functioning service and business model for this solution still needs to be found in most cases.
Classical development approaches, such as Stage Gating, are increasingly reaching their limits. They are designed for capital-intensive manufacturing or service processes, such as in the automotive industry or in the power supply sector. Above all, it is about eliminating as many risks as possible and avoiding mistakes before making large investments – for example, in a sophisticated production tool or in expensive infrastructure components. In digital product development, the initial investments are lower, which is a benefit for the new methods. They are relying on learning from mistakes made in the initial phases of development projects. These errors are inexpensive and they considerably minimize the risk of taking the wrong product to market.
For Kirchner, who is both a trained architect and businessperson, the mix of methods in the development work is a given. It therefore comes as no surprise to him that development approaches such as Scrum, Design Thinking and Lean Startup, which have their roots in completely different sectors, such as IT, the creative industry or the start-up world, are now entering companies as modern methodology. “It is especially good for German companies that the above methods are accompanied by a new fault tolerance and therefore also a certain disciplined creativity. These are the fundamental similarities of Scrum, Design Thinking and Lean Startup: They focus on creating concrete working results in short cycles and checking them for suitability – ‘Build (to think), Measure, Learn’ is the overarching motto.”
At the same time, none of the models by themselves are a cure-all. “In some companies, we are observing a trend of incorrectly employing the iterative development methods. Design Thinking is a particular trend at the moment and it goes down well with the respective management team when a development project carries this label. If, however, the first user observation and idea generation do not follow rigorous prototyping and testing, the effect fizzles very quickly. Unfortunately, I have seen this all too often in many years working on Design Thinking,” explains Kirchner.
The consultancy mm1 has created graphics for all three methods, illustrating the process steps and tools. The posters are available to download for free at: