Innovation Success. Every Time.
Updated: Sep 8, 2022
Face Your Top Risk Now.
Beating the odds is a lot easier with a balance pole -- the tool to mitigate this killer-risk.
Succeed Where Most Fail:
Don’t Make Big Bets that Fail Big
Innovation projects are often a flurry of chaotic activity. They fail more than 90% of the time.
Massive amounts of effort are wasted on work that doesn’t really affect the outcome. For high-stakes, high uncertainty projects, this poor investment is usually fatal.
Most of the people on innovation teams are talented and competent, but they can’t see that they are failing. There are some road signs on the way to failure that you can identify if you know what to look for.
• Building the wrong things: Your instincts tell you that you are overbuilding some things, underbuilding others and missing some altogether. But you can’t see which is which.
• Failing fast is still failing: Teams are delivering seemingly viable features ever faster, but the results are not offering enough feedback to tell you anything.
• Big decisions are based in power, politics, charisma, and ego: High-stakes decisions are made by persuasion, influence, ego, instead of systematic data and validation.
• The team is talented, the tools are powerful but the customers aren’t coming: Talented teams are using cutting-edge tools, but are not delivering coherent, compelling products in a reasonable time.
• Fractured collection of polished pieces: Each expert does their job, but they are not part of a coherent solution. Craftsmanship is myopic and is not a good pattern for innovation.
All of these things are clear signs that your project is in trouble. But why is it failing? What needs to change? Is the value proposition flawed? Are there usability problems?
Where is the problem?
Reliably Land High-Stakes Projects -- Fast
A path to consistent, successful high-stakes innovation is possible, and a small, specialized group of people are achieving results right now. Theirs is a proven strategy for managing high-stakes projects with lots of uncertainty – repeatedly, and with minimum use of resources.
You too can win - maximizing your impact on high-stakes, innovative projects. A seemingly small but consequential change in perspective dramatically changes the way you use Lean to manage innovation projects. Effectiveness, not efficiency, satisfice, not maximize, risk-type, not functions.
Win by Doing the Right Activity at the Right Time with the Right Tools -- Now
Innovation projects are complex. There are so many things you could do. You are not just developing a product. You are building a complete project or even a new company. You could work on team building or fundraising or design or features or pricing or marketing or sales, or any number of other important tasks. Each task has a different impact on the other tasks and the overall goals of project success. And each task often requires different methods and skills to accomplish, further shaping the decision process.
The most important question is: what should you focus on right now to get the most impact and increase your overall chances of success?
Lean is a broken solution for managing innovation.
If your project is struggling with the symptoms of failure, then Lean will not save you. Unfortunately, Lean can be a dangerous delusion, because it only shines a light on the existence of problems. In high levels of uncertainty, as it is typically used, do not offer the precise insights required for innovation. Lean has not delivered on the promise of massively improving the success rates for innovation. The outcome rate is still abysmal.
Uncertainty changes how successful managers govern projects and use Lean. Lean practitioners are ignorant of the concept of managing by risk types. Hence, they cannot discern or act on noisy, muddled market feedback.
Lean is an effective encoding of the scientific method for projects with many unknowns. It is an excellent approach for ‘how’ teams structure their projects as a learning model.
But with high levels of uncertainty, ‘how’ is not enough to provide a complete coherent vision or the operational vision to realize it.
Because, when there is lots of uncertainty Lean does not help address the critical project governance questions that teams struggle with:
What should I not focus on now?
What should I focus on – now?
What is the best methodology to match with the current priority?
When do I stop on the current issue, and change to something else?
Lean poses the right key questions of who/what/why/when, but it doesn’t offer equally rigorous guidance for how to answer them. Lean is a good tool for figuring out that something is not working but does not tell you how to fix the problem.
Give Lean a mission
Managers need a new strategic paradigm for high stakes, high-uncertainty projects: risks-types. A fuzzy understanding of risks - and different risk types, is the top reason high-stakes projects fail. Without a risk-type model, high-stakes projects cannot direct resources to the highest risk, highest ROI activities. Put your money where it matters….
Top Risk Now:
Win Tailoring Your Focus to the Highest-Impact
With innovation projects, when uncertainty is high, you maximize ROI by governing your projects with the currency of risk. You will mitigate your biggest risk by focusing on your investments where they will have the most impact. The biggest risk is always the biggest opportunity -- focusing effort on effectively reducing that top risk-type - will consistently maximize ROI.
A better way to manage your innovation projects: Top Risk Now
Top Risk Now (TRN) is the missing manual for using Lean in projects with high uncertainty. Using the TRN method, you will face and reduce your biggest, most threatening risks. And with TRN you can effectively maximize the impact of every investment by satisficing, not optimizing. I.e., good enough is good enough, even if it’s messy and inefficient.
Three Rules for risk-driven innovation
TRN is composed of three simple rules. Using insights into the risk profile of a project, this process will effectively sequence and budget the work for the highest impact at each phase of a project with high uncertainty.
Know your Top Risk:
Understand the risk types for the project. Then identify the biggest risk to the project, now.
Stop working on all tasks that are not directly mitigating that risk type.
Mitigate the Top Risk with the Best Tool: Create sprints for projects that mitigate your top risk type. Select a best-of-breed tool to reduce the risk the most for the least investment. Shift all work to focus on mitigating the top risk.
Satisfice current activity and switch when it is no longer the highest priority: Redefine the meaning of Lean sprint success. Use a new decision rule to determine when you shift focus. Not refining. Not Maximizing. Not sub-optimizing. Only work on mitigating the top risk-type until it is no longer the top risk-type. When your efforts are effective at reducing the top risk-type, enough -- stop working on the current task and return rule #1. Repeat the cycle.
You may spend multiple sprints on the same risk type, switching methodologies as the risk level lowers -- but the key is to change focus as soon as the top risk changes. Even if the current state is messy. You have “bigger fish to fry” now. When a project has a high level of uncertainty, more effort on what is now a secondary issue may never pay off.
This simple, straightforward approach focuses the learning model to mitigating your biggest risks right now with the minimum amount of resources. Tasks that do not mitigate your biggest risks should be delayed or deleted. Teams learn to satisfice each investment, and quickly move on to the next ‘big’ issue. Optimization and refinement are simply not part of the equation on innovation projects.
By working to mitigate only your top risk, and by using the best tool for the job, you are maximizing your ROI. Every hour and dollar will have the maximum impact. And since it is a small, focused bet, if your hypothesis is invalidated, then you have a clear signal – without noise. You know what is wrong and have a clear signal so you can quickly pivot or cut your losses.
Illustrating Top Risk Now
Imagine the risk types on your project as nails protruding from the deck. There are many nails all across your deck, just as there are many risk types -- potentially hundreds. But some of them are sticking up much higher than others...
Using this new approach, you look for the tallest nail. This is your biggest risk.
Plan a sprint, but give each sprint a new type of goal. You might think that you would drive that nail into the board, but with the TRN approach, you drive it down just enough that it is no longer the tallest nail.
Satisfice/effective: No nail is ever driven into the board. When uncertainty levels are high, continuing to focus on a risk that is no longer the top risk is a waste of resources. You can get bigger rewards shifting to another risk-type. Stop working harder. Stop refining. Instead, shift to where you can have a bigger impact with least effort and resources.
Switch: When the current task is no longer focused on mitigating the risk-type that was a top -- you turn your attention to the ‘new’ tallest nail. And you shift to select the best-of-breed tool to mitigate this new, different risk-type. It may no longer be a nail. It may be a bolt. You may shift from customer development to design, or from design to messaging.
TRN concentrates on systematically reducing the greatest risk type of the moment -- and that is how innovation projects succeed.
Battle-tested by market leaders. A healthy relationship with risk
Top Risk Now is not an invention, or an unverified inspiration from some lucky exec. Like many great insights, it was uncovered in hardcore research, but almost as a byproduct. There is a small unique psychographic niche of perennial market leaders that succeed at innovation projects almost every time, Gateway Adopters (GA’s) [learn more here]. They happen to share a unique set of common traits, irrespective of market. TRN codifies this discovery.
Beyond 100’s of interviews, Patrick investigated over 400,000 data points from over 3,800 high-stakes, projects and discovered how these market-leaders managed their high-uncertain projects - dramatically differently than everyone else. They don’t just take risks that most people wouldn’t even consider. They diligently pursue them.
Gateway Adopters develop a unique relationship with risk and uncertainty by using Lean in a very uncommon way. They give Lean a new mission.
With this new mission Gateway Adopters occasionally stumble, but they never fail. They take relatively small, but high-impact steps, not on the overall project, but laser-focus on a small slice – mitigating the current top risk-type. But only enough, as they wrap Lean in a very different set of decision rules. They do not maximize or sub-optimize. They satisfice. Then shift focus to the top risk-type.
With these small increments, they always have the schedule, budget, and direction to adapt to new learnings inevitable in high-uncertainty projects. The result is always a successful project, even when they pivot.
TRN vs. “whack-a-mole”
TRN is a subtle, but dramatic contrast to reacting to market movements, chasing the latest trends or pain, and ‘whack-a-mole’ management, where every new challenge shifts the effort of the team, often in contrast to potential impact.
The reactive carnival game is a poor model. What kills most teams is using great tools to focus on refining work on the wrong thing – activities that are not mitigating the greatest risk-type to the project, now. In the real world, all of the moles in the game would be up all the time, just at different levels. All-but-one risk type is a toxic distraction from the one risk-type you should be focused on, now.
Use Best-of-breed tools
The single most unique trait marking a Gateway Adopter is their constant curation of a portfolio of powerful best-of-breed risk mitigation tools. These leaders have toolkits that span many risk types. Regardless of their domain, from executives to coders to authors to artists, they develop and constantly refine their portfolio of Best-of-Breed (BoB) methodology. And since the mission is to mitigate risk, not eliminate it, the tools are sophisticated and refined to match different risk-levels and mitigation goals.
If they are starting a journey from an island in Puget Sound to the top of Mount Rainier, they don't start the journey with crampons. They get a boat. Once ashore, they use hiking boots. The next time they cross water, they may use a paddleboard. The “good enough” tools for the job. Until it’s done.
With this combination of tools and discipline, Gateway Adopers learn high-value lessons for small investments to maximize the impact of their learning.
A new manual for Lean
New rules transform Lean into better guide high-uncertainty projects. For innovation projects, Gateway Adopters wrap Lean in a combination of two disparate, but highly effective management principles. The concepts of Risk Management and Theory of Constraints combine to give Lean a very different mission from the one that was popularized.
With these insights into innovation governance and an ever-evolving portfolio of powerful, BoB tools, Gateway Adopters can pursue and successfully manage risks that most would not even consider. They use these models to create new levels of precision required for high uncertainty projects, to learn the most, right now.
Your 6 Risks for High-stakes, High-Uncertainty Innovation Projects
Gateway Adopters always have a clear understanding of all of the possible risk-types in their domain. If you are driving breakthrough innovation, what is your toolbox? What are the drawers labeled for your BoB tools?
Patrick’s research into reports spanning thousands of post-mortems assessing VC projects, angel investments, and enterprise innovations reveal a consistent pattern of lethal risk types. Classifying your current top challenges by risk type is the first big step to managing innovation effectively. This will make it easy to identify your current killer risk.
Each domain has risk types and mitigation tools. Designers will have a different toolkit than general managers.
Startups and V1 disruptors have particular challenges. High-stakes, high-risk innovation projects typically have six mutually exclusive, exhaustive risk types::
Value: Risk of providing customer value. Will someone pay for it?
Usability: Risk of building an unusable product. Can users realize the value promised?
Performance/Technology: Risk of unacceptable product function or performance. Does it work well enough? Is it compatible?
Go to Market (GTM): Risk of not getting the project to market. Will they buy it from you? Can you reach your customer? Do your selling-motion and business model match customers' buying model?
Financing: Risk of insufficient resources. Do you have the resources you need to land your offering and grow?
Team: Risk of your team has the right skills. Does this team have a healthy dynamic and the skills to build, market, sell and support the right product?
For each sprint select the right tool for the right job: A TRN Journey
For each risk type Gateway Adopters continually evolve their portfolio of mitigation tools. Each tool is suited to the task at hand. To survive the risks you too should evolve a toolkit of best-of-breed tools for yourself and your team so that you can mitigate current top risk, whatever it is. This allows you to use the right tool for a risk type in any situation.
Suppose you are going on a journey from an island to the top of the mountain on the mainland. You don't start by putting crampons on, because you will just get stuck to the dock or drown when you jump in the water.
First, you need a boat to get across the water.
Then you hit the Flatlands. You don’t need the boat, anymore. But you will need hiking shoes and a compass. Then a kayak to get through the rapids. Finally, you will need climbing gear once you reach the mountain. Stop using your ice axe to cross the marsh, and your oars to scale the cliff face. [PH1] Understand the biggest risk at each stage of the journey and use the right BoB tool enough to reduce it, until you face another biggest risk -- and change tools. And make sure you have the tools for each stage (risk) of the journey.
Satisfice to mitigate risk, not eliminate it. Never sub-optimize any one project.
After each sprint, reassess your risk profile. Sometimes you will attack the same risk again, likely with a different tool that matches the new risk level.
Eventually, your top risk will change, and a new risk type will emerge as the top risk. That change is critical.
When this occurs, stop work on the current task. Messy is OK. You have a greater opportunity elsewhere. You don’t need to build an elevator to climb a rock face -- when ropes and pitons will do.
Assess and select the best tools for the ‘new’ top risk type/level.
This model maximizing your impact – your effectiveness - of your overall effort.
Top Risk Now
Manage Any High-Stakes, Highly Uncertain Project
With top risk now you will triage your investments at a strategic level. Stop wasting Lean cycles on activities that don't matter -- more than anything else -- right now.
Emulate the best practices of perennial market-disrupting innovators. Triage your investments at a strategic level with Top Risk Now.
Using TRN, you will learn how to keep your project focused on maximum return on investment by continuously applying the three simple rules.
Top outcomes and key learnings from Top Risk Now:
Realizes the full promise of Lean. For highly innovative, high-uncertainty projects TRN is the manual to give the Lean project-management model a mission. Stop investing in refining, optimizing the many things you could perfect, but are NOT the top threat to the project. Focus your efforts on reducing the risk-type that is most lethal – most likely to cause the project to fail, now. Until it is not.
Maximize overall ROI, reducing your top risk-type.
Make small bets to mitigate the biggest risk, before making bigger bets.
At the right time use the right tool, just enough, to reduce the next top risk.
Business value is almost always the top risk type to focus on first. If you can’t establish market-problem and product-market fit, then investing in the other risk types is likely a waste of resources
Building a best-of-breed toolkit. The key to succeed as a serial innovator is to win where others fear to go. Develop a small portfolio of mitigation tools for each risk type at each risk level.
Manage a portfolio of projects with TRN, prioritizing projects that address the highest risk to the whole business, not just the current project.
Win more using Top Risk Now
You can be the disruptor and lead the mainstream market with a unique competitive advantage. Use TRN to focus your efforts and take on big challenges that your competitors would find daunting. You can win consistently in the market with a systematic approach to risk.
Be the disruption that your mainstream market chases. With this simple concept and three simple rules, you can emulate how the perennial Market Leaders in every market, Gateway Adopters successfully lead their markets.
Start using Top Risk Now -- Now
Patrick has used TRN with startups and large-scale enterprise projects to great success over the last decade. Now this approach is finally documented so that others can use these powerful tools.
Learn how to identify your top risk, mitigate it with the right tool, and switch to a new risk at the right time. Manage your business and your project by understanding and focusing on your top risk now.
TRN is part of the Market Fit Fast (MFF) system for delivering compelling offerings to market leaders -- fast. MFF complements the ‘how’ of Lean, offering the necessary rigor to the ‘who/what/why/when’ that Lean leaves on the table. Help your team build a vision and transform that vision into a successful winning product, fast.