Lean Startup guru Eric Ries recommends that start-ups refine their business models through small adjustments or pivots. Pivots are an important part of creating what Eric calls the Lean Start-up where you create a basic product/service with just enough features to be tested by customers. Eric encourages the founders to get out of the office and talk to customers to validate their ideas. As a result the company determines whether the business is viable or whether it needs to make a pivot by adjusting some component of the business model. Adding to the definition using the basketball metaphor is that one foot stays firmly rooted, your core beliefs while you pivot developing your product for market.
I believe that the Pivot is very closely related to the Check stage of PDCA. Mark Graban asked Eric Ries that question for me in his Lean Blog podcast recently and Eric has a slightly different take on it. However, I think Eric describes the check phase very well with the analogy of a pivot.
Doing my own pivot and validating my thoughts I asked my Friday video partner and the Gemba Coach at the Lean Enterprise, Dr. Michael Balle what makes the Power of Check so strong in PDCA.
The Pivot or Check is an integral part in making the Lean Start-up work or any continuous improvement (PDCA) cycle to work. The power of customer validation is the strength of both methodologies. Does every PDCA cycle incorporate customer validation? In true Lean Sales and Marketing practices it does. How about yours?
Dr. Michael Ballé is a business researcher and consultant and has studied lean transformation for the past 15 years. He coaches CEOs and senior executives in using lean to radically improve their businesses’ performances and establish lean cultures. Dr. Balle is also a Shingo Prize winner as an author of the The Gold Mine
Related Information:
Steve Blank on the Lean Startup at Ann Arbor
The Strategy of the Fighter Pilot Revisited
Dealing with uncertainty in the Lean Startup
PDCA for Lean Marketing, Knowledge Creation
My take on what Eric says is that a “pivot” is not a small change, but a rather significant change in the direction of the company, such as the fundamental business model or target market.
Is that just not a Macro Check in a Macro PDCA? ;)