Understanding Lean Product Management and How It's Applied to Product Design

According to Harward Business Review “72% of all new products don’t meet their revenue targets”. Another study says that in 2021, the failure rate of startups was around 90%. The same research concludes that 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year. Seems like most product companies are doing something wrong… They invest significant time, money, and human resources in product development, but still over time it turns out that their offerings don’t interest the audience much.

One of the reasons for such alarming statistics is the fact that organizations don’t have a tool to determine the viability of their business model, can’t figure out if they implement functionality that customers will use, and are not sure whether the solution is well-designed or it requires some improvements.

One approach that has gained popularity in recent years and can help you learn if you’re implementing the right ideas is lean product management. We at Eleken UI/UX design agency had many chances to work with startups that apply the lean methodology to their work. And we can state that the lean production process with its customer centricity, the culture of transparency, the need for constant improvement, and iteration always favorably influences the successful outcome.

Therefore, in order to help more product managers adopt this approach in their teams, in this post, we’ll explain what lean product management is, how you can use it to improve your product management process, and how it can be used in product design.

What is lean product management?

Lean product management is a strategy that helps product managers focus on what’s important and eliminates waste of time, resources, as well as efforts during the whole product’s life cycle. It’s a way of thinking that allows you to move fast and stay agile, while still delivering valuable products to your customers.

The key to lean product management methodology is to build something only when you have a validated idea that will solve a problem for your customer. This means eliminating product features, tasks, and processes that don’t provide value. Instead, the goal is to focus on customers’ wants and needs.

The main principles of lean methodology are as follows:

1. Eliminate waste: Remove anything from the process that doesn't add value for the customer.
2. Maximize flow: Keep the process moving so that products are created as quickly and efficiently as possible.
3. Respect people: Respect your team and their time, knowledge, and abilities.
4. Pursue perfection: Continuously strive to improve the process and the product.

What is so special about lean product managers?

The common product development process isn’t built to regularly put customer needs over the company’s internal requirements. A lot of businesses don’t have a clearly defined process for prioritizing their product roadmaps. As the result, they base their decisions to create new features on the stakeholders’ opinions and personal assumptions that are not backed by any solid customer data.

Instead of putting users in the first place, typical product managers often care more about the needs of the marketing department, sales department, stakeholders, and other important people within the company. This way, while gathering requirements from internal teams it’s very likely that the real needs of customers would be ignored.

In contrast, lean managers always strive to maximize customer value first (which consequently facilitates maximizing stakeholders’ value). Say you're a product manager working on a new project. In order to adhere to the lean product management methodology, you would:

• start with identifying and understanding your customer's problems by talking to them and analyzing their feedback
• make sure that internal teams understand users' challenges, and together you would create a solution for this problem
• and finally, you would validate the solution with real customers.

This process can be applied to any stage of product development, from ideation to delivery. And while it may take a little bit of time to get used to, the benefits are well worth it. Lean management can help you achieve faster timelines, increased customer engagement, and improved product quality.

How can I apply lean management?

Lean product management is not a specific process or a set of steps. Rather, it's a way of thinking that you can apply to any process. There are certain concepts and tools that lie at the heart of lean methodology and applying which is essential for ensuring product success at each stage of its lifecycle.

Lean startup

Lean startup is aimed at delivering products to customers using a short amount of time and the least possible amount of resources. This way business founders can quickly evaluate the viability of their business model at the initial stages of the product lifecycle without much funding, or complex business strategies.

Those who adhere to the lean startup methodology always gather customer feedback while creating a new product, which often requires designing a minimum viable product (MVP).

The cornerstones of lean startup methodology are:

Customer development

Customer development methodology assumes that aspiring business owners have untested assumptions about who their customers are, what functionality they expect to see, what pricing model to use, how to grow business, and so on. And it’s impossible to check if their assumptions are correct internally, without leaving the company. Therefore, the customer development model encourages you to “get outside the building” and test your hypotheses on real customers.

The customer development framework consists of four steps:

Validated learning (Build-Measure-Learn)

Validated learning is an approach that helps you quickly determine if your chosen direction is working well. To quickly validate or dismiss some of your business assumptions there are the validated learning loops that consist of three stages: build, measure, learn. 

First of all, you build something really cheap and fast and give it to a selected number of people, then you measure their feedback (what they like and dislike about it), and finally, you learn what you can change about the product. You have to go over this cycle many times. 

Innovation accounting

Innovation accounting is a method to evaluate the success or failure of innovation projects before you’ll be able to use common financial metrics like ROI or revenue. 

The reason startups should implement innovation accounting is that when your product is at the stage when you test and validate ideas, financial indicators are not enough to understand if you succeed, as they don’t provide sufficient data. Therefore, you should combine innovation and financial accounting.

Some innovation accounting metrics are customer feedback, conversion rate, referral rate, number of website visitors, the average price paid by each user, willingness to pay a premium price, retention rate, and so on.

Product ideation

The next essential part of lean product management is ideation. It’s a process of finding appropriate solutions for your customers’ challenges. It helps you to find out if the product you’re going to create can solve users’ problems, and whether your solution will bring value to your customers. One of the most important aspects of ideation is ideas prioritization.

Product ideation is mostly connected to the exploration of your target audience and market.

Exploration

The exploration aspect of lean management is about finding evidence that your customers care about certain jobs, pains, and gains. That is, it’s about finding a problem-solution fit.

Product exploration includes identifying the target audience and their needs, defining the product’s value proposition, creating a lean canvas, and so on.

Market analysis

For lean product managers it’s very important to make sure the product fits the market. To identify the correct product-market fit they talk with a target audience to gather their feedback, research competitors to know their strengths and weaknesses, and monitor trends within their industry.

Therefore, one more thing that differentiates traditional product management from lean is the fact that lean product managers don’t blindly try to push the product forward, but know where to slow down the pace, stop or pivot.

Product strategy

Lean managers spend a lot of time building business and product strategies. They often sick for innovative and flexible approaches that can help the product stand out on the market and drive more sales.

Lean product strategy determines the essence of a solution you’re going to create, the target audience that will use it, the product’s value proposition, how you’re going to overcome competition, how the product helps you meet business goals, and go-to-market strategy.

Besides, building a product strategy is beneficial for companies that want to scale. 

Scale

Scale is about ensuring the product is still viable in the constantly changing market. As a lean manager, you should think out how to properly grow the product, how to scale a product team and work out the details of a lean product roadmap.

Lean product management in action: our case studies of designing products using lean thinking

In this section, we'll use several cases from our experience as a SaaS product design agency to show you how lean product management applies to the product design process and helps us create beautiful and usable designs at various stages of the product life cycle.

Defining competitive advantage for Process Place

Process Place is a workflow management software that aims at clearing up messy processes. Eleken was hired to design a prototype of the tool. And as you may know, there are quite many services in the market that deal with projects and tasks. It was important to find something that would help Process Place stand out from similar solutions on the market. Therefore, we started our work with a competitive analysis.

While analyzing other process management tools and looking for their weak and strong points we’ve noticed that they were all complex and bulky. So, we defined an intuitive user interface as Process Place's competitive advantage.

Next, we talked to users to make sure they need an intuitive user interface. And our assumption was correct, as during the customer research we identified that one of the main issues people are facing is messy workflows.

Conducting market analysis and customer research gave us the possibility to design an app that heals users’ pain points. 

User persona research for Handprinter

Handprinter is a unique startup that helps people track the positive impacts they make on the environment. They came to Eleken with the problem of onboarding new users. It was difficult for people to quickly understand the value this product brings, therefore they didn’t sign up actively.

In the best tradition of lean thinking, both Handprinter’s team and we understood that to design a product that people want to use, as well as inform our design decision, we should, first of all, learn who our target audience is.

By researching those who have registered on Handprinter.org, we identified three types of users and defined their main goals. Based on this information we were able to create an intuitive and simple user flow.

Feature prioritization for Prift

Our task for Prift, a personal finance platform, was to design a simple and minimalist MVP. 

As an important part of lean methodology, the goal of the MVP is to create a product that brings users value and allows you to learn the needed information to manage risks and adjust your further steps to produce a better solution, using minimum resources. Therefore, it’s essential for future success to correctly define that minimum set of workable features.

We decided to prioritize features with the help of MoSCoW analysis. We wrote down a full list of features that could be included in Prift and then split them into four categories: must-have, should-have, could-have, and won’t-have. As we were creating the minimum viable product we focused on the functionality from the “must-have” and “should-have” groups.

Conclusion

A lean methodology is a valuable tool that can be used to streamline product management practices. Applying the concepts of lean to product management and product design can help improve the efficiency of your product development process and result in products that people love and want to use.

In case you are looking to design an MVP or grow your product with the right design team who understands the power of lean thinking, feel free to contact us anytime.