Your Brand: Innovation Asset or Albatross?

The Lean Startup Conference/Jakub Mosur and Erin Lubin

Big companies know that change is easier said than done. So what steps can leaders take to bring their big ideas to life? Cindy Alvarez recently shared her thoughts on the topic for Dun and Bradstreet’s Connectors blog. In anticipation of her upcoming webcast on August 27, at 11am Pacific with Lean Startup Company, we’ve republished it here.

As the director of user experience at Yammer (a Microsoft company) and former head of product at KISSmetricsCindy Alvarez helps organizations get closer to their customers. Her power tool is an experimentation process that helps teams learn faster. At the intersection of marketing, product and customer experience, Cindy encourages organizations to think past their brands to laser focus on the market’s needs. In this interview, she explains how.

Why are you passionate about corporate innovation?

I definitely would’ve started my career introducing myself as “a startup person.” The funny thing is, though, that in all of my startup roles, I was working with enterprise customers and providing value through helping them to experiment and respond to challenges more quickly. Through an acquisition, I now work for Microsoft.

In a big corporation, there are so many resources — intellectual, financial, and influential — that go mostly untapped. Just imagine how much they could achieve if just 5% of employees were more empowered, if just 5% of projects could move faster and backed by data!

What are the biggest challenges that marketers–and companies–face with respect to innovation? What’s holding them back? 

Corporations are burdened by what they perceive as one of their most valuable assets: their brand. “Brand” isn’t something you can monetize. Take McDonald’s: they have one of the most recognizable and beloved brands in the world. But their sales are suffering. They’re competing in a market that is rapidly shrinking.

I can’t count how many times teams at Microsoft have resisted building experiments or minimum viable products because “We’re Microsoft; we can’t release something that doesn’t meet the (extremely high) bar that customers expect from us.” Meanwhile, smaller companies can release things that are imperfect but are amazing vehicles for learning. They can use that learning to leapfrog the bigger companies.

What are the most important steps that organizations can take to become more innovative?

Organizations need to figure out a way to embrace being experimental. Having a separate “labs” brand, like Walmart or Google or Nordstrom, is one approach that I expect to see more of.

The first step is transparency. In most companies, communications are siloed; only the executives know the objectives and obstacles to any big initiative. And that’s basically telling the rest of the org, “We only trust these people to come up with solutions.” It’s wasting the brainpower of the other 95% of your employee base. We’re taking the 95% of corporations that are actually on the front lines, building products and serving customers, and telling them, “Nope, just do this clearly prescribed job and turn off the rest of your brains.” What a waste!

When corporations communicate transparently–when they share goals and objectives and setbacks–it empowers that 95% to speak up. It empowers teams to share information and build off what previous work has been done, versus reinventing the wheel each time. We’ve seen this happen in companies that have adopted Yammer wholeheartedly, but it doesn’t have to be any one specific tool. It just needs to be a widespread mindset change–away from “need to know” and towards “unless there’s a specific reason not to, I’m going to work openly and share ideas and ask for help.”

The next step is embracing an experiment-driven methodology. Many corporations consider their domain expertise to be one of their greatest assets. I believe it’s often an albatross around our necks. When you’re confident in best practices that worked for the past decade (or more), you don’t question them. When you have one employee who is “the expert” in a specific technology, you are less receptive to new ideas from other, less experienced employees.

The companies that have spoken publicly about experimentation–Facebook, Google, Amazon, Microsoft–all agree that 50% or more of the product features they test do not perform as expected. They don’t move the desired metrics. I think we can all agree that there are phenomenally smart, experienced employees at those corporations. But even the best of the best are wrong half the time. This means we need to treat every “known” as a hypothesis and test it with rigor. We have the tools now. Experimentation on new lines of business, new product features, service changes, marketing campaigns–all of these are very possible even for small teams to adopt.

What are some challenges your team has faced, and how did you overcome them? What types of data have played a role in helping you navigate this process?

Microsoft leadership has been pretty phenomenal in terms of leaving Yammer alone to let us continue with our lean development methodology and experiment-driven culture that has worked well for us. But in any acquisition, the new team has to learn to collaborate with “the old guard.”

One of the challenges we’ve faced has been from teams who aren’t even skeptics; they actually love the concept of being more agile, more lean, more experiment-driven. But they’re simply overwhelmed by how to translate every part of their existing process–a process that worked for three decades and made Microsoft billions of dollars, by the way–into this new world. How do you change product prioritization? How do you make data-driven decisions when the infrastructure for measuring isn’t in place yet? How do you evaluate employees when “shipping product” is no longer the goal?

We’re actually still trying to solve this. It’s not an easy problem! Finding allies within Microsoft who know the system and want to drive change has helped tremendously. So has being very mindful of which approaches work–for example, the phrase “minimum viable product” just doesn’t work within Microsoft. People hear it as “releasing crap products” and then they just stop listening. So we talk about being “hypothesis-driven,” because it’s really that mindset that matters the most. Our data analytics team does training and outreach to teams that want to be more data-driven. I’ve just started a series of workshops for program managers, engineers, designers and researchers, to give them practice in thinking in “hypothesis-driven” ways. You have to take a Bayesian approach, because different things work for different teams and people.

Any other advice that you’d like to share?

There’s a lot of magical thinking around Big Data these days. People tend to assume that if you just collect enough data on what customers are doing, you’ll magically spot patterns that lead to amazing innovations. That just doesn’t happen. Big Data is just a pile of numbers. It doesn’t yield anything unless you ask the right questions of the data. At Yammer, we have an amazing partnership of data analysts and user researchers. Those two ways of thinking, together, is what gets us great insights.

People tend to prefer quantitative data over qualitative data. I understand that; intuitively you think, “Okay, one form of data is telling me what 20 people are doing, the other form is telling me about what 20 million people are doing.” But quantitative data can never tell you why things are happening. At Yammer, we have plenty of data telling us when customers aren’t using certain features or behaving in our desired manner. But the numbers don’t suggest any ways of solving that problem. It has been through deeper, richer, and much smaller-scale user research that we’ve gotten clues towards solutions.

Join Cindy in This Week’s Webcast

Through our own customer development at Lean Startup, we found that one of the biggest struggles intrapreneurs have is getting the buy-in from decision makers. As the Director of User Experience for Yammer (a Microsoft company), this is something Cindy Alvarez is an expert on. This Thursday, August 27th at 11am PT, she is leading a Lean Startup Webcast, Get Buy-in to Drive Change: Bringing Lean Startup to Enterprise. Register free here. By registering, you will have immediate access to the recording.