How Difficult – Proof vs. Work

[TRANSCRIPT] So, as you move to thinking about the probability of success, what’s usually hard about this is that people think about risk and work, not proof. So I want to introduce you to the idea of what is a proof point and make the distinction between risk and proof.

So if you look at this graphic of the cat, this cat is focused, has its eyes on the prize and what it’s going to take to get that.

And that’s what proof is about. He’s in a bit of a hazardous situation. That’s the risk, but you want to keep your eye on the prize. So to maybe illustrate this, let me give you an example. If you can rewind yourself to around the year 2000; this idea for an ATM of photo printing, you can see this in this graphic here, a beautiful demo.

They had done it really, really well and worked out all their customer needs. Folks were excited about it. And it’s built on this really cool technology that just takes four by six prints and puts them out rat a tat tat]…. kind of like that. So you go up, you stick your camera card and you get a ton of four by six prints.

Now, it may be hard to remember, but in 2000, there were billions and billions of four by six prints being printed in retail places. So the idea here is to have this kind of spread around and we’re going to use these to record meetings and share pictures of soccer games and things like that… so, the ATM of photo printing.

Now, when I started working with this team, I asked them, what are the risks in this project? And they said essentially supply chain. So you see this is an unattended kiosk that has to run at a very high reliability at a very low price point. And so they’re kind of right. You know, that could cause problems, that could cause the project delayed or go over budget.

You really have to get that right. So, they’re right. But it’s not really about what’s going to make or break this project. You see, this is something that is a lot of work for HP, but doesn’t really drive the proof of this project. So think of it this way… in the year 2000, make a list of all the companies that will be really awesome at consumer electronics, supply chains, and printing.

And I think you’ll realize that HP is maybe number one or number two. I mean, they’re going to get this. So the interesting thing about this is these are all engineers. They love to do this kind of work. So this supply chain stuff and this design work are in their comfort zone. And so when people express this risk, they talk about things relative to their comfort zones.

So I want to change the question a little bit, and I’m going to ask the question, what do you need to know personally before mortgaging your house and spending your kid’s education fund to fund this project? So this is a very different kind of question. I’m really asking what is going to make or break the business idea, not what’s between you and accomplishing the deliverable.

And so if you think about this, which they did, there are many answers to this question, but the big question is behavior change. Now, at this point in time, they had studied it. Customers love it, they tried it, but the question was, will people go out and do things differently when they stumble across one in the company cafeteria or near a soccer field?

Are they going to be thinking about taking their pictures and putting them in camera cards and printing them and sharing with them each other and all that? Is there a kind of behavior change? If change doesn’t happen, this idea is dead.

The interesting thing is how do you test the proof point?

So the project plan is pursuing this work. They’re doing an execution plan pursuing the work. And there’s nothing in the supply chain that will tell you anything about behavior change. So what they came up with was they saturated a zip code with prototypes. This was a head bender because the prototypes lost money and they had all these technicians on standby, kind of ready to run out and work on them.

And they ran this test for a while. What do you think the answer was? Turns out…. this is a novelty. People won’t change their behavior. So this may sound bad, but there’s a happy ending to the story.

But the thing is this proof point kind of goes for the juggler. It’s like, if they can’t pass this, this idea is dead, or maybe more accurately, this strategy is dead. This ATM of photo printing isn’t going to work out. And indeed they had gotten too far on this idea without testing the fundamental questions and assumptions.

So the best proof points are problematic. There’s something really concerning like behavior change in this ATM of photo printing, and they’re also decisive. That is, if it doesn’t work out, the idea really is dead or has to make a major pivot.

The flip side, though, of this is if you can overcome a proof point, the idea has just been powered up dramatically and you’re probably ready to double down on it. But the thing about the proof points is because they are problematic and because they’re decisive, it means they’re uncomfortable and scary.

So you need to think about this pretty carefully in your kinds of projects. Now, when you get outside of your comfort zone like this, and a major thing happens, and this is the happy ending to the story precisely because HP was exploring its area of ignorance. They started putting these kiosks in different locations.

And what they found is when they went in stores, store owners were saying things like I don’t need the kiosk. If you can cut the head off and add an ethernet cable, I’ll write you a check today. See, what they needed was fast printing. A lot of stores had been kicked out of the photo business and they couldn’t really operate anymore with the old methods, but this is an inkjet printer, it’s really fast. It’s amazing. And it gave them a way back in.

And so HP was able to learn rapidly because it went after this proof point. And so I think of this in terms of looking to the horizon a little bit and imagining where your Pivot is going to be and defining the proof points around the places where the project could really shift. See, the underlying technology didn’t fail. This fast printing still works, but the idea of the ATM of photo printing died and is replaced by this mini lab kind of idea. So the strategy shifted pretty dramatically.

So as you think about your proof points, there are four big areas where there are often proof points.

There are other areas too, but these just come up over and over again. You could think of these as the four basic questions you have to demonstrate to deliver on innovation. So the first one is, does anybody care? This is fundamentally a market customer kind of question. The second one is, can we do it? This is a technology solution. And most companies are strong at one or the other of these two and they spend their time in their comfort zone, and essentially it’s overworked. So I’m pretty sure your proof point is going to be somewhere that’s outside of what you’re good at because that’s the nature of this, this area.

Two common ones that people are outside what people’s comfort zones are the strategic and economic questions. This is the, Should we do it question? That’s all that business stuff around whether the thing is actually going to work as a business. And another common one is around organizational issues. If you have any kind of innovation involving new kinds of partnerships or new channels or things like that. And you think about who, who does it. So that’s the fourth one.

So as you think about proof points, think about these four categories to kind of stimulate your thinking. Proof points should be few. You just want a couple and they should be kind of scary and go for the juggler, and that’ll really help you get clarity on the probabilities of success.