FlowImpact Yoga is a rising power in the fitness industry. A PE firm has just purchased it, and its leadership is hard at work, making the best of the holding period to grow and improve the business.
There are many ideas on the table. The leadership team realized that 1. They need to focus, and 2. Many of these ideas are business bets they would do well to validate/learn from.
Jim, the CPO, recalls a mode he read about once in an article about how Spotify Builds Products. It talks about “Think it, Build it, Ship it, and Tweak it. He suggests to the COO, Ella, that they use it to start managing their business initiative portfolio. Ella is curious and frustrated enough with the current way of working to read the article and agrees to try it out.
They set up a high-level Kanban board in their management tool, plugging in all of the inflight initiatives and categorizing them according to their current state.
There’s too much in the “Build It” category, which is worrying but unsurprising. That’s precisely what they were trying to address.
They decide, at minimum, to stop starting new initiatives until the queue clears up. They also review the business ideas in “Build It” more in-depth and uncover a few initiatives based on shaky assumptions that haven’t been validated.
They discuss these. Jim brings up the language of “Bets,” which he learned in the CPOs’ Slack Forum. They decide to apply the concept of outcome hypothesis with leading indicators to business initiatives, even though they aren’t strictly “products.”
They will now review these indicators for each initiative on a cadence to decide whether to continue investing, pivot, or stop altogether.
In their leadership meetings, they walk this Kanban board right to left. Ella suggested this based on some of her experience in Lean.
They start from ideas in “Tweak It” to see if they’re ready to move on to “business as usual.” Have we achieved our outcome hypothesis? What can we learn from the metrics? Are we still moving the needle, or are we seeing diminishing returns? Is this still the business constraint?
The new shorter midday class schedule aimed at the WFH crowd seems to be proven and well-tuned and ready to become part of SOP.
Then, they talk about business initiatives in the process of “Ship It.”
The heated yoga studios are being deployed throughout studios in the Midwest. (It’s been validated that they are a real hit in colder climates, but the jury is still out on the sunbelt, so that part of the initiative is being split off and is still in Think It mode).
Ella asked the leader for this initiative some questions about the learning curve of deploying the heated studios and whether the classes in ready studios are filling up according to expectations. Seems like they’re on top of it. They are acting like a mini-founder – excited about this bet, learning and adjusting along the way, facilitating a cross-functional team of facilities, yoga curriculum experts, and marketers to land this almost like a new business.
They then discuss the initiatives in “Build It.” They discuss outcome-oriented leading indicators from the “concierge” experiment in the Boston studio intended to increase customer loyalty and engagement. Enough evidence warrants “Shipping” this service across the network.
Jim is worried that the “inactivity-based churn call from the studio head” feature the churn task force has been focused on doesn’t seem like its moving the needle. Still, because churn is a crucial metric they ask the team to continue to experiment with different ideas and see what works.
Jim gives the team some ideas about how to structure their continuous discovery process and recommends working with Product Ops to help the team level up their product chops. (Remember, these are NOT product people; they’re business people exploring how to develop the business!)
Then they get to the bets in “Think it.” They look at the initiative to run a Yoga for Winter Sports class. What is the insight? What is the satisfaction gap this idea is aiming at? What is the outcome we’re hoping to achieve? What are the key assumptions we’re making? What gives us the right to believe? What would need to be true? Ella, Jim and the rest of the leadership team review the body of evidence and decide that while the idea is interesting, there’s too much going on right now.
Every month, the leadership team gets together and reviews their portfolio of business bets. Some of these are digital-heavy. Some of these have no digital aspect in sight. That doesn’t really matter – because they are all business bets that benefit from outcome-oriented evidence-informed consideration and decision making all along the way, with the leadership team trusting smaller cross-functional teams empowered to go think, build, ship, and tweak a “Product” or an aspect of a “Product”.
Ella and Jim are invited to the PE firm Portco Summit to present how they’ve applied a Product Operating Model to the business. The highlight of the talk is the outcomes/results section. While fewer business initiatives are in motion, more initiatives impact the metrics that matter, and the business has improved traction overall.
Dare we say there’s more Flow and more Impact?