Are you familiar with Value Engineering? It is a relatively new technique that allows an enterprise to rapidly discard ideas that do not deliver value. This practice is new to many, and yet it is a truly Lean way of maximizing an organization's portfolios, products, and investments.
There are three basic steps/principles in Value Engineering:
1 – Hypothesize: Quantify what value is; examine whether a product delivers value that customers want to use
2 – Bet: Tests your hypothesis with experiments; track expenses, research methods, and analyst confidence
3 – Pivot or Persevere: Learn what’s providing value and what’s not to determine if investments should continue; track estimates against the actual spend
Value Engineering starts with building a customer-centric hypothesis that includes a definition of Minimum Viable Product (MVP). Next, by utilizing rapid feedback loops based on small, focused experiments, it enables a virtuous cycle of innovation in which "Run" activities enable growth. "Growth" activities fund innovation and the "Transform" actives are then operationalized to drive new "Run" activities. Ideas that are low value and low return are not pursued, and spending is placed in areas of high value and return. With Value Engineering, an enterprise can make incremental investments in small experiments to test product ideas. Instead of funding massive projects and spending money on ideas that may or may not work, companies can reduce spending on ideas that don’t work and increase spending on ideas that are easy to back and drive clear value.
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