What is a discovery-led strategy?

Nov 14, 2022

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We all read about great ideas that never get traction. Sadly, many individuals, start-ups and corporates have expensive lessons however in some cases, you can work your way out of the sunk cost problem by converting your approach into ‘discovery-led strategy’ forward.

Key takeaways

The trap of significant losses can be reduced with some methodical testing and planning.

What tools do you use when:

Desiring to move into unknown territory, how does one develop a robust planning methodology?
With such an unpredictable future, how do organisations allow themselves to be bold enough to pivot quickly?
Or when faced with disruptive competition or declining markets, how do you let go of the past and explore a new future?
And when asked to lead innovation, the usual corporate demand is for a definitive business case to follow .. an impossible ask, how do you respond?
Or if you have built it, and they didn’t come .. where can you move next?

We don’t talk about DISCOVERY-LED STRATEGY enough.

How do you salvage a sunk cost of a solution built which is looking for a problem? All the words of wisdom are to avoid this error in the first place, yet still it happens .. what do you do next?

Firstly, a bit more definition, a discovery-led strategy:

It is not a one-off project, nor a sprint, or consulting piece, not the ‘product-market fit framework’ used by capital investors, nor the ‘Lean canvas customer discovery’ used by startups.

It is a ‘solution looking for a problem’, a strategy whose sole purpose is to find a market for the solution. A strategy to stay fluid and follow the money for future developments. It is an open-ended process, of try, test, fail, until a niche or crevice is discovered and prised into.

As you can see, a very difficult stance for most business managers to accept.

The key ingredient for discovery-led strategies .. is to maintain a firm and structured approach in the process .. including and not limited to:

Assumptions testing
Methodical process towards testing
Setting test and exploration goals
Milestones, deadlines, timelines
Triggers / sensitivities
Measures of success
Decision making criteria

Yet many organisations and startup entrepreneurs still jump to conclusions, the old fashion way of believing the individual knows best. The difficulty comes in the self-discipline of the process.

In my 20+ organisations career, I have landed in many businesses with dire strategic problems, this tends to be my career journey. I this podcast I provide 5 examples where I have used Discovery-led Strategy

Examples 1&2: were startups who invested in building a solution based on the entrepreneurs’ terrific ideals. Both built their solution and both struggled to connect it to the problem, overtime traction and revenue generation were non-existent.

Examples 3&4: two different organisations, both well established, and their multi-$m revenue relied primarily on fixed term funding for the provision of healthcare services into a define audience base on behalf of their primary funder. Both over time, with increased competition, changing regulation, shifting consumer expectations and lethargy to innovate and evolve, had reached a critical end-of-life point and near immediacy of lost funding due to declining value propositions.

Example 5: was a the classic corporate idea which built a white elephant .. ie a solution with no evidence of market need, it gained no traction and was retired to the sunk cost write-off garage to gather dust.

Hopefully this gives you the energy to speak up about Discovery-led strategies. As long as the obstacles are not overwhelming from the getgo, and there is a willingness for patience, disruption and supporting change .. a diligent process will find a path forward.

Good luck!

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