Sense and Respond: How Successful Organizations Listen to Customers and Create New Products Continuously

by Jeff Gothelf

Amazon releases new software to the world every 11.6 seconds.

Managers need to be able to admit that they don’t have all the answers, and they must be willing, in the right circumstances, to submit their ideas to testing in the marketplace.

Often, requirements cannot be known in advance, and once a system is in use, new needs are discovered, creating new requirements.

many more decisions need to be made from the bottom up, by the people with the expertise to work with the material and with access to the most recent information. These people are the ones closest to the market, and not closest to the top of the organization.

Because of the digital revolution, businesses face new levels of complexity and uncertainty. The industrial-age approach to managing uncertainty was to make detailed plans. Because software systems are complex, that approach does not work. Detailed plans break down in the face of reality. The best way to deal with uncertainty is to adopt a continuous, small-batch approach that is oriented toward learning your way forward. This approach, pioneered in the software world, is increasingly relevant across the business because many operations are tied in some way to software.

Companies that value learning provide teams with business problems to solve, clear constraints within which they can operate, and clear success metrics. The teams then figure out how best to solve these problems, moving from question to question, with the success criteria serving as the barometer of progress.

The alternative to feature road maps is to make looser plans and then adjust them as you learn.

So declaring assumptions is the first step in figuring out what we know for sure and what we need to sense.

As you sit down with your teams to plan out your next initiatives, ask them these questions. What’s the most important thing or things we need to learn first? What’s the fastest, most efficient way to learn that?

Sense and respond is effective in the face of uncertainty because it actively embraces the idea. It starts with the notions that we don’t have all the information we’d like to have, and we’re not sure whether our plans will be effective. In other words, it starts with a certain amount of humility, a quality that is often in short supply in business.

Sense and respond in practice is about small, autonomous teams experimenting and learning in pursuit of a vision or a strategy. Teams learn their way forward by making loose plans, running small experiments, and testing their assumptions as they move forward. Teams focus on continuously uncovering value through a two-way conversation between company and market. Value is defined in customer-centered terms. This approach can work for startup teams and within large companies. Teams use any data they can find, both qualitative and quantitative. The approach works best with small, cross-functional teams. Sense and respond is more than a process; it’s a culture. It requires humility on the part of team members and leadership.