How a Bottom-Up Approach Revolutionizes Innovation

An opinion piece by CEO, Philipp Petrescu, on how government organizations can successfully leverage the bottom-up approach for innovation and build award-building products.

The Unstoppable Force of Bottom-Up Innovation

The German GovTech sector is in need of a push toward digitization and modernization, and a bottom-up approach will be a key factor in its success. 

We’ve leveraged this approach at MVP Factory with the Cyber Innovation Hub of the German Armed Forces for a solution that will be implemented and scaled at the NATO level, showcasing the power of involving relevant parties during the innovation process.

Germany has a famously complex, convoluted system of 11,000 municipalities, with numerous projects currently underway nationwide in a push to digitize administrative services quickly. 

However, despite these efforts, I am convinced that administrative services will only gain widespread acceptance if they are designed from the users’ perspective and address their pain points - an approach that has been common in the private sector for decades. 

A bottom-up approach that focuses on the needs of its end users is essential for Gov-Tech to develop digital products and services successfully. MVP Factory, Visitrans, and the Cyber Innovation Hub of the Bundeswehr  (CIHBw) successfully exemplified this focus on bottom-up user-centricity and conducted a hands-on, co-creation process. 

We hosted an innovation hackathon challenge, where soldiers had the opportunity to pitch their ideas, all focusing on problems they had encountered. One of the ideas submitted was by three young officers that solved a challenge they’d faced: in the event of a possible combat mission, soldiers and materials such as tanks must be effectively assembled to be ready for deployment within 48 hours. This painstaking task was previously done on pen and paper, which was time-consuming and ineffective, and the need was to transform it into a sleek, digital process.

MVPs thrive without the need for perfection

The innovation journey began with the three officers and their original concept. 

First, we examined the officers’ problem to understand the crux of their pain points when bringing together materials and personnel on-site. This allowed us to spot the inefficiencies and understand where the collaboration and hand-off with other colleagues failed. 

After a successful validation process, we created a software prototype, which will eventually form the technical foundation of the end product. The initial prototype did not need to be polished in terms of design or functionality, as it was intended to be quickly deployed and tested on end users without being a full-fledged solution. 

From the insights gained from this initial prototype, we defined and tested a Minimum Viable Product (MVP). While a holistic approach is necessary, MVPs shouldn’t have perfection as their benchmark. The primary goal is instead to receive speedy, pragmatic feedback and iterate the concept as you go along.

The direct involvement of the officers throughout the entire development process was crucial to ensure that the solution would be utilized in the end. This was also confirmed by NATO during the 2023 Innovation Challenge, where the team won first place with the software solution: "Groundbreaking concept, remarkable vision." Moving forward, scaling will now take place at the NATO level.

Philipp and Johannes at an MVPF Event

The case against over-engineered, irrelevant solutions

All too often, I come across projects where something has been in development for 10 years, only to find out later that the user didn’t need the solution in the first place. However, for the quick building and testing of an MVP, the user’s voice must be heard above all else. Instead of focusing on shiny, sleek solutions that offer little utility, I’d like to see less glorious topics, like a Tax Office Hackathon challenge, or Mr. Schmidt’s groundbreaking innovation for the Köpenick Building Authority, be explored. 

We need innovation that solves real pain points. Many employees have lived through the idea backlogs but few have successfully implemented a new initiative - this stifles innovation in its infancy. 

A sentence I hear from surprised participants in our projects often is, “Oh, this is actually going to be implemented.” 

An MVP can always be directly integrated into the core organization, even without complex integrations, as long as data exchange is limited to the bare essentials.

Neglecting to engage users leads to lower acceptance rates

Through the integration of "Living Labs" or "Real Laboratories," attempts are already being made in many areas to involve real users in the development process actively. Ultimately, it's about involving the people close to the root of the problem and inspiring them. 

Despite some project conditions being imperfect, enthusiasm can play a significant role in the success of any solution. The vital element? The more you involve users from the get-go, the more likely they are to accept and use your concept. 

I am convinced that people's capacity for enthusiasm, combined with an agile approach and the involvement of various interest groups, forms the foundation for successful endeavors. 

My appeal: No more bulky, over-engineered projects without user-centricity!

After working at Mckinsey and J.P. Morgan, Petrescu founded Lendico, among others, with a successful exit to ING Diba during his time at Rocket Internet. In 2018, the young entrepreneur founded MVP Factory - a leading European product and venture builder. Feel free to reach out to him for a conversation on innovation and digital transformation.  

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