Wednesday, October 2, 2013

Key Questions for Bringing Lean Startup to Established Companies

Guest post by Lisa Regan, writer for The Lean Startup Conference.

Our next webcast tackles a particularly challenging topic. On October 8 at 10a PT, we’ll be talking about bringing Lean Startup methods to established companies, precisely the kinds of businesses that are most resistant to experimentation, even as they desperately need it. Eric Ries will be joined by Patrick Vlaskovits and Brant Cooper, co-authors of the NYT-bestselling book “The Lean Entrepreneur” and frequent advisers to Fortune 100 companies like Hewlett-Packard, Qualcomm and Pitney Bowes. The webcast is free with advance registration and — the best part — features a live audience Q&A where you can submit your own questions for Brant, Patrick and Eric.

To set up the themes of the webcast, we asked both Brant and Patrick a few questions about their experience with enterprise companies. They didn’t pull any punches in telling us how difficult — and yet important — it can be to get leadership on board.

LSC:  What do you see as the most common reasons that large companies give for why they don't apply Lean Startup?

Brant:  In my experience, the conversations don’t ever go that way. Large companies don’t have to, and in fact don’t, justify choosing not to shift to a different methodology. In fact, most of our work is inbound, meaning that companies come to us already seeking to do Lean Startup; they’re already on board. I’m not currently in the business of – nor sure I ever want to be in the business of – convincing organizations to do Lean Startup. That's hard. That’s Eric Ries’s job.

Patrick:  Last week I had an interesting conversation with the CIO of a major European company operating in a mature, very profitable industry. His team was quite well-versed in Lean Startup, and asked hard and insightful questions. One theme that emerged a few times amongst the comments was essentially, “Yes, we think that Lean Startup could be hugely beneficial, but we’re worried about the changes in culture, organization and process required to pull it off.” Essentially, they have a “the cure might kill the patient” anxiety.

It would be too easy to shrug off their thinking as short-sighted, but I think their concern is valid. At the end of the day, it will be how they view the future of their industry, and their role in it, that will determine whether they see the coming disruption as something they choose to participate in, or remain willfully ignorant of.

LSC: What opportunities do large or established companies typically fail to see or take advantage of when they do attempt Lean Startup methods?

Brant: Companies take on Lean Startup for reasons that are all over the map, and they have experiences with it that cover a similar range. This is mostly because they’re not implementing the methodology in its entirety; rather, they have some concrete set of outcomes in mind. So I’ll see internal development groups trying to apply Lean Startup methods. And, companies that are modifying their design thinking processes are similarly interested. I also see employees attending Lean Startup Machine in essentially ad hoc efforts to try something new. Overall, this is part of a tendency to see Lean Startup as simply an evolution of Agile, and to mistakenly think that it thus “belongs” in Engineering, or that it’s only useful for new product endeavors. That kind of compartmentalization ignores existing products and processes, and encourages people to think that the methodology doesn’t apply to “their stage” of product development. 

In general, I think organizations are prone to seeing Lean Startup as a “tack-on,” a benefit to supplement the usual way of doing things. And while Lean Startup can certainly be useful from that perspective, the real missed opportunity for the company as a whole is in organizational transformation. In other words, why only make changes to a particular product or product line, when you could teach the entire organization, at all levels, to move faster, get closer to customers, and learn to continuously innovate?

Patrick: There is one area of low-hanging fruit that I do see for companies that institute Lean Startup as a “tack-on,” as Brant put it. That’s when the sales and marketing functions adopt Lean Startup for customer acquisition. By executing best practices, they can often realize huge gains in conversion from hitherto invisible opportunities around the funnel and the product.

LSC: Lastly, how can reform-minded individuals or teams address these resistances from within — that is, how can people interested in the methodology get buy-in up the hierarchy?

Brant: In my experience this cannot be only a grass-roots push. Somewhere in the C-Suite, there has to be an executive who has realized that a change in philosophy and in practices must occur if the company is to take “innovation” out of the realm of being just a marketing buzzword. This may be a maverick CEO, or a new CEO brought in for change, or one who simply has had an epiphany and is out looking for a new approach. We’re still in early-adopter territory here.

From that perspective, I’d say that the best path for reform-minded individuals is not to seek buy-in, but rather to attempt to foster an epiphany. That isn’t going to happen, at this stage, by seeking approval from your boss. But hey, we’re approaching the holidays. Buy the CEO or Chief Innovation Officer a copy of Eric’s book. With any luck, he or she will read it.

Patrick: I share Brant’s emphasis on leadership, but I think you gotta try the sandwich approach -- grassroots from the bottom and an aggressive leader from the top. Ideally, this kind of organizational change covers the entire spectrum of the business.


Our webcast with Brant, Patrick and Eric is October 8 at 10a PT. Register today to join hundreds of people attending, and bring your questions for the live Q&A.

If you’re thinking of bringing Lean Startup to your organization, we encourage you to take advantage of our team discount for The Lean Startup Conference, Dec 9 – 11 in SF: send eight or more of your employees and get a substantial break on the price. For more info on the benefits of team registration, see our post on fostering innovation in established companies. For pricing details just email our executive producer Melissa Tinitigan, and use the subject header “group discount.”

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