Eric Ries’ relatively recent tome Lean Startup is gaining serious traction among companies ranging from 10 to 100,000 employees. The overriding theme: You don’t have to be a startup to go lean — even the largest companies can re-learn how to be nimble, think different, and innovate.
There have been several high profile examples of this lately. An easy one is Google, with its small dedicated team behind Google Glass suddenly disrupting what we all think the future might look like. But it’s happening at more traditional behemoth’s too. Last year, General Electric made big news about bringing manufacturing back to the U.S. — and completely rethinking its approach at the same time. The company’s Appliance Park in Louisville, Ky. is applying lean startup attitudes to reinvent factory and design work.
Being able to act like a startup on the inside is becoming critical for some established industries. Automotive, for example, is undergoing a major shift as cars switch from analog to digital. With center consoles completely computerized, big auto firms are starting to think like software companies. In 2011, Ford’s senior technical leader for infotronics talked about how car companies need to hire for and support software development – with an extra challenge of fitting use cases where drivers are using software at highway speeds. The company’s investment in digital infotainment system, Ford Sync, and its willingness to open it up to third-party developers has borne this out.
Another prime example is the Ford Fusion Energi plug-in hybrid. It essentially started with a small team and a cardboard box used to simulate the size and shape of the battery needed to power the car. Working quickly, the squad of engineers on the project mocked up what the vehicle would look like, and got buy-in from management. What didn’t exist is now a budgeted program at Ford, and a car on the road today.
So how can larger companies encourage ‘intrapreneurship,’ and what does that look like in practice? Below are three opportunity areas that can yield surprising, innovative results:
Experience can be the enemy of experimentation at large companies. If your firm’s been in existence for decades (maybe even more in the case of P&G and the like), you’ve worn some pretty deep grooves in terms of what works, what doesn’t, and how business is done day to day. There’s an innate sense that an idea will go somewhere or not, and suddenly you’re seeing a lot of ideas getting killed early — or not even being expressed because they don’t fit the defined mold that has evolved over time.
This is dangerous for many reasons. The only way to stay ahead of the market, and surprise and delight your customers, is to bring an unusual idea to market. This requires investment. It requires a lot of buy-in from stakeholders throughout the company — stakeholders who have every reason and inclination to kill it because it’s new and untested. When this happens, employees from top to bottom get conditioned to only focus on the ideas that they know will work. There’s no diversity of thought.
What you want is a very wide, diverse pipeline of ideas early on. It’s important to nurture them and shield them from forces that might weed them out prematurely. This is the only way products like Google Glass, or even the iPad have been made possible. Because, even though they didn’t look like what had succeeded in the past, they were given a chance to develop. Extreme uncertainty needs to be tolerated so that the unexpected has the chance to happen.
Speed is of the essence when you’re trying to innovate from within. At large companies, there are many sharp eyes fixed on how many resources are being used for projects. And there’s a very serious bottom line that can’t be totally ignored. This is why all of these diverse ideas you’ve developed need to be tested and either developed more or discarded fast. “Fail fast” has become the adage used to describe this process, and it does a good job of describing exactly what needs to happen. It’s imperative that you start off with a lot of ideas, with only a few projects surviving. Finding these few is all about accepting failure and moving on.
Velocity is most often achieved by keeping teams small and agile. In order to see if something will work, you need to be able to build a prototype, test and measure its performance, and then decide what to do with it. The more cooks in the kitchen, the slower these steps will progress. Consensus building is at odds with intrapreneurship. Now is the time to move on hunches, pivot based on preliminary results, and float minimally viable products to see what happens. Not everyone needs to agree along the way. Carving out space, time, and resources for small autonomous teams to do their thing is the best way a large company can start to go lean.
Instead of listening to past experience or internal stakeholders who may be overly opinionated on what’s worth exploring, it’s important for big companies to listen to their communities. This is something that they are notoriously bad at, with the public assumption that even customer service is going to be a terrible debacle when dealing with a large company. How can you source good feedback and really figure out what new things your customers want if this is the case?
Companies need to invest in building tools to connect with and communicate better with their customers, and everyone in their ecosystems. Experimentation should be fed by data coming from customers. In Lean Startup, Reis even suggests that the person or team experimenting should be the one closest to the customer and that they should go ahead and test theories without the blessing of senior management. And when it comes to understanding what customers want, it’s not all about how they use the one product you’re focused on, whether its your car or washing machine or laundry detergent. It’s important that customer communication takes their whole lives into account. You never know where you’ll spot a way to make their daily processes just a bit easier, or relieve anxiety that you may not have known about otherwise. In an extreme example, Intuit has a “Follow me Home” program, where everyone from the CEO to engineers can shadow a customer to see how they live and what their daily needs are like.
Creative programs like this help feed the diversity of ideas that are then tested and so on until great things happen.
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