When organizations increase in size, bureaucracy and procedures can slow down and demotivate their innovation projects. The Lean Startup approach can give such businesses a new impetus.

“Sometimes, things would be much more simple if I worked at a startup…” the captain of industry sighed. “The scale of our business seems to make innovation almost impossible. I am afraid a new player will steal our market, sooner rather than later…”

I nodded silently. Indeed, when organizations increase in size, bureaucracy and procedures are great ways to slow down and demotivate their innovation projects. Then I laughed, because my influential friend had given himself the answer to his problems.

“So, why don’t you work as a startup?” I asked.

What is Lean Startup?

The captain of industry was no HBR reader. He was a self-made man who had come up with the Lean Startup approach all by himself. And yes, you can apply this method to big corporations, too.

Popularised by writers and entrepreneurs like Eric Ries and Steve Blank, Lean Startup was conceptualized as a way for new ventures with limited resources to tune into customer needs and to develop and launch new products and services. The methodology aims to shorten product development cycles and rapidly discover if a proposed business model is viable. This is achieved by adopting a combination of business-hypothesis-driven experimentation, iterative product releases, and validated learning.

Why Lean Startup?

Lean Startup works. Corporate players from a wide range of industries attest to that. According to a poll from HBR, the top 5 benefits of the Lean Startup approach mentioned most frequently by their corporate respondents were:

  • Making decisions based on evidence and data, rather than executives’ instincts.
  • A faster cycle time for developing ideas.
  • Better-quality feedback from customers and stakeholders, often because you’re asking them to actually buy something, rather than just spout opinions in a focus group.
  • “Getting out of the building”: speaking to and observing real customers and stakeholders.
  • More flexibility about making changes to ideas as they progress from concept to minimum viable product (MVP), to finished product.

How To Implement Lean Startup In Your Organization?

Of course, a startup is not comparable to a big company. While the approach applies to the whole organization in a startup setting, within larger organizations, it is about optimizing or kickstarting one specific part of the business. For example, a big media company can apply the methodology to the development and launch of a specific application.

It’s all about taking small steps. This helps to quickly test assumptions about your plan, your customers, and the earnings model, and adjust them if necessary. Examples of important assumptions for testing are:

  • Does your idea really solve a problem for the customer?
  • Is there a market for it?
  • Are customers willing to pay for it?
  • Is the technology available to realize it?

You can test your presuppositions through experiments. I am a great fan of the MVP methodology. I recommend my former employer Google’s Design Sprints to create an MVP quickly and efficiently.

After determining your key performance indicators (KPIs), you use your MVP to make a first measurement. Then you consider what your target metric is. Subsequently, you improve based on a constant test and learn cycle. In other words, you continuously ask the target group for feedback and use that information to develop rapid iterations for your product.

Finally, launch and scale the %6&!@# out of it!