Lessons Learned From Four Companies That Scaled Lean Startup

There‘s no magic formula for scaling Lean Startup within your company. Treat expanding Lean Startup exactly like you were running a project through the process.

steve blank has correctly preached that a startup is not a smaller version of a large company and companies are not larger versions of startups.

With that said, many companies are trying to operate more like a startup by searching for scalable and repeatable ways to do Lean Startup within their organization. However, company culture and processes built for optimizing the existing business model makes scaling Lean Startup difficult.

The way this often plays out in companies:

1. A senior leader reads Eric Ries’ The Lean Startup book and gets excited and buys the book for all reporting managers (she may also buy Alex Osterwalder’s Business Model Canvas)
2. Direct reports quickly read book and integrate the lingo — pivot, fail fast, MVP, and assumption — into daily conversations.
3. A few brave and entrepreneurial souls (and maybe even the senior leader) actually take some of the lessons from Eric’s book and try to apply them to an under the radar project and achieve some initial success.
4. The senior leader decides to pitch the idea of working in this new Lean Startup way (oops, no more under the radar) that requires actually talking to customers, failing fast, dry wallet tests, and MVPs at a larger scale within his company and…

Don’t get blown up when trying to expanding Lean Startup within your company!

5. The senior leader (and his first project which got better results faster than typical projects) gets blown up by his marketing, legal, and finance departments and expanding Lean Startup is no more.

Now the good news. There are companies who have successfully scaled Lean Startup and accomplished truly transformational business impact as a result. This past month, I was lucky enough to interview four corporate innovation leaders who have scaled Lean Startup within their organizations. The companies included GE, Transamerica, Intuit, and Humana. Keep reading for lessons learned from these interviews. Thanks to Aaron Eden at Moves The Needle for helping make introductions.

“The only sustainable source of competitive advantage in any industry is the ability to learn faster than your competitors.”

-Ari DeGues

GE, Transamerica, Intuit, and Humana cited two main motives for adopting and expanding Lean Innovation: 1) Gain a deeper understanding of customers’ needs and desires and 2) Increase operational agility and responsiveness to keep up with the speed of technological advances and evolving customer preferences.

A combination of stale products, stagnating profitability, increasing CAC, and decreasing LTV led each company to the realization that they needed to get better at commercializing products and business models that resonate with customers. Each company realized they failed to invest in developing a scalable and repeatable innovation framework built for a rapidly shifting environment and higher uncertainty search and discovery projects.

Based on my interviews with GE, Transamerica, Intuit, and Humana, several key lessons learned for scaling emerged. I hope these are helpful to anyone looking to expanded Lean Startup within their organization.

• Each company has its own “flavor” of Lean Startup and will need to test and develop a Lean Startup model that works best for the organization based on goals and culture. The recommendation of the innovation leaders interviewed was to treat expanding Lean Startup in your enterprise exactly like you would running a project through this process — customer empathy, hypotheses validation and behavioral experimentation.
• Aligning an internal Lean Startup program to where your company and culture is going will result in faster adoption and expansion.
• Clearly identify your company’s business case for scaling Lean Startup, then internally market and leverage the big problem Lean Startup is solving for your company into internal support for the initiative.
• Data from the four companies indicate that small (4–5 team members), dedicated, co-located teams leveraging Lean Startup have better project outcomes and employees who are more engaged.
• Successful Lean/Six Sigma work that optimizes execution processes can create natural synergies/opportunities to build Lean Startup initiatives for search & discovery innovation projects. GE’s and Intuit’s cultures were heavy in Lean/Six Sigma and leveraged familiarity with concepts into more agile, innovative-focused Lean Startup framework.
• Lean Startup will require modified operational processes (this is critical). Creating new marketing, procurement, and legal processes specific to Lean Startup framework will allow teams to move faster and with less operational overhead.
• Go where you are loved. Find early adopters, deliver great results, and highlight wins of early teams. Identifying and working with eager early adopters to deliver great results, will create traction and momentum throughout the organization.

It is still earlier days for doing Lean Startup at scale in the enterprise. There is no “right” way yet. However, my conversations with GE, Transamerica, Intuit, and Humana were valuable to me and my team as we try to buildout Lean Startup within our company and hopefully this article helps you do more Lean Startup faster at your company.

Please share any lessons learned you have about scaling Lean Startup within your company in the comments and don’t hesitate to reach out. I am interested in helping, brainstorming, coaching, mentoring any way I can. Please reach out here or at https://www.linkedin.com/in/ericsteege/.