Enterprise Case Studies Part 1: Big Companies Succeed When They Kill Bad Ideas Quickly
Written by Jordan Rosenfeld, contributor for Lean Startup Co.
Editor’s note: From now through the end of the year, we’re offering excerpts of talks from select Lean Startup Week 2016 speakers. These pieces are a combination of tips from their presentations and interviews that took place at the conference in San Francisco.
Large organizations and scrappy startups may approach business with different goals, but enterprise companies can benefit from adopting a startup mindset. The most important framework for any company, no matter the size, is “focusing on the customer from the very beginning,” says Susana Jurado, Head of Innovation Portfolio-Product Innovation at Spanish telecommunications giant Telefónica.
Rather than spending months creating a prototype and then testing if customers wanted it, Telefónica has seen success “by taking every step with the customer.” This allows teams to determine early on if there is a problem and come up with a solution for it. “One thing we realized is that when you are applying Lean Startup from the very beginning, [you’re] learning about customers and the market,” says Jurado. “That information is an absolutely key part of business.”
The Advantages of “Killing” Early
Adopting a customer-first approach has allowed Telefónica to operate twice as fast. But it isn’t just a matter of producing products earlier and quicker than usual; the new mindset has given the company the capability “of killing things very quickly,” says Jurado. No organization likes to junk a project or product it has invested hours and money into, but it’s much better to do so as the result of early feedback from users. “It’s the customer saying very nicely ‘I don’t need it,’” Jurado says, which allows businesses to face reality and stop wasting time and money.
This approach has allowed Telefónica, a 90-year-old company in 21 countries, to “do more with less,” Jurado says, and put out 50 percent more products within the same budget and time frame. Walking hand in hand with the customer “gives you more opportunities to test many more ideas. The more ideas you test, the more probability that you find an idea that is successful,” says Jurado.
Focus on Problems, Not Solutions
Jurado says startups and big companies alike are prone to the same error of “focusing a lot on the solution from the very beginning. There are those that say, ‘I’m going to make such a great product and then the customers will come,’” which she says is going about things backwards. Instead, it’s very important to “first understand what the problem is that you’re trying to solve, and then validate that it is a real problem. Because if it’s not, nobody is going to pay for it.”
Hack Your Culture
Any entrepreneur with the goal of getting a large company to innovate will have to start, Jurado says, by “hacking your culture” — or becoming an expert on the existing culture. Understand where you might encounter resistance, and that you might not get immediate agreement on the changes you want to make. Jurado admits that even though Telefónica has begun to adopt its customer-forward approach in all areas, the metamorphosis didn’t happen overnight. However, once these new practices begin, they can change everything. At Telefónica, Jurado says, “Lean Startup principles are just part of our DNA now. From the very beginning, people in innovation teams are so focused on the market and the customer that their language is the same as in the business unit.”
Start Small, Be Patient
Of course, when attempting to make changes within a big company, Jurado warns you should start small, which might mean putting together a tiny team to adopt a new way of doing things, or tackling a smaller project or goal. Part of Telefónica’s current “DNA of working” is to be as interested in the results of a failed project as it is in a success. Patience is necessary when you try to change any company culture, after all. “When you learn that something has worked, you try to continue applying it,” she adds. Ultimately, the proof will be in the outcome. “If you bring results, people will be willing to listen to you,” she says.
Enjoyed what you just read? You can watch Susana Jurado’s full talk at Lean Startup Week 2016 here. Learn more about Lean Startup at http://leanstartup.co.