Applying The Lean Startup in a Corporate Environment

Applying The Lean Startup in a Corporate EnvironmentEntrepreneurs and SMEs have gone wild for the “Lean Startup”
concept, popularised by Eric Ries. But despite claims it “can be applied to… companies regardless of size” the response from corporates has been muted. Perhaps this is because little guidance exists on how they can apply it. This article remedies this by setting out practical advice on for effective
application in a corporate environment.

The methodology was born from the observation that in conditions of extreme uncertainty accurately predicting what customers really want is hellishly difficult, therefore there’s little value in creating and executing a master plan. Instead companies should build a ‘minimum viable product”, ‘learn’ what works and continuously ‘pivot’. Multiple iterations are essential because, “failure is a prerequisite to learning”.

Many corporate executives will nod their heads at the above but struggle to see how to implement such an entrepreneurial approach. But it can be done and is being done with the right approach:

Set-up & Structure

Start by giving staff an overview of the methodology and use a historical example (to

de-politicise it) of a major company initiative that failed under the
traditional approach. Reassure staff that the ‘Lean’ approach will only be used
for projects with extreme uncertainty; routine employment unnecessarily slows
down projects and causes huge disruption in areas like planning and governance.
Then set up a small cross functional team of “Lean Practitioners” supplemented with at least two external entrepreneurial contractors to instill the right culture. (Contractors are better because you can rotate them based on project needs and to keep the thinking fresh).

The biggest barrier to corporate adoption of ‘Lean’ is the risk of reputational damage from launching unpolished offerings. Whist this can partially be addressed by targeting early adopters it’s better to use sub or new brands. Otherwise opponents of new ideas will perpetually, and somewhat justifiable, raise objections, which will at least slow progress. Mobile operator O2 has successfully adopted this approach in the UK and Ireland with its ‘Gif Gaf‘ & ‘48‘ brands. Both have undertaken experiments unthinkable for O2 such as risqué advertising and peer-to-peer customer service.

Leadership & Oversight

“An experiment forced to deliver the same outcomes as existing… business… quickly reverts to small incremental changes that… ultimately fail to discover anything radically new and valuable” (Karl Heiselman, CEO Wolf Olins). Therefore only set ultimate revenue and contribution run rates that need to be achieved as opposed to ramp up and other metrics such as customer numbers; and give them at least six months to do so.

Otherwise you’ll end up being to prescriptive and the team won’t be able to
fail, learn and pivot sufficiently. Also remember the Riesism, “Planning & forecasting are only useful in stable markets… [with] lengthy trading history”. Therefore keep these to a minimum and if corporate planners demand figures simply give them arbitrary numbers.

Delivering The Project

The biggest challenge for the ‘lean’ team will be maintaining momentum and not getting bogged in the usual bureaucratic morass. Overcoming this requires guerrilla tactics such as: temporarily bypassing of large CRM systems in favour of smaller solutions (or even manual processing), using smaller, cheaper and more agile agencies and freelancers.

Whilst ‘Lean’ is dismissive of pre-testing with consumers there can be value in doing so, especially with modern methods such as Vox Pox which are quick, cheap and highly insightful. (There also useful for reassuring project sponsors about it’s direction. Finally, if you do achieve early commercial success scale it ASAP, remember “Lean is a methodology not a blueprint” so flex it to fit your business.

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Applying "The Lean Startup" in a Corporate EnvironmentColin Duff is an Innovation Consultant at ?What If! You can follow him on Twitter @ColinPDuff

Colin Duff

Innovator & Lean Coach




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No Comments

  1. Aaron Eden on March 18, 2012 at 11:21 am

    While I agree with these principles you really have to take this on a case by case basis (each team will be different). You could have one business idea where it makes perfect sense to use the corporate CRM and another where it will just slow down their learning. I’ve been coaching teams inside Intuit regarding how to apply Lean Startup and you are definitely on the mark regarding barriers.

    I would like to also note that as LS teams run into barriers launching their products you should be taking lots of detailed notes and pushing the internal owners of those systems to make their systems LS friendly.

    An example of this is the domain name purchasing process we have inside Intuit. Like most large companies we need to make sure it meets trademark rules, legal approves etc. It takes a minimum of 3 business days just to get this done.

    Our first teams ran into this and we found work-arounds (like setting up sub-domains, personal purchasing, etc). After the team ran into this we went to our legal folks and got approval for our lean teams to buy domains as long as they did not include references to Intuit or our existing products. Once the team had validated some portions of the business model then we would put the domain through the normal corporate process.

    This allows us to leverage the power and resources of a large company while still being able to take advantage of the speed of LS.

    Aaron Eden
    Intuit Product Manager & Innovation Catalyst

  2. Colin Duff on March 21, 2012 at 11:40 am

    Hi Aaron,

    Firstly thanks for the reply and sharing your LS experiences.

    I’m glad you agree with the core principles and fully accept your point about them being generalisations, which need to be adapted on a case by case basis.

    Similarly you’re spot on re engaging with internal owners to make their systems more LS friendly. In my experience the biggest challenge is methodologies aren’t embraced across organisations. For example even the MD (i.e. very senior) of a business unit with responsibility for its product development can struggle to get traction with a reluctant Group Director (e.g. IS/Legal/Marketing). This underlines the necessity for the methodology to be embraced across the organisation (i.e. way beyond product teams) and get buy-in at the most senior level.



    P.S. Great examples on the domain names! I know organisations that would kill to be able to get them in a week.

  3. Craig Sullivan on April 4, 2012 at 8:16 am

    @Aaron – Hi there – we should talk sometime as I’ve long admired work done by your company and met a few people at Conversion conference.

    We make our own version of lean which involves rapid UX iterations and bypassing normal structures. We buy, use, rent the tools and services we need to execute, without the usual formal structures. Our development team is part of a ‘one team’ approach to product builds.

    For example, we were using tool X for browser testing. One day three of us looked at a new tool, decided it was better, ditched the old one, got the new one in and running QA on it within 24 hours. Just do it and the Done Manifesto are what we try to live by

    This lean approach is there in purchasing, UX, agile work, prototyping and analytics/optimisation cycles – so we get lots of stuff pushed through the site, tested, improved – every week. It’s working nicely with 15% global rise in conversion last year and in some countries, we hit over 40% increase in conversion rate – without a penny extra in marketing.

    Glad to hear tales and techniques for running lean teams in corporates – there are lots of us out there – we just don’t know them yet.


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