It takes a Leap
This is the first post in our Lean Startup Co. Education Program series. A curated collection of pieces designed to cover topics ranging from cross-functional teams, to embracing failure, complete with real-world stories from our diverse roster of clients and insights from our Lean Startup Co. Labs Faculty.
When Eric Ries arrived at General Electric in the summer of 2012, he admittedly had not worked with a global, highly-matrixed industrial enterprise the size of GE; and those of us who partnered with him to develop FastWorks, knew little about what to expect. Fortunately, it was the start of a partnership that has lasted more than five years and has transformed GE’s business practices, while also inspiring the company to evolve its culture to be faster, simpler, and more customer-focused.
I was privileged to be part of the original team at GE that worked with Eric. I helped build training for leaders throughout the enterprise, and was the FastWorks coach for the team that completely transformed GE’s performance management system for 200,000 employees. Now, as a member of the Senior Faculty team at Lean Startup Co. Labs, I am privileged to travel the world helping businesses with innovation tools and training. With that experience in mind, here are some critical lessons I’ve learned along the way:
It Takes Hands-on Leadership
Understanding the fundamental distinctions between “modern companies” and “traditional companies” is an important first step in transforming management in a large enterprise. In The Startup Way Eric points out that a traditional company is “composed of managers and their subordinates, but a modern company is composed of leaders and the entrepreneurs they empower.”
Leaders often want one key innovation that will unlock unrealized potential, but companies need to be focused on developing a method for finding breakthroughs as a sustainable part of their long-term growth. Without embracing entrepreneurship, long-term growth driven by new products is unlikely. Start by making entrepreneurship a core function, ensuring that someone is responsible for it on the org chart just as other functions are responsible for marketing and finance.
I’ve often heard people say, “We’re trying to drive a change to a more entrepreneurial mindset from the bottom up.” And while it is important to start with small teams, real impact requires the leader support and accountability, which a critical function like Entrepreneurship can provide.
It’s a journey without shortcuts
Enterprises have a lot of policies in place to reduce risk, and to put out as perfect a product as possible. But Lean Startup is all about taking risks and putting test products in front of customers. Many of the companies I work with now realize that they need to change other systems and processes inside their companies as part of their natural evolution.
Without a commitment to a new approach from senior executives, teams applying Lean Startup methodologies are more likely to be blocked by existing procedures and expectations and the assumption that change is impossible. Transforming an enterprise requires a willingness to explore the deep systems and structures that require change to support a different way of working. Teams need assurances from senior leaders that if they work in this new way they won’t be eaten alive by middle managers with conflicting goals, or have resources pulled off projects.
When I was at GE, often companies would call me and ask how we changed the performance management approach. Quite simply, I couldn’t do it without talking about the Lean Startup mindset of building, measuring, and learning. People would sometimes reply, “We just want to change how we score people at the end of the year.” But there is no shortcut for implementing a Lean Startup approach. Change requires change… and it’s rarely easy.
Start with, “What can we do?”
Of course, a fully functional Startup Way practice will take more than a just a box on an org chart. Ultimately, every department will be asked to work a little differently, and that requires some tough conversations across an enterprise. Often the conversation will start with, “Here is what we can’t do,” while in fact, the focus needs to be on what you can do.
One head of the legal department realized that his team was preventing rapid innovation, and he wanted a solution. He facilitated a meeting with everyone in the department. The legal team actually lamented always having to tell people no, but felt constrained by rules and regulations. The solution: a one-page document that laid out a series of parameters within which teams would be pre-cleared to experiment with new ideas. By working with the legal team to brainstorm what could be done, the company was able to speed up product development.
Keep your sense of humor… and eat chocolate.
“Making this kind of profound change to an organization’s structure is like founding the company all over again, whether it’s five or 100-years-old,” Eric reflects in The Startup Way. It is what he calls “the second founding,” and founding a company is not easy work.
It’s hard, and it’s going to take time. Chocolate helps, as does teamwork. Most importantly, it is worth the effort. At GE, employees all around the world are now working faster and smarter, learning more quickly about opportunities for success, and recognizing early-on which opportunities are likely fail.
Thanks to Lean Startup Co. Education Program Faculty member Marilyn Gorman for contributing this piece. Her specialty is applying Lean Startup principles to impactful and innovative programs, and large-scale organizational change initiatives.
If you seek to bring the entrepreneurial spirit to your large complex organization, Lean Startup Company can help. We offer live and virtual training, coaching, and consulting to empower people and companies to solve their own problems using entrepreneurial management, no matter their industry, size company, or sector of the economy. Email us.