Aim High. Start Small. Scale Rapidly.

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“In big companies projects have to scale and Lean Startup help us to do it” – Beth Comstock, CMO of GE

The book The Lean Startup by Eric Reis has taken the technology world by storm and influenced the thinking of many startups. The Lean Startup approach helps startups create something new and of value under conditions of extreme uncertainty. In Silicon Valley and beyond, the approach has revolutionized how entrepreneurs start new companies. Now, many people are adapting these practices within large enterprises in order to accelerate innovation.

There’s a big reason that large companies need to innovate and act more like startups—those that don’t aren’t likely to be around for long. According to the consulting firm Innosight, the average lifespan for a company in the S&P 500 dropped from 61 years in 1958 to 25 years in 1980 to 18 years today. What’s even more astonishing is that, at the current churn rate, 75 percent of the S&P 500 will be replaced in 25 years.

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This background provides the context for understanding why executives in big companies feel tremendous pressure to innovate. Consider these comments from Beth Comstock of GE and Scott Cook of Intuit.

“Our traditional teams are too slow. We’re not prototyping fast enough, not innovating fast enough. We need to systematize change.” – Beth Comstock, CMO of General Electric

“I got sick of wasting months and years of engineering time on products that just weren’t going anywhere and weren’t changing customers lives. So, as a result, we’ve recently blown up the way in which we develop products” – Scott Cook, CEO of Intuit

The Lean Startup approach helps startups use both money and human creativity more efficiently and effectively. Inspired by lessons from lean manufacturing, it relies on empirical results that validate learning. This is brought about by rapid experimentation. The approach focuses on learning what customers actually want and measuring actual progress, and it encourages organizations to shift directions with agility.

With the Lean Startup approach, the team’s goal is to put something in front of customers as soon as possible in order to get their feedback. The illustration below depicts this process and feedback loop. The goal for the team is to move through this cycle as quickly as possible.

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Rapid iterations and feedback loops allow teams to test their earlier hypotheses of customer value. Customers provide feedback and teams observe and gather data around customer behavior, usage, and experience. The knowledge gained through this process allows teams to adjust and pivot in order to maximize value.

There is nothing so useless as doing efficiently that which should not be done at all. ~Peter F. Drucker

In a world of increasing complexity—where both the scale of change and speed of change is greater than ever before—it is difficult to predict with confidence the products, services, and experiences that will be well received by customers and that can be delivered profitably. Unfortunately, many of the approaches used in the past are predicated on the subtle assumption that we can make these predictions. As an alternative, the Lean Startup approach is a data-driven, adaptive process than emphasizes pivoting based on what’s working and what’s not.

Is your organization faced with the need to move faster? to innovate? to respond to a changing environment? to adapt to new customer expectations?

If so, are you adopting these or similar principles and practices? What are you changing in response? Please share your ideas and comments on what’s working for your organization.

Republished with author's permission from original post.

Dave Birckhead
Dave is the Global Head of Marketing Technology at Spotify. He has worked with numerous Fortune 500 companies to bring about marketing technology solutions that optimize business performance, accelerate innovation and enhance marketing. You can find Dave on Twitter, LinkedIn and Google Plus.

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