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The Essence Of The Lean Startup For Big Business

My team uses data driven marketing and methods from The Lean Startup, but we've come a long way from lean. Here are the pointers we take from TLS, which any leader should consider incorporating into their own team.

14Feb

Trying to get a teenager excited about a game designed for toddlers is bound to fail. Walking into a Fortune 500 boardroom with a copy of The Lean Startup, TLS from here onwards, is not much different. As Harvard Business Review quipped in their article on TLS:

"It’d be hard to choose two words that feel less descriptive of life inside a large organization than ‘lean' and startup.’"

Or is it? Some of the largest industries today are being turned upside down by startups like Airbnb, Uber, Dropbox and Spotify. The smartest enterprise and big businesses are beginning to listen up and take some pointers, and I think they’re onto something.

Over 50% of corporations will use lean startup techniques by 2021 (research by Gartner), but we don’t have to wait for mass adoption until then. In a survey by Innovation Leader, 82% of executives said they’ve already deployed some elements of TLS. Perhaps this is why Eric Ries, author of TLS, will come out with The Startup Way in October. The premise? TLS for larger organizations.

With everyone [and their management trainee] adopting TLS, it’s time to ask: what’s this about, and what can it do for my business? I’ll explain below, and then offer some tools you can apply to your work method and team immediately.

Real Learning

TLS is about real learning. Often this isn’t what happens when we make mistakes. Mistakes get justified by saying “we learned a lot.” We might do a post-mortem. Likely someone compiles a report. Most of the content will be anecdotal, based on plausible assumptions that are hard to verify.

The essence of TLS is to learn lessons that can be quantified, verified, and repeated. If this sounds familiar, it’s because it's based on the scientific method. Ries calls this validated learning:

"Validated learning is not after-the-fact rationalization or a good story designed to hide failure. It is a rigorous method for demonstrating progress when one is embedded in the soil of extreme uncertainty in which startups grow.Validated learning is the process of demonstrating empirically that a team has discovered valuable truths about a startup’s present and future business prospects."

TLS applies the scientific method to business: if you don’t have a hypothesis that can be validated, what have you really learned? This is at the heart of the methodology and gets implemented through the Build-Measure-Learn feedback loop:

"Instead of making complex plans that are based on a lot of assumptions,you can make constant adjustments with a steering wheel called the Build-Measure-Learn feedback loop. Through this process of steering, we can learn when and if it’s time to make a sharp turn called a pivot or whether we should persevere along our current path.”

Broken down in simple steps this loop looks like this:

  1. Take an idea, problem, or assumption you want to test.
  2. Define your hypothesis of what will happen.
  3. Determine how you will test and validate your hypothesis.
  4. Execute the test.
  5. Review the results and write out your learnings.

This process might sound obvious and straightforward, and it is. But in the hustle and bustle of modern work it’s easy to skip one or more of the above steps. Worse, we are often tempted to test two or more things at the same time. This is the biggest mistake you can make: if you test two things simultaneously, how do you know which of the two influenced the outcome?

This also happens to be the most difficult aspect of following TLS. It’s hard to have the patience and discipline to test only one thing at a time in our fast-moving world. This is the paradox of TLS: you first slow down, before you speed up and make progress because of real learning.

This is How it Works

At this stage you might be wondering how this actually works. This is where the infamous MVP enters the scene.

The Minimum Viable Product is easily mistaken for a shabby, perhaps crowdfunded product, that barely does what it’s supposed to do. It's what the name implies. In some cases this is true, but the purpose of an MVP is not to be low quality, per se.

"Unlike a prototype or concept test, an MVP is designed not just to answer product design or technical questions. Its goal is to test fundamental business hypotheses.”

The MVP is about testing a hypothesis, not bringing a low quality product to market. But the confusion from the name doesn't end there.

An MVP can be much more than what we normally think of as a "product." In its broadest sense, it's any test that helps us validate our hypothesis. It can be a crowdfunding campaign, but also a simple email that gauges interest. It can be a landing page that "sells" a non-existing product. It could even be an internal draft memo you circulate to some people to test the response to a planned new policy.

The important part is to only build what is necessary to test your hypothesis. Nothing less, but certainly nothing more. It's about finding the simplest way to validate an assumption, instead of sinking precious resources into an initiative and hoping for the best.

This is exactly why TLS-thinking can be so useful for big business. It's not just for product design and development. You can apply the framework to marketing (which is basically what Growth Hacking is all about). But even for HR, finance, and other business disciplines, the idea of incremental improvements through validated learning deserves attention. In today's data-driven world, almost any business division can devise hypotheses and MVPs. It will save you money and improve the quality of everything your organization does. What more can you ask for?

What You Can Do Right Now, Outside of TLS

Business decisions and changes to methodologies don’t happen overnight, especially in companies that have been set in their ways for years. So what are you to do, as a forward thinking member of the staff? Consider operational tools and strategies that have helped lean startups succeed.

Roll Up Your Sleeves

Anyone who’s worked at a startup, or applied for a position within one, has been beaten over the head with this phrase. Roll up your sleeves, be a team player and get your hands dirty. With a lean team, at times you need to fill more roles than just the one you were hired for.

Explore the way your team works right now and, don’t give HR a heart attack but, try switching up tasks or roles little by little. Introducing team members to problems and solutions outside of their day to day can help them more deeply understand your business objectives. What does this [hopefully] lead to? A more involved team invested in supporting the business as a whole, instead of checking off their ‘To Do’ lists and calling it a day the first chance they get.

Get Rid of Email for Internal Communications

Email is no longer the faster way to get in touch with someone. Compared to the USPS, of course, but we’re living in 2017. Email for internal communication was outdated the instant Google chat became standard practice in startup culture in 2005. Now 12 years later, if you’re still using email to interact with your team, stop.

Adopt Slack. Big businesses can get slowed down with decision making because emails are easy to ignore. Startups adopted Slack to communicate instantly across entire teams, and work sped up. By simplifying communications, surfacing answers and decisions faster and streamlining workflows Slack will help your team get more done faster.

They even have Slack for Enterprise, built specifically for larger companies.

Make Some New Friends

With the people you work with. I’m not talking too-much-champagne-at-the-holiday-party friends, I mean the real kind. Opening up to your team and co-workers and investing in each other as people helps to build trust in each other and ownership in outcomes. We sometimes think of startups as just-out-of-college kids drinking beer and passing around funny GIFs and memes, but it’s more than that.

Having a friendlier attitude about management, whether that’s sharing a beer at the end of the day or allowing your team to take work-from-home days, relaxes your employees. A relaxed employee is less prone to stress and can make better decisions, and work up to their full potential more readily. When you give your team the freedom to work in a more relaxed environment, they can do amazing things like outperform themselves and exceed targets.

Changing Your Mindset

With October’s release of Ries’s The Startup Way we’ll hear more on how principles like this can be used by businesses of any size to grow revenue, drive innovation and more. For now, it’s all about incremental adjustments to your work environment.

Get your team out of the big business rut by thinking like a lean team. Not all startups are small, but the big ones had to start somewhere -- so take a step back and stretch the muscles that we’ve all got. You don’t have be a lean startup, like Pagely once was, or break policies to get a fresh perspective and enliven your team, you just have to change your mindset. 

Building blocks small

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