Opinion: How managers may be sabotaging their team’s Lean Startup efforts

Photo credit: konstantynov / 123RF Stock Photo.

The Lean Startup began as a grassroots movement in the startup ecosystem. Over the last decade, its followers have developed a powerful toolbox of techniques and methods that can help innovators create sustainably profitable business models. Noting its success, leaders in large companies have begun to take an interest in how they can use this toolbox.

Just like in the beginning, Lean Startup in large companies often starts at the grassroots. The main request we’ve been getting from leaders over the last three years is to train their product teams on how to use Lean Startup methods and tools. While that is challenging work, product teams take to Lean Startup methods quite well. The real challenge is what happens after the training.

The innovator’s rhythm

The problem is that the newly trained product teams often find their way back into a company that is not set up to support their new skills and ways of working.

Entrepreneurship and innovation work at a certain rhythm and pace. Product teams use this rhythm to identify their assumptions, run experiments, and use data to make evidence-based decisions. This rhythm also helps product teams identify customer needs, build the right solution, and find the right business model to deliver value.

In contrast, large organizations have a different rhythm based on executing the current business model. This rhythm is often the antithesis of the innovator’s rhythm—long budget cycles, 30-page business cases, and incentives based on revenue growth.

This mismatch is problematic for grassroots movements. As much as innovators try to do their work, they are often stifled by the management processes in their company. Paradoxically, the same leaders that sent the team out for Lean Startup training find themselves telling that same team to “stop experimenting and write a business case.”

Building organization capabilities

Lean Startup training is not enough. In order for these practices to thrive in large companies, we have to transform the rhythm of our management systems to match the rhythm of innovators.

A bad organizational system will beat a well-trained human being everyday.

Clayton Christensen, the author of The Innovator’s Dilemma, is right; organizational capabilities trump human capabilities. A bad organizational system will beat a well-trained human being everyday.

Due to the historical success of current management tools, they are embedded in corporate cultures as the default when leaders want to make decisions. However, these tools are not appropriate for managing innovation.

For example, if we look at the formula for calculating ROI, we can see the problem. To calculate ROI, you need data on the total revenue the product will make and the total costs of creating the product. For transformational innovation, the honest answer to these questions is “We don’t know.” But if our leaders require these numbers in order to make decisions, then product teams are going to make them up.

New management tools

The pace of change in the current business environment does not suit the management tools we are currently using. If innovation is now required as a part of doing business, what we need are new tools to manage the process.

Within the Lean Startup movement, we have a great toolbox for innovators to use in their work including business model canvases and experiment boards. What we need to work on now are tools for the leaders who manage innovators. If we give our innovation teams the best contemporary tools to create breakthrough products, we shouldn’t leave our leaders to manage innovation using their traditional management tools.

Conclusion