Lean Start-up can work wonderfully inside large corporates, but the work is on the back-end alignment with Stage-Gate and making them hum together.
My team’s challenge had little to do with process implementation- that’s just where we ended up.
Back in 2011, I was tasked with how to find white space inside a mature category (as a new entrant without expending great amounts of capital given the level of uncertainty). In other words – find opportunities that established organisations had overlooked despite spending millions or research dollars in categories they well and truly ‘owned’. We identified by trial and error that the core project management process the organisation operated (Stage-Gate) would be unlikely to add value to the brief, so we’d need to find a new development process as well as crack the opportunity identification challenge.
We knew the organisation would be reluctant to enter new markets (if that’s where the opportunity lay) without real evidence – and moreover – they’d be unlikely to burn time and resources to any great extent to help us figure it out. A traditional approach would have required research money and internal resource distraction to building a business case that may not get company support anyway.
Instead, we used a lean innovation approach. We broke the venture down into shorter cycles requiring less capital at each phase and required us to share our progress prior to any more capital being deployed. Broadly, a Lean Start-up type ‘build measure learn’ process, with a venture capital type funding model. With that in place, the business was able to invest gradually as they became more confident with the progress without committing upfront. It reduced the uncertainties and assumptions being made (given the market was more foreign to the organisation) by forcing experimentation and validation along the way, versus a hypothesised business case.
For a fraction of the cost of a core venture, we received funding and support to launch. However, given it was the ‘first time around’ with such a new process, the organisation fell back to the safety of what it knew, and ran the venture idea through a volumetric Nielsen Bases 2 test. The idea tested in the top 10% of global beverages, despite such a small development cost. 10 years later it’s still in the market and highly successful.
Key lesson/principal learned: Work with your internal processes- without them corporate governance becomes problematic. However, you must challenge your processes when satisfaction of them will result in poorer outcomes – which ultimately create more organisational risk.
[‘Experience’ blogs are reflections and learning experiences from Radiocarbon consultants from their time on the client-side]