Unlocking Innovation in Global Corporations, June 2017
How_to_Run_Your_Enterprise_Like_a_Lean_Startup
1. How To Run Your Enterprise
Like a Lean Startup
Interviews with:
ENTERPRISE
2. AUTHORS
HourlyNerd
Cynthia Hollen
INTERVIEWS
Dr. Shawn Davis, Principal Engineer of Device Strategy, Amgen
Elise Kissling, Director of Creator Space™, BASF
Dyan Finkhousen, Director of Open Innovation & Advanced Manufacturing, General Electric
Alex Chriss, Vice President and General Manager, Intuit
CONTACT
HourlyNerd
280 Summer St
Boston, MA 02210
(617) 446-3734
Info@HourlyNerd.com
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
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3. A Word From The CEO
Every large company was once a startup. But as these companies grow,
they often lose the entrepreneurial spirit that made them what they were.
As a large enterprise, they can become process-driven, slow moving,
and risk-averse, leaving them vulnerable to younger, faster moving
competition. But this does not have to be the case.
We believe that the characteristics of a startup, e.g. flexibility, innovation,
lean processes, etc., can and should scale along with the business.
Here at HourlyNerd, we’ve had the honor of working with thousands of
companies, including many Fortune 1000s, to help them bring flexibility
and innovation into their businesses.
With these learnings in hand, and leveraging interviews with companies
like GE, Intuit, Amgen, and BASF, we have written a white paper to outline
the best practices that we’ve seen for how even the largest of enterprises
can run like lean startups.
Regards,
Rob
About HourlyNerd:
Leaders at companies of all sizes have long sought a solution for meeting
critical ad-hoc needs for experienced business expertise. HourlyNerd
offers the leading technology platform connecting elite business talent to
enterprises to tackle projects flexibly, quickly and efficiently. HourlyNerd
has built a global market for on-demand expertise and developed best-in-
class software tools for engaging and managing this market.
HourlyNerd’s innovative human capital solution connects business
leaders with nearly 20,000 boutique consulting firms, custom teams, and
independent experts for project-based work. Today, HourlyNerd serves
thousands of clients, including Fortune 1000 companies like GE, Staples,
and Microsoft, as well as countless others on a confidential basis.
Learn more at enterprise.hourlynerd.com
Rob Biederman
CEO, HourlyNerd
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
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6. What does every single large company have in common? It was once a startup. Where along the way does the entrepreneurial,
risk-tolerant spirit give way to the inertia and risk-aversion often observed at established companies? And why does it matter?
Over the last 20 years, enterprises have learned to look differently at smaller, younger companies. The once undisputed
“benefits” of scope, scale, and history are now often dismissed, or worse, disrupted, by newer entrants. These agile upstarts
are unencumbered by balancing conglomerates of products, maintaining economies of scale, and managing carefully crafted
hierarchies.
Successful lean startups famously outperform their older, heavier competition in everything from customer adoption to
speed-to-market. From Netflix versus Blockbuster to Amazon versus Barnes & Noble to Uber versus yellow cabs, examples
of innovative business models toppling the corporate giants have become both commonplace and revolutionary in our lives.
Across the board, enterprises are recognizing that they need to change or get beaten by leaner, faster competitors. As a
result, many are introducing some form of lean management, “intrepreneurial” incubating, or other creative approaches in
order to insert a startup mentality into their enterprise.
Separating Lean from Startup
Simply being a startup does not ensure success. In fact, 80 to 90% of startups fail, and very few become shining stars.1
Therefore,
the goal is not to mimic startups. Instead, enterprises should take lessons from successful startups and the elements that led
them to win, while continuing to leverage the big corporate advantages that got these enterprises to where they are today.
Why Enterprises Should
Emulate Lean Startups
“Across the board, enterprises are recognizing that they need to change or they will get beaten by leaner, faster competitors.”
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
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Revsin, Yan. “The Major Reasons Startups Fail - And How You Can Avoid Them”, Forbes.com March 5, 2015.
7. How can Big Be Lean?
Several key factors keep enterprises from naturally being lean. In interviews with startup veterans, “intrapreneurial” managers,
and corporate executives seeking leaner outcomes, the most common corporate obstacles are culture and process. Cultural
obstacles include the common behaviors, ingrained beliefs, and shared history that drive a firm-wide mentality about how
things get done. Process obstacles are the documented, legal, and operational procedures that create stability and reduce
risks, but also block change and innovation.
Lean managers and employees, on the other hand, think differently and are measured differently. They speak differently. And
they make decisions very differently.
The mindset difference is fundamental: even the language that executives use to describe their teams, challenges, and
achievements clearly illustrate the barriers enterprises face in becoming lean.
In BCG’s 2015 Global Innovation Study, 1,500 enterprise executives tasked with improving innovation and product development
noted their biggest obstacles to success included slow processes, difficulty finding and selecting ideas, improper incentives,
and leadership and culture issues.2
These obstacles are common amongst large enterprises that struggle to be lean.
Recognizing obstacles to efficiency and innovation is critical. But for an enterprise to adopt lean practices, it first must
understand what startup qualities to copy, what to ignore, and what to adapt to fit.
Amgen is one global company tackling these obstacles head on with deliberate and bold steps. The world’s largest independent
biotech company is proving that it can successfully leverage the scope and scale of a multi-billion dollar enterprise with the
agile mindset of a lean team.
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
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Global Innovation Study. Rep. N.p.: Boston Consulting Group, 2015. Print.
8. Amgen is a $115 billion, 35 year-old, publically traded
biotech company that sells some of the world’s most
successful drugs and therapeutic biologicals.
And it wants to be lean.
Three years ago, Amgen created the Advanced Device
Technology team with a mandate to leverage lean
principles in order to understand its portfolio and
drug delivery needs, and to match those needs to
technologies best suited to drive value for Amgen as a
whole.
Amgen’s Dr. Shawn Davis, Principal Engineer of Device
Strategy, calls the skills and thought processes this eight-
person team is injecting a “startup bias.” With this new
approach to product innovation and device strategy, the
team is focused on what is good for the customer and
for the company overall, not just what is good for each
product.
Ruthless Priorities
According to Davis, a startup veteran, many large
biotech companies fund investments on a product-by-
product basis, which distorts the focus on the core goals
of the broader company. “When each team is focused
on the time cycles and investments required for their
own product, they can’t see the trade-offs of company
resources against other opportunities, so they are not
maximizing the whole company’s value.”3
According to Davis, Amgen’s Advanced Device
Technology team is inserting the “ruthless priorities” of
a startup into its efforts, with a focus on critical items for
the company overall and a tighter runway to profitably
deliver more effective products to customers.
“There is a sunk cost fallacy in large companies,” says
Davis, explaining that companies continue to invest
more time and money into projects, simply because
they have already invested a lot of time and money
into that project. Lean companies, on the other hand,
look at the resources needed for every effort underway,
and objectively decide if each project is the best use of
company resources in the long run. With a focus on the
big picture investment, timeline, and outcome factors,
Amgen can determine the best overall portfolio, and the
best use of resources.
Lean companies make tradeoffs each day in an effort
to maximize total company value. If large enterprises
can bring that kind of clarity and discipline to their own
decision making processes, they can realize the same
benefits.
A Lean Bias Frame – Changing
Your Approach to Risk
One of the greatest challenges the Amgen team faces in
driving innovative thinking is changing risk biases.
“In a big company, if you take a risk that makes the
company a billion dollars, you get a pat on the back
and a promotion. If you take a sound risk that costs the
company a billion dollars, you expect to be fired,” says
Davis. In theory, he explains, the company benefits by
taking balanced risks to improve the overall portfolio of
results, but individuals generally don’t feel safe taking
risks that could threaten their job security.
There are two ways to tackle this hurdle, and Amgen is
pursuing both. The first is to hire people with a greater
risk-taking profile, as they have with this new team.
The second is to make risk-taking more celebrated
and rewarded. The Advanced Device Technology team
serves as a role model within Amgen, as a way to create
a safer, more encouraging workplace where budding
entrepreneurs and risk-takers feel welcome. Davis admits
that changing a company’s risk biases is extremely hard,
and that it is critical for management to back up the shift
with follow-though and support for this to happen.
Case: Amgen’s Device Strategy Group –
Changing Culture and Process from Inside
“The team is leveraging agile startup lessons to shift its focus to the customer and company, which is driving better
results for the enterprise.”
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
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“Run Like a Lean Startup Amgen.” Telephone interview with HourlyNerd. 11 Dec. 2015.
9. Outside of their own mandate, Davis’s team is also
working with groups across Amgen to encourage them
to ask questions differently. They’re working specifically
with mid-level managers and product teams throughout
the organization to reframe questions to focus on
accomplishing goals, rather than avoiding risk.
When evaluating a new filled injectable device opportunity,
for instance, they focus on asking questions like “How can
we do this?” and “What if we try this?”, rather than the
more typical enterprise bias that starts with “Why shouldn’t
we do this?”
While it is too early to show measurable results, Davis can
already point to products that have been initiated, funding
that has been cut back, and innovations that have resulted
from looking at company challenges through a lean bias
decision frame.
Importing Lean Thinking
In an industry-wide push to realize greater innovation, most
biotech companies have created “Innovation Centers”
or outsourced the role to partners. This runs the risk of
essentially exporting innovation and lean thinking to areas
outside the core company. According to Davis, Amgen
is acutely aware of this risk and is actively focused on
fostering innovation throughout the organization.
They deliberately chose to bring an “insurgency” of startup
veterans and project team members into the organization
to shift the culture from the inside, as evidenced by the
new Advanced Device Technology team. In addition to
great scientific and technical skills, “the social skills to carry
the message that risk-taking is acceptable and that excuses
get in the way of innovation, throughout the company,” has
been a key hiring criterion for this “lean bias” team.
Though only three years old, the Advanced Device
Technology team is leveraging lean thinking to make
decisions that are directly impacting the company’s core
products and markets. The team is leveraging agile startup
lessons to shift its focus to the customer and company,
which is driving better results for the enterprise.
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
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11. The key behaviors that enterprises must learn: be focused on
core targets, flexible enough to learn and innovate, and fast
enough to capture markets.
Every story of lean startup success highlights the moment
when one of these key traits led to the breakthrough that
created a phenomenon.
The following three examples are from well-respected large
enterprises that are embracing lessons from lean startups
and finding compelling ways to adapt them into their own
corporate culture.
Focused
A lean startup’s success often comes from being close enough
to the customer to listen. At a small company, executives
are naturally closer to the end user. It is not uncommon, for
example, to have the CEO be the lead on a customer call.
The startup’s survival hangs on the reactions of each and every
customer, so they share, celebrate, fret and discuss customer
feedback in detail across every function of the company.
Customer feedback is equally important at a large enterprise,
but harder to come by. Scott Cook, co-founder of Intuit,
explains that the biggest problem enterprise CEOs have
is that “no one, inside or outside your company, tells you
what you really need to know.”4
Customer feedback gets
massaged to look good, and managers soften bad news and
emphasize good news. It is simply harder for decision makers
at enterprises to hear the real feedback that can lead to the
next breakthrough.
Learning from customers is a key focus area for chemicals
giant BASF. To get close to as many customers as possible, the
113,000 employee company did something really remarkable.
And they did it in a way that only a global enterprise could.
Focused. Flexible. Fast.
“The following three examples are from well-respected large enterprises that are embracing lessons from lean startups and finding
compelling ways to adapt them into their own corporate culture.”
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
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“Through co-creation, the
company connects people and
ideas around the globe with the
aim of jointly developing new
solutions to global challenges.”
4
“Startup Grind - S Cook.” Interview by Rich Foreman. 2015.
12. Some enterprises try to act lean, and some try to buy or
outsource lean. In contrast, BASF is using big to be lean.
Their BASF Creator Space™ approach is a brilliant use
of big company resources leveraged to mine and nurture
new ideas, and it is letting BASF break through all of the
traditional barriers that stop enterprises from hearing what
is going on around them.
To celebrate 150 years of making chemicals for every
imaginable use around the world, BASF did something
truly innovative. This $82 billion giant launched the BASF
Creator Space™, a program in which employees from
across regions, divisions and research platforms worked
with customers, scientists, thought leaders, institutions,
students and communities to understand why some of
the world’s biggest problems around food, energy and
urbanization aren’t being solved.
And then they listened.
Innovation from the outside in, on a global scale, using
the best thinkers in the world, is something only a large
enterprise can do. And it is the epitome of employing
“lean innovation” inside an enterprise to identify, test, and
develop big solutions to big problems.
According to Elise Kissling, Director of Creator Space™,
BASF is re-thinking what it means to be innovative, and
looking at not only chemical innovations, but at market
driven innovations to address societal needs and pain
points.5
As the world’s leading chemical company, BASF is far
up the value chain from the end consumer, as it supplies
chemicals and materials to the manufacturers who, in turn,
make the products that consumers buy. Therefore, in order
to get closer to the end users of its products and systems,
BASF devised a yearlong “open innovation” program to
better understand what consumers, value chain players,
governments, and other end users of its products are
frustrated about.
“We have thousands of top researchers inside BASF, and
we are great at innovation inside the company and with
leading universities and institutes,” says Kissling, “but with
our new strategy we wanted to move in the direction of
open innovation and co-creation in order to innovate in
ways that are more relevant to our target groups. And to
be faster!”
Described by Kissling, ‘open innovation’ is the process
by which a company brings outside ideas and thinking
into its own innovation process by inviting collaboration,
crowdsourcing or teaming with partners to form joint
innovations. “Co-creation is a method you use to get there,
especially in face-to-face interactions,” explains Kissling.
So the company looked to lean startups for inspiration.
They developed a vast and global “open innovation”
project to meet, listen to, learn from, and collaborate with
partners and end users. “We knew that co-creation and
open innovation were very popular in the B2C space,” says
Kissling, “so we thought it would be great to adapt those
methods and approaches for our B2B environment.”
And BASF reinvented “startup open innovation” to
meet the needs of the global enterprise, using all of its
innovation credibility, local market expertise, corporate
event management teams and substantial resources,
to conduct a CEO-mandated, yearlong “experiment”
into new learning methods. It was critical, according to
Kissling, that CEO Kurt Bock frame the project as one of
experimentation and learning so that the entire team felt
the freedom to takes risks and be receptive to new ideas.
Even some co-creation skeptics were won over after having
the opportunity to be part of successful collaboration, in
person.
BASF’s Creator Space™ was broken down into around
50 co-creation activities run by people from across the
Case: BASF’s Creator Space™ – Innovation
Through Co-Creation
“Open innovation is the process by which companies bring outside ideas and thinking into its own innovation process by inviting
collaboration, crowdsourcing or teams to form joint innovations.”
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
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“Run Like a Lean Startup BASF.” Telephone interview with HourlyNerd. 1 Feb. 2016.
13. company’s divisions and functions. Local thought leaders
and value chain partners tackled local challenges in
six regional tours. Taking their cut from best practices
inside and outside of the company, the Creator Space™
team tailored eight co-creation methods to BASF’s B2B
environment and piloted these methods in 2015.
From that work, more than 60 non-routine project
proposals are now being evaluated by BASF, and many
others are already being implemented by the business
units.
At the New York regional tour, for instance, dozens
of outside contributors (designers, urban planners,
developers, construction industry customers, etc.) focused
on the flooding caused by Hurricane Sandy and came
up with three completely different approaches for how
to protect future cities from rising sea levels. These
approaches now form a foundation for product and
business model innovation at BASF from flood barriers to
redesigned city blocks.
At the agriculture division, a new business model idea
that bundles products and services with risk management
components was developed. To see if the new offering
was viable, rather than taking several years to polish it and
create all new marketing material, a few innovative sales
people piloted the offering with 15 customers to test it
before rolling it out more broadly.
The project team had weekly meetings directly with sales
people and customers to see what was working and what
was not, and the prototype was modified based on the
feedback. Both the final offering as well as the target
customer segments changed dramatically during the lean
startup phase.
“This is a new approach for BASF,” says Kissling. In
addition to sourcing innovative ideas from outside the
company in order to stay close to the customer, BASF is
“using Lean Innovation methods that startups use to do
prototyping and piloting so teams can learn on fly before
we go into full scale roll-out. The feedback on the ground
is that we haven’t invested that much because we piloted
with a few customers and we now have a much better
product than we would have if we had used the process we
normally do.”
By looking to lean startups, BASF is attempting to
accelerate growth with new products, businesses and
partnership models. Getting there requires a top-down and
a bottoms-up focus on real customers, real problems and
real pain points. In one year, BASF has made major strides
in learning how it wants to approach its next 150 years of
innovation.
But being focused on the consumer is not always enough.
In an ever changing world, being flexible and able to
react to new learnings is often the factor that determines
success.
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
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14. Case: Intuit’s Continuous Product Evolution
– Savor Surprises
Scott Cook’s mantra, “Don’t listen to what customers say, listen to what they do,” created yet another major pivot point for the
enterprise in 2009, after watching smart phone financial management demand erupt.
Flexible
“The pivot” is one of the most touted talents of the successful
startup. The ability to see that something is not working, or
that a new opportunity has arisen, and then have the entire
organization react, instantly, to capitalize on this new learning
requires both dexterity and courage.
Over and over, large enterprises find that their financial and
cultural investments in the status quo make seeing a new
problem or opportunity very difficult. Reacting is even harder.
More than 30 years ago, Intuit was the lean startup that
everyone envied, and they have not forgotten that their
focus on customers and their ability to react to feedback
quickly are the reasons that most of their top products were
conceived. Now, as a large enterprise, they have had to
learn new ways to grow, but they have not lost sight of how
crucial it is to stay focused and flexible.
Intuit famously started in 1983 with two guys in room in Palo
Alto. Fast forward three decades and they are a $4.2 billion
annual revenue, 7700 employee market leader in personal and
small business financial software. And Intuit’s co-founder, Scott
Cook, works hard every day to make sure that the company
continues to heed the lessons they learned as a lean startup.
Savor Surprises
An early breakthrough for Intuit came by focusing intently
on surveys of Quicken users and then reacting quickly to
capitalize on their learnings.
Quicken was developed as a tool for personal finance, so
Intuit was surprised to find that customer surveys regularly
mentioned Quicken issues at work. In the 1980s, many people
only had computers at work, so the team assumed workers
were using Quicken on offices computers for personal tasks.
They probed further. To their surprise, business managers,
owners and assistants were repurposing Quicken into a business
finance tool. There were plenty of business accounting tools on
the market at the time, so the team had never even considered
that market opportunity.
The breakthrough insight that revolutionized Intuit was that
non-accountants at companies were suddenly able to take on
bookkeeping and “accounting” roles because Quicken did
not require an understanding of debits and credits and journal
entries, like all other “accounting systems” on the market.
Case Study:
Leveraging
HourlyNerd to be
Consumer Focused
Collecting customer data
is widely accepted as a
best practice to validate
hypotheses and guide go-to-
market strategies. However,
the process is typically time
consuming and expensive.
In an effort to better
understand the Canadian
artisanal food consumer
quickly and efficiently, without
sacrificing quality, a Fortune
500 CPG company turned to
HourlyNerd.
Understanding the attitudes,
values and beliefs of this
market required someone
who not only lived in Canada,
but who was also a market
research expert that had
navigated this field before.
HourlyNerd consultant,
Anshul A., tapped into his
network and hired three
additional researchers to
conduct interviews and
to administer surveys to
respondents in Toronto,
Vancouver, and Montréal.
In just two weeks,
Anshul presented his
research, findings, and
recommendations. His team’s
work provided a third party
assessment that validated the
client’s hypothesis, shed light
on consumption patterns by
city, and assisted in their go-
to-market strategy, ultimately
refining the company’s launch
budget.
In conclusion, staying
‘Focused’ and close to the
consumer doesn’t need to be
a drain on resources. Rather,
by leveraging platforms like
HourlyNerd, enterprises can
conduct consumer research in
an effective and cost efficient
manner, helping them to stay
lean.
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
14
15. The entire team recognized this new market opportunity,
shifted to embrace small businesses, and rapidly created a
new product for them. QuickBooks was released the next
year and outsold the market leader within two months. It
quickly grew to an authoritative 94% market share for small
business accounting.
Intuit continued working closely with customers and
tweaking its direction based on what it heard. Intuit’s tax
programs followed a similar path of opportunity, arising
from dissecting surprising behavior when they watched
customers struggle with receipt data entry and realized
that Intuit could make tax preparation easier. It pioneered
OCR receipt entry, bought a tax software company, and
transformed the personal tax space.
Experimentation
Today, Cook’s chief role is to work closely with a pool of
in-house startups, and to mentor and manage these small
businesses. He insists that the startups, and Intuit itself,
continue to focus on listening, experimenting, and pivoting
to seize opportunities.
His mantra, “Don’t listen to what customers say, listen
to what they do”, created yet another major pivot point
for the enterprise in 2009, after watching smart phone
financial management demand erupt. Instead of asking
customers what changes they needed, they went out and
watched what new startups who were inventing their own
mobile and social financial solutions were actually doing.
Intuit quickly understood the new need driving customer
defections to mobile financial solutions, and in 2009, Intuit
bought Mint.
Cook was so impressed with the Mint solution, and the
Mint team, that he took the Mint management team and
put it on top of the Quicken team. “We wanted to Mintify
the whole company”, he said.
In the past year, all of Intuit’s products, including
QuickBooks, have undergone a major transformation to
online and mobile interfaces and business models.
Intuit is so passionate about the need to be flexible and
innovative that it has created an entire toolkit of resources
for its small business clients to help them understand
customer behaviors, imagine new opportunities, and
monetize new product visions.
And Intuit walks the talk. For 30 years, every major new
product has been the result of quickly adapting the
company to meet new business opportunities.
In a world where software is rolled out to customers daily,
and dominant businesses are disrupted overnight, Intuit
has remained not only focused and flexible, but also fast as
solutions companies need to be in an app driven market.
Fast
There are thousands of innovators with unprecedented
access to cheap development tools and investment capital
looking to capitalize on unmet needs. They can move from
an idea to a delivered product in just months. Typical new
product development time, from concept to delivery, in
a large company, on the other hand, is often measured
in years. As a result, successful lean startups are able to
exploit the slower, steadier pace of the bigger players and
beat them to market.
But when big companies get creative, the strengths of the
enterprise combined with the speed of a lean team can
achieve enviable results.
Case: Intuit Part 2,
Creating Space for
Intrapreneurs to
Disrupt
“Intuit is breaking down walls to allow their employees to
be flexible, to innovate to cut failing products, and to deliver
profitable solutions that meet current market demands.”
The QuickBooks Self-Employed (QBSE) product, conceived
and launched all in 2014, is the story of successfully
combining the best of lean startups and deep corporate
advantages.
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
15
16. In 2013, another “surprise” Intuit customer behavior
appeared. This time in the simple mobile personal finance
app, Mint. Thousands of users were marking a majority
of their expenses as “OTHER”, instead of using the many
personal tracking categories available. By asking “why”,
Intuit learned that self-employed contractors were using
Mint’s “OTHER” to track business expenses. They were
creating a big digital shoe box of “other” receipts that still
needed to be sorted and re-categorized for taxes, but, at
least, were now captured.6
This fast growing self-employed market need was a big
gap in the Intuit product portfolio, between the new
Mint mobile personal app, and the entry-level version of
QuickBooks. The Intuit team looked at two options. They
could pull a great cross-functional team together to create
a new product to launch in 2016, or they could create a real
startup inside Intuit. They chose the startup mode, with a
few luxuries that only a large enterprise could provide. But
they were careful to strip away the weight, obstacles and
handicaps that usually come with the enterprise.
A key challenge was finding people who were comfortable
with risk, uncertainty, and speed. In any large organization,
there is a bias towards existing products and existing
methods. But, rather than hire “startup people” from
outside, Intuit created the space for entrepreneurs who
already worked at Intuit to emerge.
To find these entrepreneurial-minded people, they cast a
wide net. “We started very broad and said, look anyone
who wants to come do this, can come do this”, explains
Alex Chriss, now VP & GM of the Self-Employed Solutions
business unit of Intuit’s Small Business Division. They
ended up with twenty teams of three to five engineers,
product managers and marketers who were set to compete
against each other in a six-week marathon.
Every team had access to the same research, customers,
corporate code bases and tools, and each presented
ongoing ideas and learnings to an executive selection
team. Five of the original twenty teams were then tapped
to move forward to refine their QBSE product ideas, and,
after two more months, one team was assembled with the
best ideas and team members from the whole innovation
exploration.
While the competition was originally intended to discover
new product ideas, perhaps the greater takeaway was that
the executive team leared a lot about the “lean” thinking
capabilities of various individuals in the competition.
Chriss explains, “There were some interesting ideas that
came out of the competition, but it really highlighted the
people that really wanted to do this and had the chops and
the excitement.”
Small Company Drivers
Once assembled, the bar for the new QBSE team was
high. They had a short, three-month runway to get a viable
product into the hands of customers. Chriss drove the team
to deliver a minimum viable product that customers would
value enough to pay for, not just use.
Twelve weeks later, the first version of QBSE was in the
hands of test users. Consumer feedback was rapid, thanks
to the tools the team had carefully integrated. The QBSE
team took all user calls, emails, and questions, just like any
startup would. Feedback went directly to the entire team,
from the leader to the programmers. With this intimate
focus on listening to consumers, the flexibility to innovate
new solutions, and the drive to deliver results quickly,
the team was able to iterate rapidly. As a result, over
several months, multiple software updates were released,
sometimes twice a day.
At one point, a key hurdle to customer conversion
emerged – actually paying for the product. Just like what
you would find in a startup - but is unheard of in a large
company - engineers and team members bootstrapped a
solution for their hundreds of customers. They manually
updated customers’ data for them, so that the customer
immediately saw the reports and functions they needed to
convince them to buy the software. Instead of first building
specifications, coding a solution, and releasing a new
module, the team accomplished what needed to be done
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
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6
“Run Like a Lean Startup Intuit.” Telephone interview with HourlyNerd. 4 Jan. 2016.
17. by brute force, the same day. The fully integrated solution
was delivered in week.
This rapid, intimate innovation would never have
been possible following standard corporate product
development cycles. The QBSE team had critical
advantages of a lean startup that few corporate product
development teams share:
1. Direct, constant, team-wide communication with customers.
2. A very short runway to deliver a revenue generating product.
3. Freedom to bootstrap solutions, measurement tools, and anything
else the product needed to stay alive.
Big Company Ecosystem
Advantage
At the same time, the QBSE team had the critical
advantages of a large enterprise with a strong customer
and product ecosystem that few lean startups share:
1. A pool of 8,000 employees from which to pluck the best team.
2. Capital to pay salaries and rent during the runway (e.g. loss-
making) period.
3. A vast code base to leverage as needed.
4. Existing integrations and relationships with almost every bank and
credit card company.
5. A brand name and ready customer base from which to solicit new
users.
6. An established product distribution channel.
7. A ready investor to take and grow the product as soon as it was
proven.
Leveraging these enterprise benefits is critical, says Chriss.
To effectively incubate a startup within an enterprise, it
is important for the enterprise to “give the team enough
space and enough autonomy to move as quickly as they
can. But then, when that time is right, lean in with the
resources and the advantatges that the company has and
allow the startup to truly accelerate.”
By September, the “bootstrapped” QBSE product,
resulting from a productive marriage between startup and
corporation, was a success. Customers were signing up,
importing their data, and paying the $9.99 monthly fee.
Shortly after launch, the team realized that these same
customers were going to take all of this organized data
to a tax accountant in just four months. So, in September
2014, the QBSE team met with the Turbo Tax team to ask
if they could work together to build a Turbo Tax integration
product for QBSE that could be delivered by December of
that year.
The QBSE team leveraged everything it learned about
how to be focused, flexible and fast, and brought those
learnings to an entirely new team at Intuit. The two teams
released an integrated tax package in just four months.
With strong corporate support, clear mandates on
customer benefit targets, and a single-minded drive to
deliver, a $4 billion enterprise launched a totally new
product to a new customer base in twelve months.
From pharmaceuticals to software, sophisticated
enterprises are learning that they need to leverage their
size and muscle strategically, and to get lean where it
counts.
They are getting out of their own way and finding
concentrated ways to really focus on what customers and
new markets are telling them. They are breaking down
walls to allow their employees to be flexible, to innovate to
cut failing products, and to deliver profitable solutions that
meet current market demands. And they are unleashing
the power of teams, but stripping away the corporate
distractions that cause tasks, projects and new business
units to struggle under the typical demands of being a
member of a large enterprise.
Other enterprises are embracing the projects as a
surgical approach to getting focused, flexible, and fast,
all across the company, very quickly. At GE, employees
are encouraged to leverage internal and external
entrepreneurs, specialists, and fast pop-up teams to deliver
on anything they need. This is the rise of the freelance
economy, leveraged to maximum benefit, to keep the
biggest of the big, fast, agile, and innovative.
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
17
“Give the team enough space and
enough autonomy to move as quickly
as they can. But then, when the time is
right, lean in with the resources and the
advantages that the company has and
allow the startup to truly accelerate.”
19. HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
19
Digital Industrial giant GE believes in innovation and has
celebrated a successful innovation legacy for 130 years. In
the last decade that belief was expanded even further, as
GE resolved to tap into “The Global Brain”—moving to
open its R&D environment to connect and collaborate with
entrepreneurs outside the company to create new intellectual
property, value and inventions.
Dyan Finkhousen heads the GE GENIUSLINKTM
team,
responsible for Open Innovation, Collaborative Innovation
and Crowdsourcing, as part of GE Global Operations -
Commercial (GE’s Shared Services organization). Since 2013, the
GENIUSLINKTM
team has been enabling internal GE employees
to quickly and effectively connect with internal and external
expertise. The team has established partnerships with various
talent marketplaces and crowdsourcing platforms to connect
them with GE teams to invent, analyze and implement new
solutions.
“A given GE stakeholder may not have the right resource, or
the time, to solve a problem they’re facing,” says Finkhousen,
“or they may just want an outside perspective to view the
problem from a different angle.”7
“It is impossible for anyone in the organization to have all of the
best ideas, so we’re leveraging open innovation, collaborative
innovation and crowdsourcing to collaborate with experts and
entrepreneurs everywhere who share our passion for solving
some of the world’s most pressing issues.”
Case: GE Tapping Into the Global Brain
“The team has established partnerships with various talent marketplaces and crowdsourcing platforms to connect them with GE
teams to invent, analyze and implement new solutions.”
Innovative Projects
Many enterprises who aspire to run with the speed and agility of a startup are focusing more granularly, driving efficiency
and innovation with new approaches at the project-level.
Namely, enterprises like GE are tapping into “The Global Brain”, internal and external experts and entrepreneurs from around
the world, to help them become more focused, flexible, and fast. Leveraging technology, an enterprise manager who wants
additional or new innovative ideas, different perspectives, or outside resources can mobilize these ideas in a matter of hours.
By leveraging external partners offering various levels of expertise and capacity—from technology through HourlyNerd (where
enterprises can access on-demand business expertise for project-based work) to micro-tasking with Fiverr and Mechanical
Turk (where armies of workers can be hired to do any anything from data entry to logo design)—a traditional team, armed
with a small budget and objective, can solve challenges quickly and effectively.
GE has been at the forefront of the this movement, and is learning that by leveraging this “Global Brain”, they are able to
achieve solutions faster and with additional customer feedback.
In the last year alone, the GENIUSLINKTM
team has
helped GE teams improve the speed, cost, and quality of
hundreds of projects across the company. Within these
projects, they improved product development speed and
cost by up to 40-50% and improved the speed and cost of
market insights by up to 40-80% across the projects they
have sourced and managed.
7
“Run Like a Lean Startup GE.” Telephone interview with HourlyNerd. 13 Jan. 2016.
20. With partners like Kaggle - a data science and machine
learning specialist network, and HourlyNerd - a marketplace
for business expertise, the people across every business
unit at GE now have quick and seamless access to an
expansive and impressive network of talent. “With Kaggle,”
says Finkhousen, “we’re able to tap into industrial internet
expertise that can exponentially improve the solution sets
we can make available.”
HourlyNerd “has curated a community of consulting
and business experts that provide access to on-demand
expertise to solve for a very diverse range of business
priorities, including planning, strategy, process optimization
and more.” In 2015, having completed several HourlyNerd
projects, and understanding the potential for enterprise-
wide impact both at GE and at other companies, GE
Ventures made an investment in HourlyNerd, further
solidifying the partnership.
The GENIUSLINKTM
program began several years ago with
corporate sponsorship to experiment with the right way
to bring outside resources in. Working with early adopter
“clients” inside GE, the GENIUSLINKTM
team has built a
portfolio of case studies and a track record for success—
leading to GE’s decision to make access to outside support
available to everyone.
In fact, in the last year alone, the GENIUSLINKTM
team has
helped GE teams improve the speed, cost, and quality of
hundreds of projects across the company. Within these
projects, they improved product development speed and
cost by up to 40-50% and improved the speed and cost of
market insights by up to 40-80% across the projects they
have sourced and managed.
The program has been so successful that GE is now
opening the service up to GE’s own clients.
GE is taking advantage of rapidly evolving business models
and technology to rethink how it can operate with better
speed and innovate more effectively. This means changing
the way they manage projects and product development
internally--and also how they engage with the world to be
focused, flexible and fast.
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
20
Conclusion
Amgen, BASF, Intuit and GE are all companies that have recognized an opportunity to be more successful, more profitable,
and more relevant by leveraging lessons from lean startups.
Amgen brought in a team with a “lean bias” to re-orient the company’s focus to end results. BASF is using its breadth and
network to foster new ideas and innovation from its extended community. Intuit is harnessing its startup roots to remind its
team that “surprises” create opportunities, and then giving them the space to create. And GE is focused on leveraging “The
Global Brain” to get projects done quickly and effectively.
Each company took a very different approach, but all four are proving that the benefits inherent to a large enterprise, paired
with the focused, flexible, and fast capabilities of a lean startup, can lead to dramatic results for the company as a whole.
