A couple of members of our firm, Strategy 2 Market, attended the annual Lean Startup conference in San Francisco last week (See Additional Info at the bottom of this post for an explanation of the Lean Startup movement.)
One of the speakers, Cory Nelson of GE, estimated only 15-20% of all employees across the company understand the core elements of Lean Startup: the need for identifying assumptions and running experiments to test assumptions. GE has trained thousands of people across the company in many different functions through their version of the Lean Startup, coined the Fast Works program.
Strategy 2 Market has found that the use of assumption identification and experimentation is highly variable for product development personnel in established companies, and it is very dependent upon the sophistication of the organization and the employees. It is difficult for employees to switch course especially when they are comfortable with a more traditional and structured process like the phased-and-gated process.
Level of sophistication is captured best with a concept borrowed from the agile world on the 3 levels of employee mastery:
• Level 1 (doing): Needs a process to follow, may be new to the discipline or position
• Level 2 (understanding): Open to the possibility of alternative processes, but still likes a defined process to fall back on
• Level 3 (fluent): Able and willing to adjust and improvise without a specified set of process activities
Based on this framework, established companies wishing to adopt some of these Lean Startup principles need to have a stable base of level 3 employees able to embrace new concepts, supplemented with level 2 and 1 employees.
With that being said, does that mean that most companies only have 15-20% of their product development employees in Level 2 and Level 3 of mastery? GE is only one data point, but with the constant turnover we see in most organizations I guess this may ring true, especially within the marketing and product management function. How to overcome this turnover within these roles is a different article.
If you’re not familiar with the Lean Startup conference, it grew out of the entrepreneurial internet-based software community, in particular startups looking for venture capital backing. This approach throws out the traditional business plan and focuses on finding product-market fit (the biggest risk for a startup) and creating a working business model through experimentation. A core concept is identifying and resolving assumptions and risks through fast iteration and feedback.
The Lean Startup approach has been fine-tuned for internet-based startups and has delivered impressive results, in part because the tools and techniques rely on an entrepreneurial company culture, software for fast and early adopter customer behaviors. There is a movement dubbed Lean Enterprise, endeavoring to transfer Lean Startup directly into established companies. The obstacle is that product development in established companies must work within product, market and business model constraints. Some members of the community believe that large companies need to surrender their existing organizational structures and become more entrepreneurial to use Lean Startup concepts.
Strategy 2 Market helps companies increase growth and decrease product development complexity. www.strategy2market.com
For more information or to speak with one of our consultants, please contact Mary Drotar at 312-212-3144 or [email protected]