Overcoming the Barriers to Lean Innovation in the Enterprise

By now, the merits of Lean methodologies are clear, enabling even the largest companies to move faster, fend off competition from startups, and build great products. But without top-down investment in training and workflow adaptations, there are numerous barriers standing in the way for eager employees.

On my podcast, This is Product Management, I’ve had the opportunity to interview talented people who have gone through the process and know what it takes to make an impact within a large organization. Below are four lessons I’ve learned from interviewing Lean Customer Development Coach Bob Dorf, Microsoft’s Principal Design Researcher Cindy Alvarez, and Moves the Needle Founder Aaron Eden.

1. Find Your Champion

Startups are risky regardless of whether they’re started by an executive inside of a large corporation or a scrappy entrepreneur in a garage. That risk is not something enterprise companies are typically accustomed to. Corporate teams have been in execution mode, as opposed to discovery mode, for decades (if not centuries). Bob Dorf — serial entrepreneur, investor, co-author of The Startup Owner’s Manual, and advisor to Fortune 500 companies — shared how the current way of doing things can get in the way of creating the future. “The biggest excuse is, ‘We do everything by the book, we don’t fail, and why would we take on that risk for some peanut of a business compared to our enterprise?’” he said.

However, as Bob added, “that peanut grows a peanut farm and that’s really what the corporation needs to accept and strive for.” Despite the high rate of failure attached to new ventures, many companies need new product development in order to achieve real, sustainable growth.

Undertaking such a fundamental shift in mindset within a large organization requires an internal champion to spearhead the effort. “The Lean team has to have a passionate courageous champion,” Bob said.

These champions are often motivated by the desire to make a real impact on the organization and are willing to bear the risk of failure to do so.

Aaron Eden was such a champion at Intuit. Despite not having meaningful seniority or having been given any kind of introduction or permission, Aaron emailed Intuit’s CEO to ask him to judge the Lean workshop Aaron organized, and to help get colleagues to attend.

2. Start Small

All too often, over-planning prevents aspiring innovators from ever getting started. Aaron shed some light on this phenomenon. “Often times we get sucked into planning or trying to get buy-in across the entire organization before we get moving,” he said.

To avoid planning paralysis, Aaron encouraged innovators to “start small but think big and get moving right away.” At Intuit, Aaron started with a single Lean workshop. In fact, he didn’t even create the curriculum for the workshop until he got confirmation that employees would attend.

Cindy Alvarez, who’s responsible for bringing Lean practices to Microsoft, provided similar advice and shared her experience in getting started. “A lot of what I do is customer development for customer development,” she said. This manifested with Cindy and her team traveling from their office in the Bay Area to Microsoft’s corporate office in Redmond and simply “camping out” in an open area, inviting people to ask questions and share their challenges.

Cindy encouraged aspiring Lean practitioners to start getting customer feedback even before getting permission to do so from the powers that be. “[To] people inside large companies who are struggling with this, I’ll say, ‘You might want to just do some interviews guerilla-style and then come tell everyone what you learned, versus saying, ‘We’re going to do this’ or ‘We’re going to get buy-in for it’ — just do it. And then find some interesting stuff and kind of dangle it in front of your manager and say, ‘Hey, there’s more where this came from, we just need to keep talking to people.”

Simply getting started, learning, and sharing the results, no matter how small, builds the momentum that leads to greater outcomes.

3. Incentivize Employees (Not Just Financially)

The incentive to a startup founder is clear. If her startup is successful, she will profit handsomely. However, most corporations are not easily able to provide incentives such as equity in a new venture to their employees.

Some corporate innovators get stuck trying to convince the human resources team to rework compensation structures. Both Aaron and Bob reminded me that employees are motivated by more than just equity, though. Many are fueled by the opportunity to get promoted within their companies, and exposure to senior executives can help with that.

Aaron’s ability to get Intuit’s CEO to judge one of his Lean workshops contributed to one team’s ability during the session to find paying customers for a brand new idea. Aaron’s efforts culimanated in Intuit employees launching 100 startups in 100 days and ultimately earning over $90 million in revenue.

4. Empower Employees to Cut Through Red Tape

The process of creating something new inherently requires questioning assumptions and challenging the status quo. Often times, the policies and procedures that can hinder corporate innovation need to be strategically side-stepped.

“It’s all about empowerment and permission to break rules,” Bob explained. “And the way I think of it is you almost have to put your Lean team in a bubble and protect them from the four feet of regulations and policies and procedures. Give them permission to — not put the company at risk, but to violate some of those rules.”

Bob shared a story about a healthcare company he consulted that wasn’t allowed to talk to customers because of HIPAA compliance. Bob was prepared to tear up his contract and walk away. Fortunately, the company’s CEO was determined to find a solution and eventually he did: The team never asked the customer his or her last name.

He described another common challenge that warrants bending the rules: Senior executives who mandate products and features and aren’t receptive to customer feedback.

“Somebody with a window corner office says, ‘Ok, Lean team, do this’ and they prescribe the product and the features and the go-to market strategy. ‘Ok go make it work, you’ve got eight weeks’,” Bob explained, “and nobody wants to go tell that big shot in the corner office that ‘Well, we tested the product features with customers and they don’t really want your prescription, they want a different prescription.’ Easier to just do it despite the lack of customer enthusiasm. And so it becomes a really self-defeating process.”

To build products that customers actually want, innovators must question the rules and discover viable solutions, rather than simply taking orders from the top down. And leaders must empower their employees to cut through red tape.

To make sure things bend without breaking, Cindy encouraged innovators to properly set expectations, both with customers — about what products and features can, can’t, and might be built — and with managers, about the uncertainty regarding what will be learned from conducting customer interviews.