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Lean Start-Up Method: Radical Innovations
// By Eric Ries

Comprehensive restructuring is a tightrope in imported companies. On the one hand, the company has a considerable customer base, which expects an excellent service, as well as investors who expect a steady or growing return. How do you handle this?

Sustainable growth is only possible through innovation

The period of time in which a company can maintain market leadership with some reliability in order to use its previous innovations is shrinking, and therefore even those who are firmly rooted are forced to invest in new innovations.

The only sustainable way to long-term economic growth is to set up an “innovation forge” that uses lean startup techniques to continuously produce disruptive innovations. Scott Cook, founder of the Intuit software company, said: “The problems are not with the teams or entrepreneurs. They are excited about the opportunity to bring their baby to the market quickly. They are excited about the opportunity to get approval from customers rather than pinstripe suit wearers. The real problem is top and middle management. There are many executives who owe their success to analysis. They think they are analysts and their job is to plan, analyze and have a plan at all. ”

StartUp methods in established companies

In other words, established companies must find out what Scott Cook discovered 1983, but on an industrial scale and with a leadership coherence firmly rooted in the traditional management culture.

The ever-unorthodox Cook wanted me to give these ideas a litmus test, so I delivered a lecture that all 7000 Intuit employees could follow at the same time;

Developing products and services in extreme uncertainty

I explained the Lean Startup theory and repeated my definition - from the organization that developed new products and services in an environment of extreme uncertainty.

What happened next came to me indelibly: Brad Smith sat in front of me during the lecture. When I had finished, he rose and said, addressed to all Intuit employees:

Radical rethinking in management is important for innovation

“People, listen carefully. You now know Eric's definition of a startup. It consists of three parts - and we will match all three parts at Intuit. ”

Scott Cook and Brad Smith are leaders who have recognized that radical rethinking in management is indispensable. Leadership means creating prerequisites that allow employees to continue experimenting and promote an entrepreneurship culture.

Intuit is the proof that the Lean start-up method can also prove itself in imported companies. This is because the employees think entrepreneurially and take responsibility for innovation themselves. How can this work?

How do employees take responsibility?

Brad Smith explained that Intuit employees take responsibility for their ongoing innovation efforts by measuring two things:

 The number of buyers of products that did not exist three years ago,

 and the percentage of business profit achieved with new offers from the same period.

Increase yield through better management

Under the old model, it took an average of five and a half years for successful new products to reach the 50 million-dollar yield zone. Brad Smith said:

“We had $ 50 million in revenue from deals that didn't exist the previous year. No particular offer is the focus of attention. What is more important is the combination of a whole range of innovations; these are the things that give us the strength to take a short cut on the upcoming ox tour by throwing overboard anything that doesn't make sense and getting the rest of it over twice as fast. ”

Disposing of contaminated sites pays off

For a company as big as Intuit, the modest initial results are. The company has to dispose of legacies in the form of systems and ways of thinking that were adopted decades ago.

But the lead role in the development of entrepreneurial thinking and acting management is beginning to pay off. Leadership requires the development of an environment that allows employees to make the necessary experiments for entrepreneurial thinking and action.

Innovation is the key issue

Changes to the TurboTax product enabled the Intuit team to conduct 500 software experiments per tax season. Previously, no resourceful marketer would have succeeded, even if he wanted to, because there was no system that could change the site so rapidly.

Intuit has invested in systems that have increased the speed of building, deploying, and analyzing tests. But the development of these experimental systems is a matter of chief concern; it must be anchored by management in the company.

Executives without Caesar's behavior

It is important to prevent executives from playing Caesar and turning any idea away or through; we need to introduce a culture and systems that allow teams to be agile and innovate at the same pace as the experimentation system.

Text comes from: Lean Startup: Schnell, risikolos und erfolgreich Unternehmen gründen (2014) by Eric Ries, published by Münchener Verlagsgruppe (MVG), Reprints by friendly permission of the publisher.