Does Lean Start-Up really work?
Disruption is the new normal across industries. There is no debate in management teams over if there is or is not a threat; only, how do we take advantage of the opportunity and avoid the threat. Fortunately, there is also a rich set of tools and techniques available to help established firms create new businesses inside their corporations that can help them move ahead of the upstart starts-ups. Design Thinking, Lean Start-up, Business Model Canvas, and Business Experimentation Sprints, are all well established as techniques. They are helping large firms to be more agile, moving faster to test and iterate new business concepts.
These techniques have been enthusiastically embraced and no doubt have many positives. But, do they really work? The inventor of the Lean method at U.C. Berkeley, Steve Blank, said recently: “After three or four years of watching innovation in large companies trying to use the lean startup methodology, I’m embarrassed to say that most of it has ended up in innovation theater with nice coffee mugs and posters but few results.”
Change Logic heard something similar from a client recently. The firm had spent a lot of time and money on the ‘Business Model Canvas’, using the approach to build an excellent model for developing and testing new concepts. However, as soon as they got to the problem of scaling, the method was a dead-end. Lean Start-up and Business Model Canvas are silent with respect to Scaling; that is, if the entrepreneurial idea begins to grow, neither the lean startup nor the business canvas offer guidance for how to design the organization to ensure that the growth trajectory is sustained.
In our recent book, Lead and Disrupt, Charles O’Reilly and I described the practices that enable firms to explore into disruptive new business areas, even as they successfully operate a core business. We call this approach ‘Ambidexterity’; which offers a bridge between the start-up inspired method of Blank and others and the real-world of large corporations. We think you can do what Steve Blank has found so hard to achieve.
What Charles and I, working with our colleague Andy Binns from Change Logic, want to know is what makes the difference? Why is it that some do succeed and others end-up with the coffee mug?
We have launched a ‘Three Disciplines of Innovation’ survey to better understand how firms ideate, incubate and scale disruptive new businesses successfully. What practices differentiate the best from the rest? How do you take an exciting idea, convert it into an experiment, and then scale into robust, revenue generating businesses?