440. How to Apply Lean Startup at Large Organizations with Lean Startup Co CEO, Ben Hafele

Introduction:

In this episode, we dive into the world of Lean Startup, 13 years on from its inception, and explore the challenges and nuances of applying it within large corporations.

While Lean Startup principles are widely taught, executing them in established corporate environments often leads to failure. Our guest, Ben Hafele from Lean Startup Corp, shares his firsthand insights on why this happens and how leaders can overcome these challenges to foster innovation within their organizations.

Key Topics Covered:

• A quick recap of the Lean Startup methodology, focusing on rapid experimentation, validated learning, and customer feedback loops. Why is it still relevant today, and how does it differ from traditional corporate processes?
• Teaching the Lean Startup approach is one thing, but applying it in a corporate setting is an entirely different challenge. Why does it often fail in large organizations, and what can leaders do to make it successful?
• Process blockers: How existing systems and bureaucratic hurdles slow down the Lean process.
• People blockers and cultural dynamics: Exploring the resistance to change, risk aversion, and the "not a startup" mindset common in corporate environments.
• Navigating stakeholder interests: In large organizations, aligning various stakeholders with differing priorities can be a significant hurdle. Ben shares tips for getting everyone on board.
• Lean Startup is at risk when it doesn't produce immediate wins or when a key sponsor exits (e.g., the shift in focus at GE after Jeff Immelt's departure). How can organizations safeguard against this?
• Lean Startup's emphasis on rapid experimentation often clashes with the slow-moving approval processes in big companies. How can corporations adapt, and what structural changes are necessary to allow for cross-functional, agile teams?
• Ben discusses how breaking down silos and empowering cross-functional teams is essential for Lean Startup success, and why the phrase "we’re not a startup" needs to be reframed to align with corporate goals like cutting costs, improving NPS, and avoiding past failures.
• Large corporations are often risk-averse and bound by strict governance. How can Lean Startup models align with these realities, and how do organizations deal with basic barriers like permission to use the right tools?
• Enterprises are used to long-term planning and predictable outcomes. How can leaders balance these with Lean Startup's iterative, experiment-driven approach without losing sight of core business goals?
• Ben explores how the VC-inspired approach of staged funding, lots of small bets, and measuring innovation metrics instead of pure ROI can drive corporate innovation.
• Corporate cultures aren’t always built for the speed and ownership required by Lean Startup. Slow decision-making and the need for consensus can stifle progress. What cultural shifts are necessary to make this work?
• Corporate inertia and resistance to change are notorious in large organizations. How can Lean Startup help break through these barriers to create meaningful, lasting innovation?
• Ben discusses the pros and cons of externalizing innovation through Lean Startup teams, innovation outposts, or whether it’s better to invest in startups directly through corporate venture capital (CVC).

Show Notes:

Ben on Linkedin: https://www.linkedin.com/in/ben-hafele

Lean Startup Co: https://leanstartup.co

Lean AI Podcast: https://www.youtube.com/playlist?list=PL1M9pu1POlen6tXqJCqt_Y-YVBAtygiRp

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