Lean Innovation -
Igniting Innovation in the Enterprise

What is it that sparks innovation? How’s that for a “meaning of life” type, unanswerable question? I’m going to attempt to answer in the context of a large enterprise but I first want to examine what sparks innovation in the startup space. That’s something I’ve had the privilege to witness first hand over the past year as a mentor at a startup incubator and as a Lean Startup consultant.

The startup founder is a unique and admirable animal. One part crazy for taking on complete uncertainty without a paycheque and one part rational for simply attempting to fill a need or relieve a pain that has gone unaddressed. Many “what if” thoughts and conversations must occur before anything concrete, executable and potentially viable emerges. The startups I help usually come to me at this early or idea stage. It’s what happens next (what Eric Ries would call “the boring stuff”) that matters most. Customer validation is a requirement to reaching the holy grail of Product-Market Fit. The prerequisite is a “get out of the building” mentality where each concept and feature of the idea is reviewed with early adopter customers before significant time and money is spent on creating a fantastic solution to a problem no one has. Aside: I’ve written a post about what makes startups forge ahead without customer validation here. With validation in hand, the startup is now ready to progressively elaborate a solution to that which has been validated. It’s very likely that along the path to validation, the startup has altered course (aka “pivoted”) according to the road to validation paved by customers. This road ends with what the entrepreneur hopes will be considered an innovation. Note that the very word implies implementation. Innovation is not just an idea; those are commodity. It is an implemented solution that did not previously exist that moves us forward in some way.

So how does this (admittedly simplified) formula of startup innovation apply to those who toil under the banner of a well established enterprise that has already “crossed the chasm” and has well established mainstream customers who allow earnings to grow at a predictable pace that satisfies shareholders? These potential “intrapreneurs” are no less intelligent, creative and energetic a group than their entrepreneur counterparts. It could be argued that the intrapreneur stands a better chance due to the potential source of funding they have being part of an already successful company. So then, why isn’t there more innovation emerging from the enterprise than from the startup world? The reasons are many and varied: enterprise focus solely on ideas that forward existing goals, government support for startups, supportive ecosystems of mentors and advisors for startups, no barriers to idea creation (ie. a day-to-day job) in a startup, etc. The reason I will focus on is the lack of a well established process within most enterprises to achieve customer validation for ideas.

In most enterprises, those who are responsible for the creation of strategy are far removed from the very customers their strategies are meant to serve. Yet, in many ways, what is executed based on these strategies is intended to be innovative for the target customers of the enterprise. This is in contrast to the startup where the evolution from idea to Product-Market Fit travels directly down a road where the entrepreneur is in constant contact with their customer. So then, how to bridge this gap between the enterprise strategists and their customers? Note that I am presupposing that direct (or as direct as possible) contact with the customer is critical to achieving validation and, eventually, innovation. There is no chance for innovation when what is strategized and subsequently delivered is of no value to the customer.

The bridge to this gap borrows directly from Lean Startup methods. It is what I call the Lean Innovation methodology. Just as in Lean Startup, much of the methodology is based on direct and structured communication with the customer and measurement not only of what customers say but what they do. Action is the only way to truly detect traction/validation. Along the path to traction/validation, hypotheses are created and tests designed using the minimum amount of time and money possible. The concept sounds simple and intuitive enough, however, there are unique challenges to implement it in the enterprise that don’t exist for a startup:

1. Who will execute the methodology in direct contact with customers?

Those who create strategy (ie. the CEO) are typically not able to spend time on the front lines of the business to contact customers. Those who serve customers are specialists in selling and delivering the enterprise’s existing solutions to customers and lack a more abstracted and strategic focus. Although every enterprise is different and may be able to, for example, train front line staff in the Lean Innovation methodology, it is often the case that Lean Innovation specialists must drive the idea validation process. It is frequently difficult to train the ability to construct hypotheses, design tests for hypotheses, interview customers, and measure results.

2. How will the validation be captured and communicated to the strategists?

This is a non-issue for a startup as it is typically one of the founders executing the methodology. Given that the founder is a strategist, nothing is lost in translation. In the enterprise setting, documentation of customer validation becomes critical so that it is actionable by the strategist. The use of customized customer validation result templates is highly recommended to ensure consistency.

3. How can new ideas be captured and prioritized?

Most enterprises lack structured methods of collecting and prioritizing ideas. There are opportunities to duplicate the methods used in the Lean Startup methodology in the enterprise so that ideas are modeled in a form that allows for rapid evaluation, prioritization and execution via customer validation.

With the ability to capture and prioritize ideas as they are generated and to validate the highest priority ones with the end customer, enterprise strategists would be equipped with the raw material to create executable solutions to their customer’s biggest points of pain.

The ideas of enterprise intrapreneurs have waited far too long to be heard, validated, strategized and executed. There is no larger source of untapped innovation than in the enterprise. The enterprise has waited far too long to unleash its full innovative potential.