Thinking like a start-up: Establishing agility and innovative capacity
One question is often asked when we are called in companies with larger, established structures: “Can we use lean start-up strategies to prevent our organization from becoming sluggish and bureaucratic? Our experience is clear: Yes, that can succeed.
But what is so special about start-ups?
- In start-ups, people create new products and services under extreme uncertainty. They have their focus in technology, a very essential difference to most established companies.
- Start-ups are agile, which enables them to be extremely innovative. This means that they reinvent themselves every day, test, reject, learn, change their product and even their business model until it fits and their customers are satisfied.
- Start-ups work almost without hierarchies and according to a integrated approach. This means that each individual thinks along with you on other issues and feels responsible like an entrepreneur for ensuring that everything works in the end. Here there is real cross-functional teamwork.
- Instead of business plans, “assumptions with a leap of faith” are made, which primarily relate to the value and growth hypothesis of the company.
- For each idea, they quickly build simple prototypes, test them with potential customers, develop them further – or drop them.
- Only the next step is ever financed. In the beginning there is little money, later more and more. Start-ups usually have to manage with very limited resources, so they have to be extremely creative to achieve their goals with the means available.
- Because hard indicators are not yet effective, success is measured by the reactions of customers. This makes them creative and forces them to stay close to their customers in order to earn money.
- What works is quickly scaled.
Even established companies can let such an entrepreneurial spirit be recruited. Start-ups are forced to meet challenges with very specific, predictable and, above all, learnable methods. This is where it gets exciting for the corporate world – because many of these methods can also be excellently adapted for medium-sized and large companies. Such as the following:
Minimum Viable Product
The Minimum Viable Product (MVP) describes a first and minimally functional version of the product. The primary purpose of such a MVP is to gain insight into the market opportunities of a product idea with as little initial investment as possible. This prototype contains only the essential features of the product and is the beginning of a cyclical and iterative development in which the MVP is evaluated on the market. It is then continuously improved and its functional scope adapted and extended before it passes through this loop again.
Rapid prototyping allows companies to receive feedback on new developments as early as possible. Already in the planning phase of a – often digital – project it is essential to develop an idea and vision for the finished end product. Building a product prototype in a very simple way helps not only to visualize the often abstract and theoretical ideas, but also to make them tangible.
Build Measure Learn
„Build-Measure-Learn“ is a general mindset that combines the two concepts MVP and Rapid Prototyping. The way of thinking describes a feedback loop that enables a high degree of agility in product development. Companies are particularly effective when they can quickly develop a testable product from ideas and evaluate its market impact. “Build-Measure-Learn” describes this cycle of learning in order to convert ideas into products, to measure customer reactions and to further develop the idea on this basis.
Agiles Project Management
As a rule, start-ups rely on consistently agile principles. This enables them to react quickly to external influences, prioritize many ideas and reflect them in product development. This enables them to complete smaller project steps at a higher frequency and to react more quickly to feedback and changing requirements. Short development cycles of two to three weeks – so-called Sprints – enable continuous improvement of the work process with constant reflection. Agile teams are supposed to form themselves on their own responsibility around independently recognized problems and put together the skills to solve them independently. In such a working environment, management assumes the role of the “enabler”, who accompanies the problem-solving process as a sparring partner, not as a superior. This role is no less important than classic leadership roles! But it is a real challenge, especially for managers and executives who are used to control and authority. For completely agile work, however, it is necessary in the sense of empowerment that decisions are democratised and made directly in the problem-solving teams.
Read more articles on “The Start-up Way”:
- Your homework: Start-up strategies for managers
The leadership role in start-ups is quite different from the traditional one. What can managers benefit from?
- How you become fit for Lean Change
Practical advices on how to implement Lean Change Management in your Company.
- Our book recommendation „The Startup Way“ by Eric Ries
How can managers and executives best meet the challenges of the 21st century? Eric Ries recommends the “Start-up Way”.