Today I have learned so many new things — the sociology of weak ties, the joys of the Chilean healthcare system (yes, that is not a sarcastic comment), the best ways to create authentic evaluations to track students’ progress. My brain is buzzing with new ideas, so much that I can’t sleep… at least not until I share part of what I learned today: how to bring the Lean Startup into established companies.

The lean startup is incredibly popular in the startup community. The clearest and most concise overview that I’ve read is Steve Blank’s May 2013 Harvard Business Review article: Why the Lean Startup Changes Everything. (emphasis mine)

Launching a new enterprise—whether it’s a tech start-up, a small business, or an initiative within a large corporation—has always been a hit-or-miss proposition. According to the decades-old formula, you write a business plan, pitch it to investors, assemble a team, introduce a product, and start selling as hard as you can. And somewhere in this sequence of events, you’ll probably suffer a fatal setback. The odds are not with you: As new research by Harvard Business School’s Shikhar Ghosh shows, 75% of all start-ups fail.

But recently an important countervailing force has emerged, one that can make the process of starting a company less risky. It’s a methodology called the “lean start-up,” and it favors experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional “big design up front” development. Although the methodology is just a few years old, its concepts—such as “minimum viable product” and “pivoting”—have quickly taken root in the start-up world, and business schools have already begun adapting their curricula to teach them.

Here’s a graphic from that same Harvard Business Review article that illustrates one of the core concepts of the lean startup. Note that “company building” is the final step. But what if the company is already built? How might this process work in that situation?

This morning I watched a live webinar with Eric Ries, Brant Cooper, and Patrick Vlaskovits about how to bring these methods into established companies. Here’s the description of the event.

Lean Startup techniques aren’t just for young companies. In fact, they’ve been profitably applied in established companies like Intuit, GE, and Toyota. But there are particular challenges in bringing Lean Startup to enterprise corporations, and they aren’t always obvious. In this webcast, Eric Ries, Brant Cooper and Patrick Vlaskovits – all of whom have worked closely with Fortune 500 companies – will discuss some of the most common mistakes and paths to success that established firms can take in implementing Lean Startup methods. Their conversation will be followed by live Q&A with the webcast attendees, so come with your questions in mind.

Here are some of my notes from the event:

• Anyone facing extreme uncertainty is an entrepreneur, regardless of what it says on their business card.
• The goal is sustainable growth through continuous innovation. The challenge of creating this kind of growth is the same, regardless of the size of the organization.
• The galvanizing force for implementing the Lean Startup in an established company is generally a C-level executive who has read Eric Ries’ book and gets it. This executive often hand-picks an leader to bring this into the organization. Often there is a combination of a C-level executive and grassroots leaders within the organization who are already applying design thinking, agile, and hands-on learning to their work.
• Innovation is hard. Disruption is hard. Often companies will bring in an “innovation expert” and expect this person to bring quick fixes like motivational posters, but that feel-good stuff keeps you in your comfort zone, and disruptive innovation doesn’t come from one’s comfort zone.
• It is especially challenging for companies to stay competitive because of the major technological transformation that has empowered competitors from all over the world.
• Real disruptive innovation often doesn’t yield immediate revenue. The quickest way to kill disruptive innovation is by asking questions like: “What is the ROI?” “When am I going to see it?” Therefore, it is crucial that a C-level executive create a way to fund experiments, without the expectation of immediate ROI. This might be in the form of a lab or subsidiary identities.
• A major challenge in implementing the lean startup within companies is to provide accurate innovation accounting (not vanity metrics) that communicate the value of these experiments in a way that finance can understand.
• You can’t wait for magic stardust to come along and create lean startup culture. It needs to be intentionally cultivated, with buy-in from the very top of an organization, in a way that doesn’t affect the way that the organization is currently operating its core business with core customers.
• A core component of the lean startup is the “minimum viable product” (MVP) but don’t launch an MVP to all your existing customers (that might erode the company’s reputation). Instead, structure it as a standalone business or product that is reaching out to new customers. This might include an alternate brand and/or specific guidelines from the legal team.