How To Run Your Enterprise

Like a Lean Startup

Interviews with:

How To Run Your Enterprise

Like a Lean Startup

Interviews with:

ENTERPRISE
GoCatalant.com
gocatalant.com
 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

AUTHORS
Catalant
Cynthia Hollen

INTERVIEWS
Dr. Shawn Davis, Principal Engineer of Device Strategy, Amgen
Elise Kissling, Director of Creator Space™, BASF
Dyan Finkhousen, Director of Open Innovation & Advanced Manufacturing, General Electric
Alex Chriss, Vice President and General Manager, Intuit

CONTACT
Catalant
280 Summer St
Boston, MA 02210
(617) 446-3734
[email protected]

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 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

A Word From The CEO

Every large company was once a startup. But as these companies grow, they
often lose the entrepreneurial spirit that made them what they were. As a
large enterprise, they can become process-driven, slow moving, and risk-
averse, leaving them vulnerable to younger, faster moving competition. But
this does not have to be the case.

We believe that the characteristics of a startup, e.g. flexibility, innovation,

lean processes, etc., can and should scale along with the business. Here at
Catalant, we’ve had the honor of working with thousands of companies,
including many Fortune 1000s, to help them bring flexibility and innovation
into their businesses.

Rob Biederman With these learnings in hand, and leveraging interviews with companies like
CEO, Catalant GE, Intuit, Amgen, and BASF, we have written a white paper to outline the
best practices that we’ve seen for how even the largest of enterprises can
run like lean startups.

Regards,
Rob

About Catalant:

Leaders at companies of all sizes have long sought a solution for meeting
critical ad-hoc needs for experienced business expertise. Catalant offers the
leading technology platform connecting elite business talent to enterprises
to tackle projects flexibly, quickly and efficiently. Catalant has built a global
market for on-demand expertise and developed best-in-class software tools
for engaging and managing this market.

Catalant’s innovative human capital solution connects business leaders with

nearly 30,000 boutique consulting firms, custom teams, and independent
experts for project-based work. Today, Catalant serves thousands of clients,
including Fortune 1000 companies like GE, Pfizer, Staples, and Microsoft, as
well as countless others on a confidential basis.

Learn more at GoCatalant.com

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HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

Contents

A Word From The CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Why Enterprises Should Emulate Lean Startups . . . . . . 6

Case: Amgen’s Device Strategy Group - Changing Culture from Inside . . . . . . 8

Focused. Flexible. Fast. . . . . . . . . . . . . . . . . . . . . . . . 11

Focused . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Case: BASF’s Creator SpaceTM - Innovation Through Co-Creation . . . . . . 12

Flexible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Case: Intuit’s Continuous Product Evolution - Savor Surprises . . . . . . . . 14

Fast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Case: Intuit Part 2, Creating Space for Intrapreneurs to Disrupt . . . . . . . 15

Innovative Projects . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Case: GE Tapping Into the Global Brain . . . . . . . . . . . . . . . . . . . . 19

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

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 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

Why Enterprises Should

Emulate Lean Startups

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 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

Why Enterprises Should Emulate

Lean Startups
“Across the board, enterprises are recognizing that they need to change or they will get beaten by leaner, faster competitors.”

What does every single large company have in common? It was once a startup. Where along the way does the entrepreneurial,
risk-tolerant spirit give way to the inertia and risk-aversion often observed at established companies? And why does it matter?

Over the last 20 years, enterprises have learned to look differently at smaller, younger companies. The once undisputed “benefits”
of scope, scale, and history are now often dismissed, or worse, disrupted, by newer entrants. These agile upstarts are unencumbered
by balancing conglomerates of products, maintaining economies of scale, and managing carefully crafted hierarchies.

Successful lean startups famously outperform their older, heavier competition in everything from customer adoption to speed-
to-market. From Netflix versus Blockbuster to Amazon versus Barnes & Noble to Uber versus yellow cabs, examples of innovative
business models toppling the corporate giants have become both commonplace and revolutionary in our lives.

Table 1 Successful lean startups outperform enterprises on key metrics

Across the board, enterprises are recognizing that they need to change or get beaten by leaner, faster competitors. As a result,
many are introducing some form of lean management, “intrepreneurial” incubating, or other creative approaches in order to insert
a startup mentality into their enterprise.

Separating Lean from Startup

Simply being a startup does not ensure success. In fact, 80 to 90% of startups fail, and very few become shining stars1. Therefore,
the goal is not to mimic startups. Instead, enterprises should take lessons from successful startups and the elements that led them
to win, while continuing to leverage the big corporate advantages that got these enterprises to where they are today.

6 1
Revsin, Yan. “The Major Reasons Startups Fail - And How You Can Avoid Them”, Forbes.com March 5, 2015.
 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

How can Big Be Lean?

Several key factors keep enterprises from naturally being lean. In interviews with startup veterans, “intrapreneurial” managers, and
corporate executives seeking leaner outcomes, the most common corporate obstacles are culture and process. Cultural obstacles
include the common behaviors, ingrained beliefs, and shared history that drive a firm-wide mentality about how things get done.
Process obstacles are the documented, legal, and operational procedures that create stability and reduce risks, but also block
change and innovation.

Lean managers and employees, on the other hand, think differently and are measured differently. They speak differently. And they
make decisions very differently.

The mindset difference is fundamental: even the language that executives use to describe their teams, challenges, and achievements
clearly illustrate the barriers enterprises face in becoming lean.

In BCG’s 2015 Global Innovation Study, 1,500 enterprise executives tasked with improving innovation and product development
noted their biggest obstacles to success included slow processes, difficulty finding and selecting ideas, improper incentives, and
leadership and culture issues. These obstacles are common amongst large enterprises that struggle to be lean.

Recognizing obstacles to efficiency and innovation is critical. But for an enterprise to adopt lean practices, it first must understand
what startup qualities to copy, what to ignore, and what to adapt to fit.

Amgen is one global company tackling these obstacles head on with deliberate and bold steps. The world’s largest independent
biotech company is proving that it can successfully leverage the scope and scale of a multi-billion dollar enterprise with the agile
mindset of a lean team.

2
Global Innovation Study. Rep. N.p.: Boston Consulting Group, 2015. Print. 7
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

Case: Amgen’s Device Strategy Group – Chang-

ing Culture and Process from Inside
“The team is leveraging agile startup lessons to shift its focus to the customer and company, which is driving better
results for the enterprise.”

“There is a sunk cost fallacy in large companies,” says

Davis, explaining that companies continue to invest more
time and money into projects, simply because they have
already invested a lot of time and money into that project.
Lean companies, on the other hand, look at the resources
needed for every effort underway, and objectively decide
if each project is the best use of company resources in
the long run. With a focus on the big picture investment,
Amgen is a $115 billion, 35 year-old, publically traded timeline, and outcome factors, Amgen can determine the
biotech company that sells some of the world’s most best overall portfolio, and the best use of resources.
successful drugs and therapeutic biologicals.
Lean companies make tradeoffs each day in an effort
And it wants to be lean. to maximize total company value. If large enterprises
can bring that kind of clarity and discipline to their own
Three years ago, Amgen created the Advanced Device decision making processes, they can realize the same
Technology team with a mandate to leverage lean benefits.
principles in order to understand its portfolio and drug
delivery needs, and to match those needs to technologies A Lean Bias Frame – Changing Your
best suited to drive value for Amgen as a whole.
Approach to Risk
Amgen’s Dr. Shawn Davis, Principal Engineer of Device
Strategy, calls the skills and thought processes this eight- One of the greatest challenges the Amgen team faces in
person team is injecting a “startup bias.” With this new driving innovative thinking is changing risk biases.
approach to product innovation and device strategy, the
team is focused on what is good for the customer and “In a big company, if you take a risk that makes the
for the company overall, not just what is good for each company a billion dollars, you get a pat on the back and a
product. promotion. If you take a sound risk that costs the company
a billion dollars, you expect to be fired,” says Davis. In
Ruthless Priorities theory, he explains, the company benefits by taking
balanced risks to improve the overall portfolio of results,
According to Davis, a startup veteran, many large biotech but individuals generally don’t feel safe taking risks that
companies fund investments on a product-by-product could threaten their job security.
basis, which distorts the focus on the core goals of
the broader company. “When each team is focused There are two ways to tackle this hurdle, and Amgen is
on the time cycles and investments required for their pursuing both. The first is to hire people with a greater
own product, they can’t see the trade-offs of company risk-taking profile, as they have with this new team.
resources against other opportunities, so they are not The second is to make risk-taking more celebrated
maximizing the whole company’s value.”1 and rewarded. The Advanced Device Technology team
serves as a role model within Amgen, as a way to create
According to Davis, Amgen’s Advanced Device Technology a safer, more encouraging workplace where budding
team is inserting the “ruthless priorities” of a startup into entrepreneurs and risk-takers feel welcome. Davis admits
its efforts, with a focus on critical items for the company that changing a company’s risk biases is extremely hard,
overall and a tighter runway to profitably deliver more and that it is critical for management to back up the shift
effective products to customers. with follow-though and support for this to happen.

8 3
“Run Like a Lean Startup Amgen.” Telephone interview with Catalant. 11 Dec. 2015.
 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

Outside of their own mandate, Davis’s team is also working They deliberately chose to bring an “insurgency” of startup
with groups across Amgen to encourage them to ask veterans and project team members into the organization to
questions differently. They’re working specifically with shift the culture from the inside, as evidenced by the new
mid-level managers and product teams throughout the Advanced Device Technology team. In addition to great
organization to reframe questions to focus on accomplishing scientific and technical skills, “the social skills to carry the
goals, rather than avoiding risk. message that risk-taking is acceptable and that excuses get in
the way of innovation, throughout the company,” has been a
When evaluating a new filled injectable device opportunity, key hiring criterion for this “lean bias” team.
for instance, they focus on asking questions like “How can
we do this?” and “What if we try this?”, rather than the more Though only three years old, the Advanced Device
typical enterprise bias that starts with “Why shouldn’t we do Technology team is leveraging lean thinking to make decisions
this?” that are directly impacting the company’s core products and
markets. The team is leveraging agile startup lessons to shift
While it is too early to show measurable results, Davis can its focus to the customer and company, which is driving
already point to products that have been initiated, funding better results for the enterprise.
that has been cut back, and innovations that have resulted
from looking at company challenges through a lean bias
decision frame.

Importing Lean Thinking

In an industry-wide push to realize greater innovation,
most biotech companies have created “Innovation Centers”
or outsourced the role to partners. This runs the risk of
essentially exporting innovation and lean thinking to areas
outside the core company. According to Davis, Amgen is
acutely aware of this risk and is actively focused on fostering
innovation throughout the organization.

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HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

Focused. Flexible. Fast.

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 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

Focused. Flexible. Fast.

“The following three examples are from well-respected large enterprises that are embracing lessons from lean startups and finding
compelling ways to adapt them into their own corporate culture.”

The key behaviors that enterprises must learn: be focused on inside or outside your company, tells you what you really need
core targets, flexible enough to learn and innovate, and fast to know.”4 Customer feedback gets massaged to look good,
enough to capture markets. and managers soften bad news and emphasize good news. It is
simply harder for decision makers at enterprises to hear the real
feedback that can lead to the next breakthrough.

Learning from customers is a key focus area for chemicals giant

BASF. To get close to as many customers as possible, the 113,000
employee company did something really remarkable. And they
“Through co-creation, the company did it in a way that only a global enterprise could.

connects people and ideas around
the globe with the aim of jointly

developing new solutions to global
challenges.”

Every story of lean startup success highlights the moment when

one of these key traits led to the breakthrough that created a
phenomenon.

The following three examples are from well-respected large

enterprises that are embracing lessons from lean startups and
finding compelling ways to adapt them into their own corporate
culture.

Focused Flexible
Focused
A lean startup’s success often comes from being close enough
to the customer to listen. At a small company, executives are
naturally closer to the end user. It is not uncommon, for example,
to have the CEO be the lead on a customer call. The startup’s
survival hangs on the reactions of each and every customer,
so they share, celebrate, fret and discuss customer feedback in
detail across every function of the company.
Fast
Customer feedback is equally important at a large enterprise, but
harder to come by. Scott Cook, co-founder of Intuit, explains
that the biggest problem enterprise CEOs have is that “no one,

4
“Startup Grind - S Cook.” Interview by Rich Foreman. 2015. 11
 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

Case: BASF’s Creator Space™ – Innovation

Through Co-Creation
“Open innovation is the process by which companies bring outside ideas and thinking into its own innovation process by inviting
collaboration, crowdsourcing or teams to form joint innovations.”

better understand what consumers, value chain players,

governments, and other end users of its products are
frustrated about.

“We have thousands of top researchers inside BASF, and

we are great at innovation inside the company and with
Some enterprises try to act lean, and some try to buy or leading universities and institutes,” says Kissling, “but with
outsource lean. In contrast, BASF is using big to be lean. our new strategy we wanted to move in the direction of open
Their BASF Creator Space™ approach is a brilliant use of innovation and co-creation in order to innovate in ways that
big company resources leveraged to mine and nurture new are more relevant to our target groups. And to be faster!”
ideas, and it is letting BASF break through all of the traditional
barriers that stop enterprises from hearing what is going on Described by Kissling, ‘open innovation’ is the process
around them. by which a company brings outside ideas and thinking
into its own innovation process by inviting collaboration,
To celebrate 150 years of making chemicals for every crowdsourcing or teaming with partners to form joint
imaginable use around the world, BASF did something truly innovations. “Co-creation is a method you use to get there,
innovative. This $82 billion giant launched the BASF Creator especially in face-to-face interactions,” explains Kissling.
Space™, a program in which employees from across regions,
divisions and research platforms worked with customers, So the company looked to lean startups for inspiration. They
scientists, thought leaders, institutions, students and developed a vast and global “open innovation” project to
communities to understand why some of the world’s biggest meet, listen to, learn from, and collaborate with partners and
problems around food, energy and urbanization aren’t being end users. “We knew that co-creation and open innovation
solved. were very popular in the B2C space,” says Kissling, “so we
thought it would be great to adapt those methods and
And then they listened. approaches for our B2B environment.”

Innovation from the outside in, on a global scale, using And BASF reinvented “startup open innovation” to meet
the best thinkers in the world, is something only a large the needs of the global enterprise, using all of its innovation
enterprise can do. And it is the epitome of employing “lean credibility, local market expertise, corporate event
innovation” inside an enterprise to identify, test, and develop management teams and substantial resources, to conduct
big solutions to big problems. a CEO-mandated, yearlong “experiment” into new learning
methods. It was critical, according to Kissling, that CEO
According to Elise Kissling, Director of Creator Space™, BASF Kurt Bock frame the project as one of experimentation and
is re-thinking what it means to be innovative, and looking learning so that the entire team felt the freedom to takes
at not only chemical innovations, but at market driven risks and be receptive to new ideas. Even some co-creation
innovations to address societal needs and pain points.5 skeptics were won over after having the opportunity to be
part of successful collaboration, in person.
As the world’s leading chemical company, BASF is far up
the value chain from the end consumer, as it supplies BASF’s Creator Space™ was broken down into around 50 co-
chemicals and materials to the manufacturers who, in turn, creation activities run by people from across the company’s
make the products that consumers buy. Therefore, in order divisions and functions. Local thought leaders and value
to get closer to the end users of its products and systems, chain partners tackled local challenges in six regional tours.
BASF devised a yearlong “open innovation” program to Taking their cue from best practice inside and outside of the

12 5
“Run Like a Lean Startup BASF.” Telephone interview with Catalant. 1 Feb. 2016.
 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

company, the Creator Space team tailored eight co-creation The project team had weekly meetings directly with sales
methods to BASF’s B2B environment and piloted these people and customers to see what was working and what was
methods in 2015. not, and the prototype was modified based on the feedback.
Both the final offering as well as the target customer
From that work, more than 60 non-routine project proposals segments changed dramatically during the lean start-up
are now being evaluated by BASF, and many others are phase.
already being implemented by the business units.
“This is a new approach for BASF,” says Kissling. In addition to
At the New York regional tour, for instance, dozens of sourcing innovative ideas from outside the company in order
outside contributors (designers, urban planners, developers, to stay close to the customer, BASF is “using Lean Innovation
construction industry customers, etc.) focused on the methods that startups use to do prototyping and piloting so
flooding caused by Hurricane Sandy and came up with three teams can learn on fly before we go into full scale roll-out.
completely different approaches for how to protect future The feedback on the ground is that we haven’t invested that
cities from rising sea levels. These approaches now form a much because we piloted with a few customers and we now
foundation for product and business model innovation at have a much better product than we would have if we had
BASF from flood barriers to redesigned city blocks. used the process we normally do.”

At the agriculture division, a new business model idea By looking to lean startups, BASF is attempting accelerate
that bundles products and services with risk management growth with new products, business and partnership models.
components was developed. To see if the new offering was Getting there requires a top-down and a bottoms-up focus
viable, rather than taking several years to polish it and create on real customers, real problems and real pain points. In one
all new marketing material, a few innovative sales people year, BASF has made major strides in learning how it wants to
piloted the offering with 15 customers to test it before rolling approach its next 150 years of innovation.
it out more broadly.
But being focused on the consumer is not always enough.
In an ever changing world, being flexible and able to react to
new learnings is often the factor that determines success.

Stakeholder Results

>1,000 ideas 100+

10,000 external and
internal people involved in projects for direct
(short and mid-term)

4.5 million online visitors

67
12,500 users discussed online landmark proposals
(short and mid-term)

900 joined in-class trainings &

500+ Immediate wins with
Concepts (short and mid-term)

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 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

Flexible Case Study: Leveraging

Catalant to be
researchers to conduct
interviews and to administer
surveys to respondents in
Toronto, Vancouver, and
“The pivot” is one of the most touted talents of the successful Consumer Focused Montréal.
startup. The ability to see that something is not working, or
Collecting customer data is In just two weeks,
that a new opportunity has arisen, and then have the entire widely accepted as a best Anshul presented his
organization react, instantly, to capitalize on this new learning practice to validate hypotheses research, findings, and
and guide go-to-market recommendations. His team’s
requires both dexterity and courage. strategies. However, the work provided a third party
process is typically time assessment that validated the
consuming and expensive. client’s hypothesis, shed light
Over and over, large enterprises find that their financial and
on consumption patterns by
cultural investments in the status quo make seeing a new In an effort to better city, and assisted in their go-
understand the Canadian to-market strategy, ultimately
problem or opportunity very difficult. Reacting is even harder.
artisanal food consumer refining the company’s launch
quickly and efficiently, without budget.
More than 30 years ago, Intuit was the lean startup that ev- sacrificing quality, a Fortune
500 CPG company turned to In conclusion, staying ‘Focused’
eryone envied, and they have not forgotten that their focus Catalant. and close to the consumer
on customers and their ability to react to feedback quickly are doesn’t need to be a drain
Understanding the attitudes, on resources. Rather, by
the reasons that most of their top products were conceived. values and beliefs of this leveraging platforms like
Now, as a large enterprise, they have had to learn new ways market required someone Catalant, enterprises can
who not only lived in Canada, conduct consumer research in
to grow, but they have not lost sight of how crucial it is to stay
but who was also a market an effective and cost efficient
focused and flexible. research expert that had manner, helping them to stay
navigated this field before. lean.
Catalant expert, Anshul A.,
tapped into his network
and hired three additional

Case: Intuit’s Continuous Product Evolution –

Savor Surprises
Scott Cook’s mantra, “Don’t listen to what customers say, listen to what they do,” created yet another major pivot point for the
enterprise in 2009, after watching smart phone financial management demand erupt.

Intuit famously started in 1983 with two guys in room in Palo

Alto. Fast forward three decades and they are a $4.2 billion
annual revenue, 7700 employee market leader in personal and
small business financial software. And Intuit’s co-founder, Scott
Cook, works hard every day to make sure that the company
continues to heed the lessons they learned as a lean startup.

Savor Surprises
An early breakthrough for Intuit came by focusing intently on
surveys of Quicken users and then reacting quickly to capitalize finance tool. There were plenty of business accounting tools on
on their learnings. the market at the time, so the team had never even considered
that market opportunity.
Quicken was developed as a tool for personal finance, so Intuit
was surprised to find that customer surveys regularly mentioned The breakthrough insight that revolutionized Intuit was that
Quicken issues at work. In the 1980s, many people only had non-accountants at companies were suddenly able to take on
computers at work, so the team assumed workers were using bookkeeping and “accounting” roles because Quicken did not
Quicken on offices computers for personal tasks. require an understanding of debits and credits and journal entries,
like all other “accounting systems” on the market.
They probed further. To their surprise, business managers,
owners and assistants were repurposing Quicken into a business

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 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

The entire team recognized this new market opportunity, In a world where software is rolled out to customers daily,
shifted to embrace small businesses, and rapidly created a and dominant businesses are disrupted overnight, Intuit has
new product for them. QuickBooks was released the next remained not only focused and flexible, but also as fast as
year and outsold the market leader within two months. It solutions companies need to be in an app driven market.
quickly grew to an authoritative 94% market share for small
business accounting.

Intuit continued working closely with customers and tweaking

its direction based on what it heard. Intuit’s tax programs
Fast
followed a similar path of opportunity, arising from dissecting There are thousands of innovators with unprecedented
surprising behavior when they watched customers struggle access to cheap development tools and investment capital
with receipt data entry and realized that Intuit could make tax looking to capitalize on unmet needs. They can move from
preparation easier. It pioneered OCR receipt entry, bought an idea to a delivered product in just months. Typical new
a tax software company, and transformed the personal tax product development time, from concept to delivery, in a
space. large company, on the other hand, is often measured in years.
As a result, successful lean startups are able to exploit the
Experimentation slower, steadier pace of the bigger players and beat them to
market.
Today, Cook’s chief role is to work closely with a pool of
in-house startups, and to mentor and manage these small But when big companies get creative, the strengths of the
businesses. He insists that the startups, and Intuit itself, enterprise combined with the speed of a lean team can
continue to focus on listening, experimenting, and pivoting to achieve enviable results.
seize opportunities.

His mantra, “Don’t listen to what customers say, listen to

Case: Intuit Part 2,

what they do”, created yet another major pivot point for the
enterprise in 2009, after watching smart phone financial

Creating Space for

management demand erupt. Instead of asking customers
what changes they needed, they went out and watched
what new startups who were inventing their own mobile and
social financial solutions were actually doing. Intuit quickly
understood the new need driving customer defections to
Intrapreneurs to Disrupt
mobile financial solutions, and in 2009, Intuit bought Mint.
“Intuit is breaking down walls to allow their employees to be
Cook was so impressed with the Mint solution, and the Mint flexible, to innovate to cut failing products, and to deliver profit-
team, that he took the Mint management team and put it on able solutions that meet current market demands.”
top of the Quicken team. “We wanted to Mintify the whole
company”, he said.

In the past year, all of Intuit’s products, including QuickBooks,

have undergone a major transformation to online and mobile
interfaces and business models.

Intuit is so passionate about the need to be flexible and

innovative that it is has created an entire toolkit of resources
for its small business clients to help them understand
customer behaviors, imagine new opportunities, and
monetize new product visions.
The QuickBooks Self-Employed (QBSE) product, conceived
And Intuit walks the talk. For 30 years, every major new and launched all in 2014, is the story of successfully
product has been the result of quickly adapting the company combining the best of lean startups and deep corporate
to meet new business opportunities. advantages.

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 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

In 2013, another “surprise” Intuit customer behavior months, one team was assembled with the best ideas and
appeared. This time in the simple mobile personal finance team members from the whole innovation exploration.
app, Mint. Thousands of users were marking a majority
of their expenses as “OTHER”, instead of using the many While the competition was originally intended to discover
personal tracking categories available. By asking “why”, Intuit new product ideas, perhaps the greater takeaway was that
learned that self-employed contractors were using Mint’s the executive team leared a lot about the “lean” thinking
“OTHER” to track business expenses. They were creating a capabilities of various individuals in the competition. Chriss
big digital shoe box of “other” receipts that still needed to be explains, “There were some interesting ideas that came out of
sorted and re-categorized for taxes, but, at least, were now the competition, but it really highlighted the people that really
captured.6 wanted to do this and had the chops and the excitement.”

This fast growing self-employed market need was a big gap Small Company Drivers
in the Intuit product portfolio, between the new Mint mobile
personal app, and the entry level version of QuickBooks. The Once assembled, the bar for the new QBSE team was high.
Intuit team looked at two options. They could pull a great They had a short, three-month runway to get a viable product
cross-functional team together to create a new product to into the hands of customers. Chriss drove the team to deliver
launch in 2016, or they could create a real startup inside a minimum viable product that customers would value
Intuit. They chose the startup mode, with a few luxuries that enough to pay for, not just use.
only a large enterprise could provide. But they were careful
to strip away the weight, obstacles and handicaps that usually Twelve weeks later, the first version of QBSE was in the
come with the enterprise. hands of test users. Consumer feedback was rapid, thanks
to the tools the team had carefully integrated. The QBSE
A key challenge was finding people who were comfortable team took all user calls, emails, and questions, just like any
with risk, uncertainty, and speed. In any large organization, startup would. Feedback went directly to the entire team,
there is a bias towards existing products and existing from the leader to the programmers. With this intimate focus
methods. But, rather than hire “startup people” from outside, on listening to consumers, the flexibility to innovate new
Intuit created the space for entrepreneurs who already solutions, and the drive to deliver results quickly, the team
worked at Intuit to emerge. was able to iterate rapidly. As a result, over several months,
multiple software updates were released, sometimes twice a
To find these entrepreneurial-minded people, they cast a day.
wide net. “We started very broad and said, look anyone
who wants to come do this, can come do this”, explains At one point, a key hurdle to customer conversion emerged –
Alex Chriss, now VP & GM of the Self-Employed Solutions actually paying for the product. Just like what you would find
business unit of Intuit’s Small Business Division. They ended in a startup - but is unheard of in a large company - engineers
up with twenty teams of three to five engineers, product and team members bootstrapped a solution for their
managers and marketers who were set to compete against hundreds of customers. They manually updated customers’
each other in a six-week marathon. data for them, so that the customer immediately saw the
reports and functions they needed to convince them to buy
Every team had access to the same research, customers, the software. Instead of first building specifications, coding a
corporate code bases and tools, and each presented ongoing solution, and releasing a new module, the team accomplished
ideas and learnings to an executive selection team. Five of what needed to be done by brute force, the same day. The
the original twenty teams were then tapped to move forward fully integrated solution was delivered in week.
to refine their QBSE product ideas, and, after two more

Innovate Innovate
with skills QBSE Team
customers and fit “Funded”

Top 5 Teams Best fit and

20 Teams

6
16 “Run Like a Lean Startup Intuit.” Telephone interview with Catalant. 4 Jan. 2016.
 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

This rapid, intimate innovation would never have been

possible following standard corporate product development
cycles. The QBSE team had critical advantages of a lean
startup that few corporate product development teams
share:

1. Direct, constant, team-wide communication with customers.

2. A very short runway to deliver a revenue generating product.

3. Freedom to bootstrap solutions, measurement tools, and anything

else the product needed to stay alive.

“Give the team enough space and enough
autonomy to move as quickly as they can.
Big Company Ecosystem Advantage
But then, when the time is right, lean in
with the resources and the advantages
At the same time, the QBSE team had the critical advantages
of a large enterprise with a strong customer and product

ecosystem that few lean startups share:

1. A pool of 8,000 employees from which to pluck the best team.

2. Capital to pay salaries and rent during the runway (e.g. loss-making)
period.

3. A vast code base to leverage as needed. The QBSE team leveraged everything it learned about how
to be focused, flexible and fast, and brought those learnings
4. Existing integrations and relationships with almost every bank and to an entirely new team at Intuit. The two teams released an
credit card company. integrated tax package in just four months.

5. A brand name and ready customer base from which to solicit new With strong corporate support, clear mandates on customer
users. benefit targets, and a single-minded drive to deliver, a $4
billion enterprise launched a totally new product to a new
6. An established product distribution channel. customer base in twelve months.

7. A ready investor to take and grow the product as soon as it was From pharmaceuticals to software, sophisticated enterprises
proven. are learning that they need to leverage their size and muscle
strategically, and to get lean where it counts.
Leveraging these enterprise benefits is critical, says Chriss.
To effectively incubate a startup within an enterprise, it is They are getting out of their own way and finding
important for the enterprise to “give the team enough space concentrated ways to really focus on what customers and
and enough autonomy to move as quickly as they can. But new markets are telling them. They are breaking down walls
then, when that time is right, lean in with the resources and to allow their employees to be flexible, to innovate to cut
the advantatges that the company has and allow the startup failing products, and to deliver profitable solutions that meet
to truly accelerate.” current market demands. And they are unleashing the power
of teams, but stripping away the corporate distractions that
By September, the “bootstrapped” QBSE product, resulting cause tasks, projects and new business units to struggle
from a productive marriage between startup and corporation, under the typical demands of being a member of a large
was a success. Customers were signing up, importing their enterprise.
data, and paying the $9.99 monthly fee.
Other enterprises are embracing the projects as a surgical
Shortly after launch, the team realized that these same approach to getting focused, flexible, and fast, all across the
customers were going to take all of this organized data to a company, very quickly. At GE, employees are encouraged to
tax accountant in just four months. So, in September 2014, leverage internal and external entrepreneurs, specialists, and
the QBSE team met with the Turbo Tax team to ask if they fast pop-up teams to deliver on anything they need. This is
could work together to build a Turbo Tax integration product the rise of the freelance economy, leveraged to maximum
for QBSE that could be delivered by December of that year.

17
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

Innovative Projects

18
 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

Innovative Projects
Many enterprises who aspire to run with the speed and agility of a startup are focusing more granularly, driving efficiency and
innovation with new approaches at the project-level.

Namely, enterprises like GE are tapping into “The Global Brain”, internal and external experts and entrepreneurs from around the
world, to help them become more focused, flexible, and fast. Leveraging technology, an enterprise manager who wants additional
or new innovative ideas, different perspectives, or outside resources can mobilize these ideas in a matter of hours.

By leveraging external partners offering various levels of expertise and capacity—from technology through Catalant (where enter-
prises can access on-demand business expertise for project-based work) to micro-tasking with Fiverr and Mechanical Turk (where
armies of workers can be hired to do any anything from data entry to logo design)—a traditional team, armed with a small budget
and objective, can solve challenges quickly and effectively.

GE has been at the forefront of the this movement, and is learning that by leveraging this “Global Brain”, they are able to achieve
solutions faster and with additional customer feedback.

Case: GE Tapping Into the Global Brain

“The team has established partnerships with various talent marketplaces and crowdsourcing platforms to connect them with GE
teams to invent, analyze and implement new solutions.”

crowdsourcing platforms to connect them with GE teams to

invent, analyze and implement new solutions.

“A given GE stakeholder may not have the right resource, or the

time, to solve a problem they’re facing,” says Finkhousen, “or
they may just want an outside perspective to view the problem
from a different angle.”7

“It is impossible for anyone in the organization to have all of the

best ideas, so we’re leveraging open innovation, collaborative
Digital Industrial giant GE believes in innovation and has cele- innovation and crowdsourcing to collaborate with experts and
brated a successful innovation legacy for 130 years. In the last entrepreneurs everywhere who share our passion for solving
decade that belief was expanded even further, as GE resolved to some of the world’s most pressing issues.”
tap into “The Global Brain”—moving to open its R&D environment
to connect and collaborate with entrepreneurs outside the com-
pany to create new intellectual property, value and inventions.

Dyan Finkhousen heads the GE GeniusLinkTM team, responsible

for Open Innovation, Collaborative Innovation and Crowd- In the last year alone, the GeniusLinkTMteam has helped GE

sourcing, as part of GE Global Operations Commercial Shared teams improve the speed, cost, and quality of hundreds of

Services organization. Since 2013, the GeniusLinkTM team has projects across the company. Within these projects, they

been enabling internal GE employees to quickly and effectively improved product development speed and cost by up to

connect with internal and external expertise. The team has 40-50% and improved the speed and cost of market insights

established partnerships with various talent marketplaces and by up to 40-80% across the projects they have sourced and

managed.

7
“Run Like a Lean Startup GE.” Telephone interview with Catalant. 13 Jan. 2016. 19
 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

With partners like Kaggle - a data science and machine GE’s decision to make access to outside support available to
learning specialist network, and Catalant - a marketplace for everyone.
business expertise, the people across every business unit at
GE now have quick and seamless access to an expansive and In fact, in the last year alone, the GeniusLinkTM team has
impressive network of talent. “With Kaggle,” says Finkhousen, helped GE teams improve the speed, cost, and quality of
“we’re able to tap into industrial internet expertise that hundreds of projects across the company. Within these
can exponentially improve the solution sets we can make projects, they improved product development speed and cost
available.” by up to 40-50% and improved the speed and cost of market
insights by up to 40-80% across the projects they have
She explains that Catalant “has curated a community of sourced and managed.
consulting and business experts that is a good fit for the GE
team. They provide access to on-demand expertise that can The program has been so successful that GE is now opening
solve for a very diverse range of business priorities, including the service up to GE’s own clients.
planning, strategy, process optimization and more.” Catalant
has also launched a proprietary GE portal that allows any GE GE is taking advantage of rapidly evolving business models
employee to access the talent network simply by inputting and technology to rethink how it can operate with better
their SSO (single sign-on). In 2015, having completed speed and innovate more effectively. This means changing
several Catalant projects, and understanding the potential for the way they manage projects and product development
enterprise-wide impact both at GE and at other companies, internally--and also how they engage with the world to be
GE Ventures made an investment in Catalant, further focused, flexible and fast.
solidifying the partnership.

The GeniusLinkTM program began several years ago with

corporate sponsorship to experiment with the right way
to bring outside resources in. Working with early adopter
“clients” inside GE, the GeniusLinkTM team has built a portfolio
of case studies and a track record for success—leading to

Conclusion
Amgen, BASF, Intuit and GE are all companies that have recognized an opportunity to be more successful, more profitable, and
more relevant by leveraging lessons from lean startups.

Amgen brought in a team with a “lean bias” to re-orient the company’s focus to end results. BASF is using its breadth and network
to foster new ideas and innovation from its extended community. Intuit is harnessing its startup roots to remind its team that
“surprises” create opportunities, and then giving them the space to create. And GE is focused on leveraging “The Global Brain” to
get projects done quickly and effectively.

Each company took a very different approach, but all four are proving that the benefits inherent to a large enterprise, paired with
the focused, flexible, and fast capabilities of a lean startup, can lead to dramatic results for the company as a whole.

20
 ENTERPRISE

enterprise.Catalant.com

gocatalant.com
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