How SMEs Can Implement this Lean Startup Method
The participants of our 8th InnovationCamp were amazed when they realized in the kick-off meeting that they all face similar innovation challenges, despite different industries and company sizes:
- How can medium-sized companies remain agile?
- How can innovations be implemented more quickly and turned into products ?
- How can a willingness to change be cultivated throughout the workforce?
Most entrepreneurs today realize that there is no way around investing in innovation and change. If you want to equip your company for the future, you not only need to know how to find new, digital business areas and develop ideas for innovative products, but also how to turn innovations into products more quickly. And most SMEs still have some catching up to do in this area.
According to the KfW SME Panel, innovation activity among German SMEs was already in decline before the pandemic, and most recently stood at just 19% in 2018. The uncertainties of the corona crisis have significantly reduced the willingness to invest in innovation. 25% of all SMEs have cut back their innovation activities in the first 6 months of the crisis.
Why companies often fail to implement innovations
Even companies that already invest in innovation and plan to continue to do so often fail to find the right process and cultivate an innovation culture.
Our innovation coach Andy Switky knows why many established companies fail to implement innovation:
- Companies too often think they already know everything about their customers because they rely too much on existing data.
- They struggle to integrate new ideas and products into their business processes because decision-makers and stakeholders are often not involved in the innovation process.
Andy Switky is a Silicon Valley veteran who has been advising companies around the world for over 20 years on how to set up and implement their innovation processes. Before starting his own company, Code Name Collective, in 2015, he spent 16 years as a design thinking expert at Silicon Valley’s flagship agency IDEO.
“Get rid of your ego and accept that you will fail!”
Lean Startup and Design Thinking are no longer foreign words in German SMEs. But what it ultimately comes down to is admitting that even hundred-year-old traditional companies still don’t know everything about their customers, that they need to show more courage to conduct quick experiments and that they should be prepared to fail.
Why prototyping?
And this is where prototypes come into play. A quick draft (even if only on paper) of a new idea that can be immediately tested on users shows whether the solution is needed at all (= validation). Through testing and iteration, the solution can be developed while it is refined. This saves costs, time and brings valuable insights into customer needs and behavior.
“The sooner we fail, the sooner we will succeed!” and this is exactly the secret of Silicon Valley. The application of Lean Startup methods coupled with the American mentality of “let’s just do it and see what happens” brings success to so many companies in implementing innovation.
A little tip: you can build a prototype for any idea. Whether it’s a physical product, business idea, service, software or process, the simplest prototype is just a story.
Two strategies SMEs can use to integrate prototyping
But how can traditional companies with entrenched structures become more agile and integrate prototyping into their business process?
Andy Switky cites two strategies that have proven effective in his years of experience with companies around the world:
- Namawashi – building consensus
- Getting cultural resistance out of the way
Nemawashi
Nemawashi is a Japanese term that literally means “working at the roots.” It is a consensus-building technique that aims to remove barriers to proposal approval by seeking an informal meeting with decision makers before holding a formal meeting.
Innovators can present their ideas to leadership early in the prototyping process in informal meetings to gain buy-in support and have leadership participate in the iteration process.
Advantages of Nemawashi
- Prior engagement with decision makers makes it easier for them to understand the details of the proposal.
- Increases enthusiasm and commitment during the implementation phase because everyone has been brought on board.
- Reduces the likelihood of future conflict, as all difficult issues should be resolved by the time the project is implemented.
- Meetings to make decisions become more efficient and cause less conflict because everyone has a good understanding of the proposal.
- Even if projects are rejected, the innovator understands the reasons and doesn’t feel discouraged to try to implement an innovation again next time.
Removing cultural barriers
However, the successful implementation of innovation also depends on the company’s management level. Fostering innovation culture and teams includes, in particular:
- Learning new methods, processes and tools
- Tolerance for ambiguity
- Cultivating interdisciplinarity
To ensure that the spirit of innovation is not hindered or even completely prevented by the existing corporate culture, innovation teams should ideally be able to work detached from existing structures and be encouraged through regular training, sufficient management support and the creation of incentives.
Hungry for more?
Are you also trying to establish innovation processes in your company and need help with the implementation? Together with our Silicon Valley mentors, we are here for you and can help to prepare your company for the future by providing inspiration & best practices, teaching methodology and networking.
Send us an email, follow us on LinkedIn and get new information about our program and other Innovation Solutions services.
