Even a giant can streamline, increase speed and encourage innovation.
General Electric (GE) has done this through making lean startup part of the mindset and the culture at the organisation, using a programme called FastWorks.
Leader of GE Culture and co-founder of GE FastWorks, Janice Sempe:
“We had a culture of being addicted to being right, … we had a culture of perfection. We didn’t know how to partner with our customers and see their problems from their perspective.” “We had to train our leaders to lead in a different way. We had to get them to ask questions in place of provide answers.”
Often our focus is on activity, or getting things done. If we shift the focus from customer requirements confusion to customer validation, to building a minimum viable product and then pivoting, to learning as we go along, we get better product to market more quickly. In place of having thinly spread teams, GE builds dedicated teams. These teams are fast, and focused. Using FastWorks, GE has successfully introduced lean startup principles in a non-tech environment, and in a highly regulated industry.
Based on the lean startup methodology principles of Eric Ries, creator of the Lean Startup methodology, FastWorks is essentially a set of tools and practices designed to build better products for customers, more quickly. There are 100s of FastWorks programmes across GE. FastWorks decreases the cycle time for product development. GE uses it to get closer to customers, to encourage innovation, increase speed to market, improve chances of success, and, generally, to make it easier to get things done.
Sempe shares the challenges and tangible successes that GE has driven through creating a culture of experimentation in the podcast interview How An Enterprise Makes Lean Startup Part of The Mindset And Culture. These kinds of successes she notes are about a lot more than training. You have to think more broadly about your organisations ability, in terms of its behaviours and cultures, to support the application of a lean startup approach. This is more than giving permission to fail, it is asking the questions: What new skills are needed and can be developed? Will new behaviours required be rewarded? How will our performance management system support this? What are the new expectations we have of employees?
At GE, 5 new belief statements were introduced. They wanted to think about failure in a different way, and to reframe barriers, giving permission for people to accept and adopt new ways of thinking and acting. Not meeting an outcome is a great way of getting to a better solution. You learn as you go along. The bold GE statements are:
- Customers determine our success
- Stay lean to go fast
- Learn and adapt to win
- Empower and inspire each other
- Deliver results in an uncertain world.
The GE performance management system has also been reworked, from a linear process of setting and measuring goals at the start and end of each year, to an on-going process that encourages asking the right questions. It allows for adaption. Employees are expected to experiment and pivot based on what they are learning from their customers.
It would be naïve to think that an organisational change like this is easy. Sempe says they are learning as they go, and she admits that it is hard. There has been considerable commitment to the programme. In the first year of implementation, Ries trained around 1000 GE executives on Lean Startup. There are also numerous coaches in the organization. But the results are tangible. Sempe offers two proof points in her interview:
- A new product (an engine) getting to market 2 years ahead of competitors with significant cost savings to the company, positioned very well with customers as a result, by using FastWorks principles;
- An efficient low cost energy solution for their power and water business, development costs were reduced by 60% by using the principles of FastWorks.
The Singularity Hub describe FastWorks as part of the company’s Mindset Orientation, or MO, one of 8 principles for leaders to make the most of the exponential age. It is worth reading the article to find out what the other 7 are.
What is your organization’s mindset orientation? What commitment is there to learning and adapting faster than the change that’s happening around you?