What Culture Supports a Lean Startup Approach?

Today I was fortunate to have the opportunity to sit in on a webinar titled Bringing Lean to Established Companies by lean startup gurus Eric Ries, Brant Cooper, and Patrick Vlaskovits. The webinar was not about bringing Lean per se but rather the lean startup approach to established companies. By “established companies” the speakers meant “non-startups” which includes organizations that may or may not have begun practicing Lean within their organizations, may or may not be succeeding with Lean, and were based on their experience with Fortune 100s. There were more than 600 participants from around the world, many good questions, and too little time to answer them. The organizers promised to post the webinar audio on their website and answer additional questions through their blog.

Although I am paraphrasing from memory and the curious reader is encouraged to check the audio of the webinar, one of the questions answered was, “What type of culture supports a lean startup culture?” The answer was a combination of “no cultures are naturally fit” and “any / all cultures can adopt lean startup practice”. Eric Ries commented that cultural artifacts are the result of the processes in an organization, that in established companies these behaviors and practices limited risk-taking, experimentation etc. in favor of making the numbers, and this needed to change for lean startup to thrive. Brant Cooper commented on the fact that this type of culture change happens as people experience success with lean startup and create belief in the new ways of working. My co-authors and I make largely the same point, somewhat more at length, in our new book about kaizen cultures.

Another answer to the question, “What culture supports a lean startup?” could have simply been “adaptive cultures”. Proposed as a result of a study of 207 companies by Kotter and Heskett, the companies they characterized as “adaptive” outperforme the “nonadaptive” ones by 4X in revenue growth, 700%+ to 1% in profit growth. The beliefs and behaviors of adaptive cultures include

  • Having an outward focus, humility, curiosity
  • Leaders and managers caring deeply about all stakeholders
  • Valuing changes as opportunities
  • Encouraging broad and deep leadership and initiative
  • Taking intelligent risks

In contrast, nonadaptive organizational cultures exhibit the following behaviors

  • Having inward-looking, arrogant, political
  • Caring mainly about themselves, their projects, products or clique
  • De-valuing changes or seeing them as threats
  • Being bureaucratic, political, regimented
  • Avoiding risk, setting policies to limit experimentation and initiative

Academics, authors, consultants and business leaders have been tackling the question of organizational culture and its effect on long-term success in various ways for decades. Only recently have people begun to find practical, day-to-day ways to bring about culture change while also getting the work done and delivering results. Implemented properly, rather than as a shiny new tool set to be focused within specific organizational silos, kaizen -> Lean does this.

Organizations, regardless of their place in the lifecycle of a business from startup to established company, are all collections of people who have beliefs, feelings, needs and behaviors. As a result from a cultural and behavioral point of view they end up looking quite similar regardless of country, product, technologies used or demographic makeup of the organization. Business is a human endeavor, and the changing of organizational culture even more so. The lean startup approach can be an excellent catalyst to both help start off early stage companies in building adaptive cultures and in helping shift established companies towards more adaptive cultures.