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
Info@GoCatalant.com

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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.”
Amgen is a $115 billion, 35 year-old, publically traded
biotech company that sells some of the world’s most
successful drugs and therapeutic biologicals.
And it wants to be lean.
Three years ago, Amgen created the Advanced Device
Technology team with a mandate to leverage lean
principles in order to understand its portfolio and drug
delivery needs, and to match those needs to technologies
best suited to drive value for Amgen as a whole.
Amgen’s Dr. Shawn Davis, Principal Engineer of Device
Strategy, calls the skills and thought processes this eight-
person team is injecting a “startup bias.” With this new
approach to product innovation and device strategy, the
team is focused on what is good for the customer and
for the company overall, not just what is good for each
product.
Ruthless Priorities
According to Davis, a startup veteran, many large biotech
companies fund investments on a product-by-product
basis, which distorts the focus on the core goals of
the broader company. “When each team is focused
on the time cycles and investments required for their
own product, they can’t see the trade-offs of company
resources against other opportunities, so they are not
maximizing the whole company’s value.”1
According to Davis, Amgen’s Advanced Device Technology
team is inserting the “ruthless priorities” of a startup into
its efforts, with a focus on critical items for the company
overall and a tighter runway to profitably deliver more
effective products to customers.
8 3
“Run Like a Lean Startup Amgen.” Telephone interview with Catalant. 11 Dec. 2015.
“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,
timeline, and outcome factors, Amgen can determine the
best overall portfolio, and the best use of resources.
Lean companies make tradeoffs each day in an effort
to maximize total company value. If large enterprises
can bring that kind of clarity and discipline to their own
decision making processes, they can realize the same
benefits.
A Lean Bias Frame – Changing Your
Approach to Risk
One of the greatest challenges the Amgen team faces in
driving innovative thinking is changing risk biases.
“In a big company, if you take a risk that makes the
company a billion dollars, you get a pat on the back and a
promotion. If you take a sound risk that costs the company
a billion dollars, you expect to be fired,” says Davis. In
theory, he explains, the company benefits by taking
balanced risks to improve the overall portfolio of results,
but individuals generally don’t feel safe taking risks that
could threaten their job security.
There are two ways to tackle this hurdle, and Amgen is
pursuing both. The first is to hire people with a greater
risk-taking profile, as they have with this new team.
The second is to make risk-taking more celebrated
and rewarded. The Advanced Device Technology team
serves as a role model within Amgen, as a way to create
a safer, more encouraging workplace where budding
entrepreneurs and risk-takers feel welcome. Davis admits
that changing a company’s risk biases is extremely hard,
and that it is critical for management to back up the shift
with follow-though and support for this to happen.
 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

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

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
core targets, flexible enough to learn and innovate, and fast
enough to capture markets.
inside or outside your company, tells you what you really need
to know.”4 Customer feedback gets massaged to look good,
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.”
Some enterprises try to act lean, and some try to buy or
outsource lean. In contrast, BASF is using big to be lean.
Their BASF Creator Space™ approach is a brilliant use of
big company resources leveraged to mine and nurture new
ideas, and it is letting BASF break through all of the traditional
barriers that stop enterprises from hearing what is going on
around them.
To celebrate 150 years of making chemicals for every
imaginable use around the world, BASF did something truly
innovative. This $82 billion giant launched the BASF Creator
Space™, a program in which employees from across regions,
divisions and research platforms worked with customers,
scientists, thought leaders, institutions, students and
communities to understand why some of the world’s biggest
problems around food, energy and urbanization aren’t being
solved.
And then they listened.
Innovation from the outside in, on a global scale, using
the best thinkers in the world, is something only a large
enterprise can do. And it is the epitome of employing “lean
innovation” inside an enterprise to identify, test, and develop
big solutions to big problems.
According to Elise Kissling, Director of Creator Space™, BASF
is re-thinking what it means to be innovative, and looking
at not only chemical innovations, but at market driven
innovations to address societal needs and pain points.5
As the world’s leading chemical company, BASF is far up
the value chain from the end consumer, as it supplies
chemicals and materials to the manufacturers who, in turn,
make the products that consumers buy. Therefore, in order
to get closer to the end users of its products and systems,
BASF devised a yearlong “open innovation” program to
12
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
leading universities and institutes,” says Kissling, “but with
our new strategy we wanted to move in the direction of open
innovation and co-creation in order to innovate in ways that
are more relevant to our target groups. And to be faster!”
Described by Kissling, ‘open innovation’ is the process
by which a company brings outside ideas and thinking
into its own innovation process by inviting collaboration,
crowdsourcing or teaming with partners to form joint
innovations. “Co-creation is a method you use to get there,
especially in face-to-face interactions,” explains Kissling.
So the company looked to lean startups for inspiration. They
developed a vast and global “open innovation” project to
meet, listen to, learn from, and collaborate with partners and
end users. “We knew that co-creation and open innovation
were very popular in the B2C space,” says Kissling, “so we
thought it would be great to adapt those methods and
approaches for our B2B environment.”
And BASF reinvented “startup open innovation” to meet
the needs of the global enterprise, using all of its innovation
credibility, local market expertise, corporate event
management teams and substantial resources, to conduct
a CEO-mandated, yearlong “experiment” into new learning
methods. It was critical, according to Kissling, that CEO
Kurt Bock frame the project as one of experimentation and
learning so that the entire team felt the freedom to takes
risks and be receptive to new ideas. Even some co-creation
skeptics were won over after having the opportunity to be
part of successful collaboration, in person.
BASF’s Creator Space™ was broken down into around 50 co-
creation activities run by people from across the company’s
divisions and functions. Local thought leaders and value
chain partners tackled local challenges in six regional tours.
Taking their cue from best practice inside and outside of the
5
“Run Like a Lean Startup BASF.” Telephone interview with Catalant. 1 Feb. 2016.

company, the Creator Space team tailored eight co-creation
methods to BASF’s B2B environment and piloted these
methods in 2015.
From that work, more than 60 non-routine project proposals
are now being evaluated by BASF, and many others are
already being implemented by the business units.
At the New York regional tour, for instance, dozens of
outside contributors (designers, urban planners, developers,
construction industry customers, etc.) focused on the
flooding caused by Hurricane Sandy and came up with three
completely different approaches for how to protect future
cities from rising sea levels. These approaches now form a
foundation for product and business model innovation at
BASF from flood barriers to redesigned city blocks.
At the agriculture division, a new business model idea
that bundles products and services with risk management
components was developed. To see if the new offering was
viable, rather than taking several years to polish it and create
all new marketing material, a few innovative sales people
piloted the offering with 15 customers to test it before rolling
it out more broadly.
Stakeholder
>1,000 ideas
10,000 external and
internal people involved in
4.5 million online visitors
12,500 users discussed online
900 joined in-class trainings &
500+
Concepts
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
The project team had weekly meetings directly with sales
people and customers to see what was working and what was
not, and the prototype was modified based on the feedback.
Both the final offering as well as the target customer
segments changed dramatically during the lean start-up
phase.
“This is a new approach for BASF,” says Kissling. In addition to
sourcing innovative ideas from outside the company in order
to stay close to the customer, BASF is “using Lean Innovation
methods that startups use to do prototyping and piloting so
teams can learn on fly before we go into full scale roll-out.
The feedback on the ground is that we haven’t invested that
much because we piloted with a few customers and we now
have a much better product than we would have if we had
used the process we normally do.”
By looking to lean startups, BASF is attempting accelerate
growth with new products, business and partnership models.
Getting there requires a top-down and a bottoms-up focus
on real customers, real problems and real pain points. In one
year, BASF has made major strides in learning how it wants to
approach its next 150 years of innovation.
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.
Results
100+
projects for direct
(short and mid-term)
67
landmark proposals
(short and mid-term)
Immediate wins with
(short and mid-term)
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 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

Flexible Case Study: Leveraging

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

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

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 HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP

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

Intuit continued working closely with customers and tweaking

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

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
appeared. This time in the simple mobile personal finance
app, Mint. Thousands of users were marking a majority
of their expenses as “OTHER”, instead of using the many
personal tracking categories available. By asking “why”, Intuit
learned that self-employed contractors were using Mint’s
“OTHER” to track business expenses. They were creating a
big digital shoe box of “other” receipts that still needed to be
sorted and re-categorized for taxes, but, at least, were now
captured.6
This fast growing self-employed market need was a big gap
in the Intuit product portfolio, between the new Mint mobile
personal app, and the entry level version of QuickBooks. The
Intuit team looked at two options. They could pull a great
cross-functional team together to create a new product to
launch in 2016, or they could create a real startup inside
Intuit. They chose the startup mode, with a few luxuries that
only a large enterprise could provide. But they were careful
to strip away the weight, obstacles and handicaps that usually
come with the enterprise.
A key challenge was finding people who were comfortable
with risk, uncertainty, and speed. In any large organization,
there is a bias towards existing products and existing
methods. But, rather than hire “startup people” from outside,
Intuit created the space for entrepreneurs who already
worked at Intuit to emerge.
To find these entrepreneurial-minded people, they cast a
wide net. “We started very broad and said, look anyone
who wants to come do this, can come do this”, explains
Alex Chriss, now VP & GM of the Self-Employed Solutions
business unit of Intuit’s Small Business Division. They ended
up with twenty teams of three to five engineers, product
managers and marketers who were set to compete against
each other in a six-week marathon.
Every team had access to the same research, customers,
corporate code bases and tools, and each presented ongoing
ideas and learnings to an executive selection team. Five of
the original twenty teams were then tapped to move forward
to refine their QBSE product ideas, and, after two more
Innovate
with
customers
Top 5 Teams
20 Teams
16
months, one team was assembled with the best ideas and
team members from the whole innovation exploration.
While the competition was originally intended to discover
new product ideas, perhaps the greater takeaway was that
the executive team leared a lot about the “lean” thinking
capabilities of various individuals in the competition. Chriss
explains, “There were some interesting ideas that came out of
the competition, but it really highlighted the people that really
wanted to do this and had the chops and the excitement.”
Small Company Drivers
Once assembled, the bar for the new QBSE team was high.
They had a short, three-month runway to get a viable product
into the hands of customers. Chriss drove the team to deliver
a minimum viable product that customers would value
enough to pay for, not just use.
Twelve weeks later, the first version of QBSE was in the
hands of test users. Consumer feedback was rapid, thanks
to the tools the team had carefully integrated. The QBSE
team took all user calls, emails, and questions, just like any
startup would. Feedback went directly to the entire team,
from the leader to the programmers. With this intimate focus
on listening to consumers, the flexibility to innovate new
solutions, and the drive to deliver results quickly, the team
was able to iterate rapidly. As a result, over several months,
multiple software updates were released, sometimes twice a
day.
At one point, a key hurdle to customer conversion emerged –
actually paying for the product. Just like what you would find
in a startup - but is unheard of in a large company - engineers
and team members bootstrapped a solution for their
hundreds of customers. They manually updated customers’
data for them, so that the customer immediately saw the
reports and functions they needed to convince them to buy
the software. Instead of first building specifications, coding a
solution, and releasing a new module, the team accomplished
what needed to be done by brute force, the same day. The
fully integrated solution was delivered in week.
Innovate
skills QBSE Team
and fit “Funded”
Best fit and
6
“Run Like a Lean Startup Intuit.” Telephone interview with Catalant. 4 Jan. 2016.

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.
Big Company Ecosystem Advantage
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.
4. Existing integrations and relationships with almost every bank and
credit card company.
5. A brand name and ready customer base from which to solicit new
users.
6. An established product distribution channel.
7. A ready investor to take and grow the product as soon as it was
proven.
Leveraging these enterprise benefits is critical, says Chriss.
To effectively incubate a startup within an enterprise, it is
important for the enterprise to “give the team enough space
and enough autonomy to move as quickly as they can. But
then, when that time is right, lean in with the resources and
the advantatges that the company has and allow the startup
to truly accelerate.”
By September, the “bootstrapped” QBSE product, resulting
from a productive marriage between startup and corporation,
was a success. Customers were signing up, importing their
data, and paying the $9.99 monthly fee.
Shortly after launch, the team realized that these same
customers were going to take all of this organized data to a
tax accountant in just four months. So, in September 2014,
the QBSE team met with the Turbo Tax team to ask if they
could work together to build a Turbo Tax integration product
for QBSE that could be delivered by December of that year.
HOW TO RUN YOUR ENTERPRISE LIKE A LEAN STARTUP
“Give the team enough space and enough
autonomy to move as quickly as they can.
But then, when the time is right, lean in
with the resources and the advantages
The QBSE team leveraged everything it learned about how
to be focused, flexible and fast, and brought those learnings
to an entirely new team at Intuit. The two teams released an
integrated tax package in just four months.
With strong corporate support, clear mandates on customer
benefit targets, and a single-minded drive to deliver, a $4
billion enterprise launched a totally new product to a new
customer base in twelve months.
From pharmaceuticals to software, sophisticated enterprises
are learning that they need to leverage their size and muscle
strategically, and to get lean where it counts.
They are getting out of their own way and finding
concentrated ways to really focus on what customers and
new markets are telling them. They are breaking down walls
to allow their employees to be flexible, to innovate to cut
failing products, and to deliver profitable solutions that meet
current market demands. And they are unleashing the power
of teams, but stripping away the corporate distractions that
cause tasks, projects and new business units to struggle
under the typical demands of being a member of a large
enterprise.
Other enterprises are embracing the projects as a surgical
approach to getting focused, flexible, and fast, all across the
company, very quickly. At GE, employees are encouraged to
leverage internal and external entrepreneurs, specialists, and
fast pop-up teams to deliver on anything they need. This is
the rise of the freelance economy, leveraged to maximum
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-
sourcing, as part of GE Global Operations Commercial Shared
Services organization. Since 2013, the GeniusLinkTM team has
been enabling internal GE employees to quickly and effectively
connect with internal and external expertise. The team has
established partnerships with various talent marketplaces and
In the last year alone, the GeniusLinkTMteam has helped GE
teams improve the speed, cost, and quality of hundreds of
projects across the company. Within these projects, they
improved product development speed and cost by up to
40-50% and improved the speed and cost of market insights
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
learning specialist network, and Catalant - a marketplace for
business expertise, the people across every business unit at
GE now have quick and seamless access to an expansive and
impressive network of talent. “With Kaggle,” says Finkhousen,
“we’re able to tap into industrial internet expertise that
can exponentially improve the solution sets we can make
available.”
She explains that Catalant “has curated a community of
consulting and business experts that is a good fit for the GE
team. They provide access to on-demand expertise that can
solve for a very diverse range of business priorities, including
planning, strategy, process optimization and more.” Catalant
has also launched a proprietary GE portal that allows any GE
employee to access the talent network simply by inputting
their SSO (single sign-on). In 2015, having completed
several Catalant projects, and understanding the potential for
enterprise-wide impact both at GE and at other companies,
GE Ventures made an investment in Catalant, further
solidifying the partnership.
GE’s decision to make access to outside support available to
everyone.
In fact, in the last year alone, the GeniusLinkTM team has
helped GE teams improve the speed, cost, and quality of
hundreds of projects across the company. Within these
projects, they improved product development speed and cost
by up to 40-50% and improved the speed and cost of market
insights by up to 40-80% across the projects they have
sourced and managed.
The program has been so successful that GE is now opening
the service up to GE’s own clients.
GE is taking advantage of rapidly evolving business models
and technology to rethink how it can operate with better
speed and innovate more effectively. This means changing
the way they manage projects and product development
internally--and also how they engage with the world to be
focused, flexible and fast.

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

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