Today, companies are continuously facing disruptive effects from several directions – disruptive technologies, new low-cost market entrants, globablization, and changing regulatory landscape. Steve Blank discusses Lean Innovation Management and how it’s the antidote to continuous disruption.
What is Lean Innovation Management
Lean Innovation Management is a way for established companies to organize and act on innovation at the speed of startups. It takes all the tools that startups have kind of now adopted in the last 10 years: Business model design, customer development, agile engineering, all the components of lean, minimal viable products, adopting pivots is kind of a natural course of doing innovation. And the benefits for a company is it allows companies to experiment with 10 times the number of initiatives in about a fifth of the amount of time. It kind of gets mojo back to innovation for large corporations..
Every company now is dealing with what’s called continuous disruption, disruption from globalization, that is China as a manufacturer, China as a customer. Lower barriers of entry for competitors, it’s now 1,000 x less expensive to build a software company than it was in the 1970s. Changing regulatory regimes just seem to be happening faster and faster. Diminishing power of brands -- Internet allows new entrants to kind of disrupt the investment on brands.
All of these things kind of add up to kind of disruptions which means companies can no longer depend on the rules that worked in the 20th century. In fact, if you graduated from business school more than five years ago, most of what you learned is obsolete, including the stuff I used to teach longer than five years ago.
In fact, following the Jack Welsh rules, which were the golden standard from GE, which was brilliant advice for the 20th-century, actually could put you out of business in the 21st.