Product Management

4 min read

How to Apply Lean Principles to Enterprise Product Development

Setting up a fleet of landing pages and judging success by how many people sign up for your waiting list before cranking out a barely functional MVP to test the market seems like a really fun way to see if your ideas have any market potential. But those Lean Methodology tricks are for dorm room wannabe entrepreneurs and scrappy startups that can afford to “fail fast” and stumble upon the perfect product-market fit through trial-and-error.When you’re in an enterprise environment, those tactics won’t work, right? You have to worry about your company’s reputation! You can’t mislead customers or tarnish your brand! And, oh, all of the approvals you need before updating the corporate web site or reallocating development resources to a new initiative! While you’re probably right that you can’t go from whiteboard to beta testing in a matter of days, there are actually plenty of lean principles that can be applied in an enterprise environment.

What Exactly Does Lean Mean Again?

Let’s run through the five principles of Lean Methodology:

1. Identify Value

In this case we’re talking about customer value and not the value to your firm.“Value is determined by the customer in the act of paying for a product,” says lean startup coach Tristan Kromer. “That payment may be in terms of cash, their time spent, private data freely given, or any other means, but payment is the ultimate arbiter of value.”In short, what is important to your customers and how are you addressing it?

2. Map the Value Stream

Here the focus is mapping out every step of the product development process and eliminating any steps that aren’t adding value. Remember, your customers’ time is their money, and they don’t want to be spending it on things that aren’t helping them achieve their goals. Therefore, you want to reduce anything you can that’s not creating real benefits (think: product features).

3. Create a Flow

lean principles enterprise product development

Next you want every step to happen as quickly as possible—since you’ve already eliminated any unnecessary steps, now it’s all about making what remains as efficient and fast as possible.

4. Establish Pull

Now you can start to get greedy and try to reward customers even earlier in the process by figuring out how you can deliver benefits faster by anticipating what the customer will want or need next based on what they have already done.

5. Seek Perfection

This is the rinse and repeat portion of the program. Lean development is all about making a process happen as quickly and efficiently as possible, which means eliminating any wasted time, steps, cost or effort. No matter how great a job you have already done, there’s always room for improvement.This is also a great principle to keep in mind when many are tempted to “improve” their product by adding things to it. While there may often be valid reasons to augment products with new features and functionality, there are just as many cases where something extra was added that has questionable value and may actually slow down the lean machine you’ve just worked so hard to create.Think of this lean principle as the antidote to feature bloat.

Making Lean Development Work in an Enterprise Environment

While “The Lean Startup” gets most of the headlines, large and established companies can always benefit from a dose of lean thinking as well…it did start at Toyota after all. But Lean principles can help your company move faster and smarter toward giving customers what they want.“In enterprise, lean works, but it takes more patience, rigor, and flexibility, says William Hsu of Mucker Capial. “Early product market fit is just that – early. Until the product has crossed chasm – it hasn’t...Initial product market fit only buys an option to play in the big leagues where old games are still played by old dogs.”So since you’re probably not in a position to completely change how your entire company operates, there are smaller steps you can incorporate into your everyday product management approach.

1. Don’t Assume You Know Your Customer Because You’re Enterprise

Enterprise solution developers often think they know what their customer wants just because they’ve been successfully selling them other things for years. But lean has taught us that those types of assumptions are costly and dangerous to firms of any size or vintage.“It starts with the creation of assumptions which have to be validated with the customer. Once we know what the end-user needs, we are certain that what we build is a satisfactory answer to his needs,” says Peter Horsten of Goyello. But because your company is in a position to have real conversations with real customers, you don’t need to actually build the MVP to see if you’re addressing legitimate needs and pain points. “No need to wait with validating the solution till the solution is ready!”In short, if the customer’s not interested in what you’re thing is trying to do, then it doesn’t matter how awesome that thing does it.“There is no point perfecting something that nobody wants. Set a deadline for customer contact. Stick to it. Test and learn and go again,” says Richard Poole of Fluxx. “If you’re worried about quality, launch a good, small thing — but launch something. You’ve achieved exactly nothing until you’ve launched a product to customers.”

2. Start with User Experiments

Larger firms don’t get the option to get wild and throw half-baked products into the market to see what happens, and product managers certainly don’t get skunkworks engineering teams to code up working prototypes of their fabulous ideas. But you can use lean methodologies to test your theories and gather customer response to your ideas.“The key is that product managers simply need to apply lean methodologies to experiments rather than product launches. They need to generate user feedback off of simulated prototypes earlier in the lifecycle, long before code is written. But other than that, the same principles apply,” says Nis Frome of Alpha UX. “As consumers’ expectations continue to rise, product managers need to make it their business to foster a culture that puts the user at the center of their operation. That’s what lean is all about no matter how big or small your company.”

3. Minimize Bureaucracy

Rapid prototyping, testing, improvement, and iterations are key to making lean work, but your organization must be on board with the pace and aligned accordingly.“To be a lean enterprise, silos must be broken down into a single team capable of (in)validating a hypothesis,” Kromer says. “If there are handoffs, approval committees, brand police with ‘do not pass go’ stamps, and legal sharks waiting to veto, you’re still in waterfall.”While you probably can’t forgo all of the formalities, work with the various stakeholders to see which parts of the process can be more fluid and reactive while still giving everyone confidence that things won’t escape the mother ship without the appropriate sign offs.Tweet this: Applying lean to enterprise product dev: see “which parts of your process can be more fluid and reactive.”

4. Identify and Eliminate Waste

eliminating waste from enterprise product development in lean methodology

No one wants to waste time, money, or resources, yet it plagues even the best intentioned operations. Often, it’s because it’s hard to recognize when you’re dealing with bits instead of widgets."When you go on to a manufacturing floor, you can see waste (in the form of) excess inventory or defects, you can see the rework (and scrap) or you can see (the problem with) transportation issues," says Katherine Radeka of Whittier Consulting Group. "The challenge in product development is that you don't have physical objects floating around - it's about the flow of knowledge and information. Therefore, waste is harder to see."But even when you’re on the lookout for it, if you’re not taking a customer-centric approach, you’re unlikely to spot what’s unnecessary.“We wanted to emphasize that the lean concept of waste, which is anything that is not value added, depends completely on defining what is value added and value added can only be defined from the customers' point of view,” says Jeff Liker, author of The Toyota Way. “If you don't really understand your customer, you have no way of prioritising what is value-added and what is waste.”

5. Remember that Perfection Takes Time

Lean methodologies can work just about anywhere, but it’s seldom an overnight transition and there are a number of “have to do” items that established enterprise firms simply can’t skip. So remember that it takes time and planning to find where in your organization you can align with lean principles — perfecting things is your last step.

Heather McCloskey