When practising lean in a corporate environment your first customer is your CEO. Well that was one of the take-aways from last week’s Lean Startup Conference, a point not so much articulated on stage as it was in the hallways and breakout rooms of the Masonic Centre where the conference was held. It’s not to suggest that companies create products for their CEO’s, but rather that implementing lean thinking in large organisations requires the support from the top down.
GE is a perfect case in point, billed at the conference as the biggest implementation of lean in the world. With 300,000 employees and $147 billion in revenues it’s not a trivial statement for a 130-year-old company to make, and there was some to-be-expected “eye-rolling” and cynicism at the thought of GE teaching startup people about lean. But here’s the thing: they are doing it, and they have for all the evidence assembled, truly embraced it.
GE claims to have 100 products in the pipeline that it has developed using the lean startup method, with its first, a fridge or French door bottom-freezer refrigerator to be precise, going on sale this week. At its launch, lean was as much in the spotlight as the new fridge. “[With lean manufacturing,] we’re creating a culture of collaboration and improvement that is at the heart of the resurgence in U.S. manufacturing,” GE Appliances CEO Chip Blankenship said. “With lean manufacturing… we can compete and win against anyone in the world.”
Ries started working with GE two years ago where he helped them to create a “Fastworks” program (a set of tools and behaviours designed to deliver better outcomes for customers faster) and implement Lean Startup groups across all major GE branches. The change did not just stop at consumer facing products but went across all process driven departments too, affecting accounting, legal, HR etc. “If there’s a function in GE, we have touched it,” Ries said. Ries now trains coaches whose full-time job is to help sections of the company use and refine lean startup methods.
So how did a company like GE come to embrace lean in such a loving way?
The interest came from the top. Here lies the key to its success in embracing lean startup methods.
It was in 2011 when some of GE’s executives met Ries at an event where Ries was talking. GE’s Executive Director of Global Innovation Stephen Liguori admits that during Ries’ talk he asked himself, ‘Why are we listening to this kid?’ But something piqued his interest and he became convinced that some of the lessons of lean startups could apply to big business. They started working with Ries, who says that he’s always been greeted with open minds (and quick go-aheads!) to make things happen. At first Ries just ran workshops in some parts of the company, but they were inspiring enough that word started traveling up the ranks, and eventually GE’s CEO Jeff Immelt got on board with the idea. But in order to make it work Immelt needed to convince all the company’s executives; not a small feat when you consider there are thousands. Ries himself said that that without such support from GE CEO Immelt and other executives, there’s no way GE could have undertaken such an extensive program.
As Pando points out, “if the giant, multi-year innovation experiment goes well, it will serve as a case study for corporations looking to keep their creative edge in a rapidly evolving world.” Indeed. For now though, GE stands as a pretty good case study that lean can be done on a large scale in a huge, corporate company. The key seems to be convincing those at the top. I guess that’s a cue to learn, build and measure what works to convince your CEO.