Lean Scaleup™

The Lean Scaleup provides the thinking tools and actionable Best Practices on how to design an effective end-to-end process for business building.

Almost every company uses a framework that builds on the Lean Startup –overemphasizing the early stages, undervaluing the corporate context, and focusing on building products, not businesses. The Lean Scaleup helps you to steer clear of these pitfalls.

The Lean Scaleup framework is fit for your ambition. If you build product-based or data-driven businesses, it will provide you with the relevant guidance. If your goal is to build Digital service-based businesses, it helps you to start with the Customer Experience and “working backwards,” as Amazon calls its business building approach.

And finally, the Lean Scaleup helps to create clear stage transitions with gates that have the right altitude. For example, early-stage customer interest without “skin in the game” is not good enough and your venture should not scale up after the first customers – typically, the organization is not yet prepared for Scaling-Up.

The Lean Scaleup offers a comprehensive and well-structured validation toolbox that integrates the corporate context from Day One.

Many companies struggle in business-building because their thinking tools do not factor in the corporate context enough.These companies overly rely on the Lean Startup which was never designed for the corporate context.

Within a corporate, “worthy to be scaled” does not only relate to customer willingness-to-pay, market size, ecosystem-fit, financial viability, etc. It also relates, for example, to current and future capabilities of the company, the feasibility of the business model with respect to accounting systems and policies, an acceptable risk level, and the interfaces between Innovation and Core.

Research shows that premature scaling an innovation concept is the Number One reason for failure. When companies apply the Lean Scaleup framework they avoid this fate. They can be sure that their corporate startup is not only “worthy to be scaled” but also “ready to be scaled.”

Most companies do not have “ready to be scaled” in their validation approach. And so, they face time-consuming and costly loops while they scramble to scale up their corporate startups. They even have a high risk of failing completely.

The Lean Scaleup provides guidance on the crucial “ready to be scaled” validation. It also provides actionable advice for the next step – arranging the set-up for Scaling-Up success.

Scaling-Up plays out in four dimensions. The Lean Scaleup provides guidance on how to work on these — and how to define milestones for metered funding and lean governance.

Scaling-Up is a highly dynamic part of corporate entrepreneurship. Successful scaleups need to sustain more than 200 percent annual growth rates over 3-5 years to fulfill their corporates’ expectations.

The top priorities for scaleups in this dynamic environment are advancing the product, making the market, growing the organization and advancing the relationship with the core organization.

Corporate startups that use the Lean Scaleup focus on what matters most: They advance their products via four different types of product work. They execute a validated “bowling alley” strategy and win mainstream customers. They grow the organization by orders of magnitude while maintaining the startup spirit. And finally, the develop the relationship to the mothership as they build the new business.

To build new businesses, your company needs the right teams at every stage. In particular, the leader of the scaleup is pivotal for success. The Lean Scaleup has personas to select the right individuals (including the scaleup leader) and team members for every stage.

In the early stages, the team needs to engage in a collaborative and constantly evolving environment to discover and solve ambitious problems. The team members need to be insight-driven (not process-driven), customer-obsessed, experiment- and data-driven, and be able to find their way in an ambiguous environment while working on the “affordable loss principle.”

In contrast, Scaling-Up requires people who love to take action, are more “implementers” than “conceptualizers,” and are entrepreneurial and driven by building the new business. These are people who enjoy the permanent race against the clock in a highly dynamic environment. They deliver and at the same time build scalability into the system.

The company needs to arrange a “startup-ish autonomy” (see above). But the teams need to seize this entrepreneurial freedom and run with it.

Finding, validating, and scaling new businesses require almost inevitably capabilities that the company and the innovation team members do not possess. The Lean Scaleup helps to analyze the capabilities that the team needs to have (or need to embed). 

As stated above, teams need to be empowered to work through the issues at a pace. But the company also needs to ensure that the issues the teams are working on are relevant and comprehensive and the quality of findings and decisions is high.

Hence, the company needs to ensure that the innovation teams have the right profiles and a comprehensive capability set.

The Lean Scaleup helps to ensure that teams have the right culture.

In the early stages – incubation and validation, collecting proof points for “worthy to be scaled” and “ready to be scaled” – teams that deeply understand customers’ problems, needs and business environment are needed. Customer domain expertise is mandatory for the teams. All too often, teams work through their (incomplete, see above) company’s framework in a “tickbox exercise” mode. These teams are more interested in showing progress than walking in their customers’ shoes. Consequently, many companies try to build new businesses on wrong assumptions – which inevitably will lead to disappointing results.

In Scaling-Up, teams that execute at pace, in a constant race against time and stakeholders’ expectations are needed. When you observe winning teams, you notice that they possess a „growth culture.” Team members build their capacity to see through blind spots; they acknowledge insecurities and shortcomings rather than unconsciously act them out; they spend less energy defending their personal value to have more power available to create the company spirit and the external value.

Due to their different management systems, Core and Innovation do not collaborate well per se. The Lean Scaleup helps companies to mitigate this friction by providing an effective collaboration model.

If a company wants to build new business, there is inevitably a corporate context. To create an “unfair advantage”, to accelerate and de-risk the journey, a productive collaboration between the scaleup and Core’s functional experts is needed. Alignment (see above) is a necessary condition – but it is not sufficient.

Individual people need to collaborate. This requires a solid collaboration model and practical help – for instance, adopting an agile workstyle.