Tips for Applying Lean Startup in a Large Organization: A Case Study with Telefónica, Susana Jurado, Telefónica R&D

Editor's Notes

• #2: Imagine yourself at a 90 years old telco….. Great, that is Telefonica. 5 years ago at the R&D create a new generation of digital telco products: context of rapid constant change and high uncertainty. Lean Startup could be of help -> innovation project teams similar to startups
• #3: When we started we just wanted to get better results. We started with only two projects….. That is how our Lean Elephants innovation framework was born…
• #4: When we began we had no idea of how things would turn out. Now let me tell you how Lean Elephants works its magic: Lean Elephants magic: Focus on the customer Stage gating process, increase as the project progresses with validated learnings, to minimize the resources and the risk. Fostering intrapreneurship with innovation calls. Twice as faster Test more ideas within the same timeframe and budget Of course bringing this framework to life wasn’t easy.
• #5: It can feel like a hurdle race because you need to overcome a series of challenges……
• #6: A roller coaster with its ups and downs.….. Focus on adapting lean startup to your context and bring value to your organization. In 2014 -> main takeaways of our Lean Elephants whitepaper.
• #7: Today, building on additional experience I would like you to go through 4 of the most important strategies if you are ready to jump in a Lean Startup adventure…
• #8: There is no right or wrong culture -> learn how to hack your culture. Understand it and find a way to make things work, to your own advantage. Become a Corporate Innovation Hacker. Engage people from different organisations (understand how they work, explain what you need and why, find the way you can help them), getting their support. For example, now we sit regularly with the different business units -> challenges.   The magic -> by doing something different you do end up changing the company.
• #9: The butterfly effect -> one team, one organisation can start the change.
• #10: What happened when returning after the talk at the Lean Startup conference in 2014. Our Communication and PR department made a great effort. We grabbed internal attention. You know “grass is always greener on the other side of the fence.” But I started to realise something was changing for real one day in January 2015 -> Juan (Telefónica R&D’s controller, nice guy, but his job is being “Mr No”) Then, a few weeks after, I was once again in the elevator. So you see elevators are not only important for startups…. And David (head of HR at Telefónica R&D nice guy as well as a very good professional, dealing with people that do not perform)
• #11: So there I was again trapped in a box -> teach Lean Startup to HR managers and explain lean organisation. Were really excited and we went further engaging everyone in their unit.
• #12: These two encounters in the elevator brought one, well no, in fact two good things. First: Opportunity to change things in all the company, they were now listening to us -> take advantage of our culture to hack our the organistion and change things. Second: Now I use more the stairs, I love having this conversations but my heart prefers to have them “out of a box”.
• #13: Since then, it has been a non stop of people from organisations within Telefónica and different countries as well (Chile, Venezuela, Germany, Argentina, …) We have a Lean Startup community and keeps growing. Universitas Telefonica, Which leads me to the next topic….
• #14: Lean Startup: bring market validations and customer traction for Executive Committee meeting Getting support from top management and stakeholders is still key
• #15: This is what Henry Chesbrough calls getting upstairs in the building. When trying to get buy-in: two extreme situations or at some point between them.
• #16: In one extreme you may get a faces like these ones….. Worked best: starting small, in a low scale, working under the radar. And then come back with tangible results
• #17: The other extreme is the overenthusiastic -> “what are we waiting for????!!!!” You really nailed it but watch out. Still there is a l lot of uncertainty and therefore have to minimize the risk and learn how to do things right before you scale. It will be hard to get another shot, because if you start big and you fail, you will fail big.
• #18: We thought we had to bring people from startups to make Lean Startup work -> Innovation Calls (employees can submit their ideas and get to devote 100% of their time to work of those ideas) -> you can find this talent, just waiting for an opportunity to emerge and become visible. Processes and organisations in a large company are usually not designed to support innovation but the current portfolio. Way of working and the mindset: focused on performance and objectives achievement than on exploring. You have to create the right environment ->if you don’t you can end up like the monkeys and bananas experiment (or story). …
• #19: Where an experimenter puts 5 monkeys in a large cage…... The answer you might get "It has always been done this way. Don't mess with what works."
• #20: Create islands of freedom: trust them and give them autonomy to make decisions, intrapreneurs love autonomy and the feeling of ownership.
• #21: You aren’t giving them free rein. Stage gating: in each stage gate teams bring answers to questions around key hypothesis and a plan for the next steps, if they get the green light to go ahead, challenging deadlines and KPIs are set. Help them with training and mentorship to change their mindset.
• #22: Help them creating the right teams, make them multidisciplinary otherwise the results won’t be balanced. Example.
• #23: We have hired people from startups. Ramón: “I haven’t really notice much difference. We deliver a new release every 2 weeks and the speed and the pressure is basically the same.”
• #24: We experiment but we need to make some adjustments. Big companies: an established brand, a reputation, an existing portfolio, and existing processes and organisations. From the very first moment you need to rely on departments like brand or sales. Example, 3 years ago we wanted to use a crowdfunding platform by then things like Indiegogo’s Enterprise Crowdfunding didn’t exist. Can imagine how would’ve people react by then if Telefónica, with around 50 billion euros of revenues in a year? The good news is there is always a method to test hypothesis in a way that works for you, you just have to be creative and find it.
• #25: Advantages when creating new products and services -> rely on your assets. We are also limited in our experiments because the telco market is a regulated market, and you’ve got SLAs you have to fulfil. Regulation determines the type of products and services we are allowed to offer and even how we are allowed to use our assets …… So when experimenting relying on our assets we have to be extremely careful and must comply with the legislation and at the same time be careful not to affect the service. (Example of survey or landing page -> data protection law).
• #26: Example: build a new service based on our communications network we had to build an MVP we could show and give our customers to understand how the service should work -> resources and time needed and without affecting/endengering other services.
• #27: So the MVP designed to test customer acceptance had an application web for the customers but all actions done by the customer through the application required doing it behind the scenes manually.
• #28: At the same time in the lab we had to test the technology and build the service. To make this possible, the team had to talk to more than 30 people across different departments getting to the last link in the chain to understand how they work and to get their support.
• #29: It is extremely important to get bottom up support. This is what we call dig inside the building
• #30: You not only have to get outside the building but you also have to get upstairs in the building to get executive buy in, and to dig inside the building.
• #31: You need the combination of the three of them. When you are in a large company, you have to get outside the building but you also have a lot of work inside the building
• #32: If I had to extract the 3 main learnings out of these 4 strategies, these would be:   Patience is key, don’t be in a hurry and start small. There is no right or wrong culture. Instead become an expert in your culture so you can use it to hack your company. Results have a powerful voice of their own -> show that Lean Startup can really make a difference.
• #33: So now what? What happens next…? We are not even close to being done with this journey. For the coming months our objectives are to focus on: Transferring innovation to the business units -> build on success stories. Improve the art of killing -> share the learnings across the organization.   Will be delighted to get feedback and suggestions from you. And, come to next year’s conference and share the results with you ….