Can scale-ups stay lean?

Since Eric Reis developed the Lean Startup concept in 2008 and published his book, “Lean Startup”, in 2011, the start-up community has touted its principles as one of the most efficient and consistent business systems that founders can use to strategically test whether or not their ideas are viable and scalable in the real world.

But what happens when your ideas turn into profitable products or services that real people actually want? Do you leave the lean principles behind once your business grows?

The short answer is no.

Staying lean as a scale-up requires careful examination and upskilling to pinpoint and remove inefficiencies. It is a process of continuous learning and improvement.

Lean operations may sound counterintuitive to growth and scale. But we have seen these two concepts drive amazing results when done right.

So, how do you strike that balance?

In this article, we talk about the 3 lessons that can help fast-growing scale-ups leverage their founding value proposition to create organisational and cultural leanness and ensure consistent value generation.

1) A little stretch is okay

While a targeted focus is key to gaining the momentum your scale-up needs to expand to new areas, product diversification can help you widen market reach, boost revenues, and avoid the pitfalls of a single revenue stream when sales plateau.

However, paying too much attention to carving out new areas at the cost of your core offerings can sink your ship. To avoid this, remember not to neglect your main profit generators.

Another thing to watch out for is the risk of bloating your business model and processes while you are in the midst of diversifying your offerings.

This can mean not updating or streamlining outdated and highly bureaucratic systems, holding unnecessary meetings, and adding needless product features.

So, ask yourself: Is expanding your offerings what you need right now? If yes, how can you create synergies across your product/service development, teams, and organisational processes and structure?

Your answer can inform what your next best steps will be in terms of creating leaner but high-value products and developing more efficient business systems.

2) Move beyond the lean basics

You may have already heard about the basic lean concepts, including adding value, streamlining processes, experimenting and developing in small batches, eliminating inefficiencies, asking the 5 WHYs, and referring to the build/measure/learn concept.

However, you can go further by incorporating lean concepts throughout your scaling journey and intertwining them across your organisation and work culture. 

Reis believes that as lean start-ups grow, they are more likely to succeed in driving operational excellence if they retain their lean philosophy.

The keywords here are “more likely”. And more likely is not exactly the same as ready.

So, how can you boost your readiness to create lasting value and innovation?

Here are 3 additional lean tools that you can use as you grow and adapt to your changing needs:

• Value streaming map: This map tracks data across all your customer relationship processes. Use this to identify inefficiencies and bottlenecks when trying to create more value for your customers.
• Visual displays and controls: These are tools like Kanbans and Andons. They help alert lean teams for any activity failures, critical status changes, or inefficiencies. For these to work, they need to be highly visible to everyone in the team or business, so you can make the necessary and timely changes or pivots.
• Continuous improvement and planning: Living lean means controlling and optimising processes, brainstorming sessions, collaborative discussions, and checks and balances. These rituals and processes can differ from one scale-up to another, depending on what the right cultural fit is. It can include A3 Management, Kaizen, or PDCA practices.

3) Make lean part of your company culture

As with any approach, successfully staying lean requires a culture of disciplined execution.

The lean lifestyle is not all about optimisation guidelines, processes, and tools. It is also a mindset that should be integrated into your company culture in order to work.

The goal is to create an environment that encourages people to embrace this individually and collectively.

To do this, ask yourself: Are we creating a space that makes people feel safe when they don’t get it right the first time? What are we doing to encourage continuous learning? How do we know what is working and what isn’t working for our teams?

And then adjust accordingly. 

After all, being lean is all about building, measuring, learning, and iterating according to what will be sustainable in the long term.

While tech companies are the ones most likely to resonate with the lean approach, scale-ups in other industries can also benefit from it in terms of driving the importance of data-driven facts, continuous and fast learning, and the ability to pivot if needed quickly.

Across industries, our team has helped build targeted lean strategies that grow and improve with our clients’ scale-up journeys.

Partner with us today if you want us to do the same for you.

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