By Heather McGough, @UrbanitySF
Lean Startup methodology and the climate walk into a bar. . . it sounds like the setup for a niche joke only meteorologists and product managers will get. In actuality, Lean Startup methods and environmental endeavors have more in common than you might think, and professionals like Boris Grinkot are ready to take what they've learned working in enterprise innovation and use it to make green initiatives a more cohesive part of corporate culture today.
The Struggle Surrounding Climate Isn't Foreign to Those Innovating in Corporate Environments
Those pushing for cultural and economic changes for the environment share a common struggle with anyone who has ever tried to champion innovation in a corporation where people are on the fence or stuck in old ways. In a corporation, "what has always worked" often reigns supreme. The processes, ideas and products that have kept a business in the black through the years get all the attention from those with decision-making power because these ideas are “safe” bets -- even if data and analysis are starting to indicate that a sweeping change is coming. In innovation circles, the cliche term for such a change is “disruption” of an existing business model as the leadership is asleep at the wheel.
Lead Startup champions in enterprises understand cultural inertia and know what type of effort needed to turn that tide. It takes small but deliberate wins, clear data and a patient, steadfast approach to convert executives and get buy-in for exploration and experimentation -- but even then, not everyone sees 100 percent conversion.
This same challenge of getting leadership buy-in is experienced by those trying to move enterprise companies to understand and take action on their environmental footprint, especially when these internal champions of climate action take an all-or-nothing approach. Governments have already taken stances, and their actions are mired in political machinations.
Grinkot says that while it’s an issue that has supporters otherwise divided by political ideologies (left vs. right, Republican vs. Democrat, etc.), the current federal administration is locked into retrograde ideas with little room or culture for the type of quick action needed to address climate change. While not a proponent of the idea that the market magically fixes all, he is working to prove that the private sector, even with current myopic ideas about growth and performance, can make a positive impact on climate change by acting effectively in narrow self-interest. He looks at climate action by enterprise companies as an opportunity to “future-proof their businesses against trends in consumer choices, international regulation, self-regulation by key stakeholders (such as their institutional investors) and eventually domestic government regulation.”
Grinkot points to Lean experimentation, with its rapid testing and deployment capability, as the tool that is most suited to bringing about the necessary change by starting small, demonstrating success, and justifying additional investment.
Not Three Bottom Lines, but a Single, Cohesive Economic Line
Looking at Lean Startup methods, it's easy to see why Grinkot thinks these tools and businesses can foster environmental change. It's less to do with what is morally or politically correct or being good stewards of the planet (though obviously those are good reasons to take action). It's about the bottom line, which isn't solely about money today.
Lean Startup looks at processes and products in light of the customers. The goal, always, is to increase customer satisfaction while maintaining project parameters, which does mean keeping things on budget. Leadership and stockholders are the customers too, after all. It all has to work together, or you can't call it success. Lean experiments aren't considered a success if they create an amazing product while also bankrupting the company.
Climate activists both inside and outside enterprises over the recent decades have focused on the idea of a triple bottom line to measure success: the economic bottom line (the profit), as well as the people and planet bottom lines. The latter two bottom lines answer the question: How does a company's actions impact people and the environment?
Thinking about them separately creates an obvious fork in the road for enterprises because, as Grinkot says, “only one of these bottom lines comes up on the quarterly investor call.” As a result, these companies will take the path to profit only. But Lean Startup practitioners are especially tuned in to understanding the importance of measurement. When these companies are exposed to understanding that their short-term focus has critical implications even in the medium-term, then people and planet bottom lines can be meaningfully translated into profit.
Faster, Smarter, Cheaper Behaviors
So, what do companies do with this new found knowledge? The immediate reaction might be to pour money into R&D to develop cleaner technology. However, plenty of clean technology is available. Companies just have to find ways to integrate that tech into their processes and products.
Grinkot says it's about demonstrating results faster, working smarter, experimenting cheaper, and developing a culture and accountability that incorporate a comprehensive bottom line into all decision-making. Optimizing operations to switch to low- or no-carbon technologies is a way to address climate change on the cost side. The other, trickier one, is on the revenue side by giving customers new products that don’t require as much of a carbon footprint in the first place, which goes directly to product innovation where Lean Startup has been thoroughly vetted.That means designing new processes for internal customer or new products for external ones. The customer culture has to support the cleaner product and process.
And here, we see a familiar pattern developing: instead of starting with governments and taking a top down approach, climate action must start with the customer and the company.
Lean Startup tells enterprises to be more customer-centric. Focus on the customer and what their problem is, then focus on the solution. Today, activists and governments often focus on the solution, assuming that its value is self-evident, even though that solution isn't working for all the people and businesses that could put it into action -- whether because it really doesn’t deliver that value or because those customers don’t understand it.
Starting with the customer (and understanding that the bottom line includes both people and the planet), those interested in bringing climate action to enterprise can use Lean Startup methods to drive rapid experimentation in both the implementation of products and processes and the encouragement of new behaviors across corporate and customer cultures.
Heather McGough is Co-Founder of Lean Startup Co. overseeing new products in modern management education, supporting the needs of entrepreneurs and corporate innovators. Her team helps companies and government agencies leverage the Lean Startup method to manage uncertainty and disruption in a fast-moving world. Heather can be contacted at Lean Startup Co. and here to help bring the entrepreneurial spirit to your large complex organization, with live and virtual training, coaching and consulting.