Open Innovation Results by Henry Chesbrough

Author:Henry Chesbrough
Language: eng
Format: epub
ISBN: 9780192579065
Publisher: OUP Oxford
Published: 2019-11-06T16:00:00+00:00

To date, Lean Elephants has been a success. The company calculates that its time to market has accelerated by a factor of 2.6. The company is conducting 45 percent more R&D projects (using the same budget level as before), while spending 48 percent less per project. The savings in cost and in time show the business benefits that an effective Lean Startup process can deliver, once it is adapted appropriately to a large company environment.

But the company knows that it is not done with changing its culture to reflect Lean thinking throughout the organization. As Ian Small observed, ‘The ultimate goal is not to have 200 people sitting in a corner of an organization thinking about innovation, but to have the whole company thinking about innovation…Inside my organization, we now understand Lean Startup and the thinking, but do 140,000 other employees at Telefonica understand it? No, not yet. When we get out beyond the test phase to scale the product inside an operating business unit, and then we start talking about learning and adapting while we’re in market, it’s still like we’re speaking Swahili.’16

Is this Lean Elephants approach going to be sustainable over time at Telefonica? It is still early days. As of now, Lean Elephants is also not consuming much money. If a recession were to hit Telefonica again (the company suffered significantly during the financial crisis of 2009–12), the R&D budget would likely get hit hard. It may be that the Lean Elephant approach might fare better than the traditional approach, given its lower costs. But the advocates of the traditional innovation approach will try to save their own budgets and jobs. So the Lean Elephants cannot rest on its early laurels, but will have to deliver even more business results in future.

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