What is the effect of the lean startup approach on companies’ s innovation capabilities?

Eric Ries started and created The Lean Startup Methodology and the term Lean Startup has its origin from the IT industry. Lean Startup is used as a customer centred approach. What do customers want? This question causes uncertainties and a major uncertainty is the hazard of developing a product or service that customers don’t want to use. Trying to minimize that hazard, Eric Ries’ Lean Startup Methodology addressed a new way of founding and guiding startup creation. Rather than bringing a finalized version of a companies’ product to the market, Lean Startup Methodology endorses the creation of an early version and its constant improvement through direct customer feedback. The overall objective must be to improve the ability to successfully innovate, according to Ries. In general, companies who improve their innovation capability are able to achieve better value propositions and higher profits. So, Innovation capabilities as source of competitive advantage for organizations are therefore an important issue in the scientific literature. To develop an innovation capability, the right conditions have to be in place to fully benefit from the innovation outcomes. My research facilitated the exploration of the Lean Startup Methodology as a phenomenon using a literature study, observations and interviews. This ensured that my research was conducted throughout different research methods to have a variety of scopes to integrally comprehend the concepts. The aim of my research is to explore which effect the implementation of the Lean Startup Methodology has on the innovation capability and thereby measure the influence of the innovation conditions. The results of the research were that the Lean Startup Methodology enabled them to maximize the usage of resources by constantly prioritizing and use key metrics to define their definition of success within uncertain conditions. The companies have adopted the Lean Startup Methodology by creating a management vision, installing an innovation process, a methodology around the development of producing better products, customers want to use. All the companies conclude that the Lean Startup Methodology has maximized their amount of validated learning in their search of a product/market fit by developing MVP’s, ultimately improving their innovation capability. An important innovation condition is that managers can create and shape the organization’s culture, by defining new means, minimize bureaucratic layers, strengthen collective understanding and accommodate resources. The companies have proven when one has an explorative culture, it will positively affect the innovation capability. Even more, the Lean Startup introduces another way of innovating, embracing this innovation strategy means dedication from the management. In conclusion, the higher the decision making unit is positioned within a company, preferably top management , the more impact the Lean Startup Methodology has within an organization to make a cultural change. The most learning will be achieved with failure. So, some companies praise the biggest failure. This engages people to learn and fail. The Lean Startup Methodology is therefore most suitable to test assumptions in an uncertain environment, with the result to learn faster than the competition and create value propositions to achieve an competitive advantage in commoditized industry.