The Startup Way: How Modern Companies Use Entrepreneurial Management to Transform Culture and Drive Long-Term Growth

by Eric Ries

AN OLD-FASHIONED COMPANY is founded on steady growth through prescriptive management and controls, and is subject to tremendous pressure to perform in short-term intervals such as quarterly reports. A MODERN COMPANY is founded on sustained impact via continuous innovation, and focused on long-term results. AN OLD-FASHIONED COMPANY is made up of experts in specialized functional silos, between which work passes in a stage-gate or waterfall process that sends projects from function to function with specific milestones tied to each handover. A MODERN COMPANY is made up of cross-functional teams that work together to serve customers through highly iterative and scientific processes. AN OLD-FASHIONED COMPANY tends to operate huge programs. A MODERN COMPANY operates rapid experiments. AN OLD-FASHIONED COMPANY uses internal functions such as legal, IT, and finance to mitigate risk through compliance with detailed procedures. A MODERN COMPANY uses internal functions to help its employees meet their goal of serving customers, sharing the responsibility to drive business results. AN OLD-FASHIONED COMPANY prioritizes even highly uncertain projects based on ROI, traditional accounting, and market share. To measure success, project teams track and share numbers designed to look as good as possible (“vanity metrics”)—but not necessarily to reveal the truth. A MODERN COMPANY attempts to maximize the probability and scale of future impact. Project teams report and measure leading indicato...