Scentre Group’s Westfield shopping centres are known for their extraordinary retail spaces. The company owns and operates 40 centres across Australia and New Zealand with over 11,000 retail outlets that see over 500 million shopper visits each year. This substantial physical footprint has made Westfield centres a market-leader in traditional retailing.
In order to stay ahead of the game the group knew they needed to make innovation business as usual. See how we used lean startup methodology to create three startups in only six weeks, unlocking significant value for the business.
Staying Ahead of the Game Through Innovation
Due to rapid changes in the external retail environment, online shopping and consumer demands, Scentre Group wanted to develop a consistent approach to innovation. An approach that could become part of everybody’s job and would ensure that its portfolio of Westfield centres stay ahead of dynamic market trends.
Scentre hired Jo, an innovation manager to help accelerate innovation at Scentre Group by establishing a consistent innovation process and building innovation capability within the organisation.
Jo’s first initiative was to launch an ideation campaign, the CEO Challenge, to seek innovative answers to CEO Peter Allen’s question:“What’s one thing we can implement in all centres that our shoppers will consider to be extraordinary?”
The challenge delivered over 100 ideas. Three ideas were chosen by an Innovation Council for further development and market testing.
A Radically Different Approach
In late 2015, The Strategy Group met with Jo to propose a radically different approach to developing the top ideas – running them like start-ups with seriously limited time, budget and resources.
The Strategy Group designed a Venture Strategy program, Incubation Scentre, that took the ideas from conception through to market validation in just 6-weeks.
Working Like A Start-Up
The program was designed to be fast-paced, intensive and immersive in order to give the founders a real world experience of life in a start-up:
- Founders – Each start-up had 3 Scentre Group employees that stepped out of their day jobs for 6 weeks to focus relentlessly on developing their ideas;
- Environment – The start-ups worked in a dedicated space alongside Scentre Group’s main offices, so they could work quickly, independently and still reach into the main organisation for support;
- Two start-up methodologies – The program combined the Business Model Canvas as an organising framework with The Lean Start-up as an experimentation approach;
- 4-day cycles – The program operated on regular 4-day rhythm, each cycle validating a specific element of each idea’s business model;
- Experiments – Each cycle, the founders ran experiments to test their ideas with customers and to focus the development of their business model; and
- Check-ins – At the end of each cycle, all the start-ups would get together to share lessons learnt and to collaborate with others in the organisation for guidance and direction.
“I’ve always been a believer in process. This is a serious set of processes and it’s really well constructed. It’s simple but quite comprehensive and I think the combination of the Business Model Canvas and the Lean Start-up together create the magic”
– Jo Smail, Accelerating Innovation @ Scentre Group
Mentality Of A Start-Up
To succeed, the founders not only needed to work like a start-up, they also needed to think like a start-up with:
- Agility – The founders worked with incredible pace to validate their business models, often needing to make snap decisions and adapt their approach on the fly;
- Frugality – With only $1,000 in their budgets, the founders had to carefully consider how to spend money and if there was a cheaper way of doing things;
- Courage & humility – The founders had to have the courage follow their entrepreneurial instincts yet the humility to accept when their experiments pointed to a different direction; and
- Just-do-it – The start-ups lived by the saying ‘progress over perfection’ and prioritised action above all else.
Scentre Group employees were welcome to visit the innovation environment so they could share in the experiences of the start-up founders. In this fashion, Incubation Scentre started to spark broader cultural change within the organisation.
“Every time we had people that were not directly involved in this process come along and visit, they were overwhelmed and amazed at what the teams were doing and were surprised and delighted by the achievements that they had made in such a short period of time. ”
– Jo Smail, Accelerating Innovation @ Scentre Group
Unlocking Significant Value
At the end of the program, each of the start-ups presented their market-validated ideas and business models to the Scentre Group executive team.
The presenters provided extensive market evidence to support their pitch:
- 446 customer interviews were conducted;
- 111 experiments were run to test ideas;
- 59 ideas were validated by the market; and
- 52 ideas were invalidated through testing.
Almost as many ideas were validated as invalidated, meaning that the founder’s ideas were wrong about as often as they were right.In fact, two of the start-ups experienced major pivots (changes in direction) due to market lessons uncovered on the program and their solutions changed dramatically as a result.
The bank of evidence generated through the program gave the Scentre Group executive team the confidence to approve all 3 start-ups through to their next phase of development.
In just 6-weeks, significant potential value had been unlocked for the organisation.
The Differences Between Working Like a Startup and Business as Usual
After the program, the founders began road-showing their experiences with others in the organisation. One founder highlighted the differences between life in a start-up and life in her day job:
|Working like a start-up||Business-as-usual|
|Small groups||Large groups|
|Dedicated focus||Split focus|
|High accountability||Average accountability|
|Faster pace||Slower pace|
|Methodology driven||Process driven|
|Interviews & observation||Desktop research|
|Team ownership||Individual ownership|
|Idea experimentation||Idea implementation|
|Challenge & disrupt||Passive agreement|
|Failure celebrated||Failure avoided|
|We know||We think we know|
Bringing to life Innovation Within the Business
At the end of the program, we interviewed all of the 9 internal startup founders about their experiences. Here is what they had to say:
About Julian KezelmanDirector, The Strategy Group Julian believes the future of innovation will be centred on business model redesign, integrative thinking and customer experience design. Julian has extensive client consulting experience working within major Australian banks, creating funding solutions and developing restructuring strategies for borrowers. He advised large corporate and publicly listed Australian clients in the financial services, mining services, media, medical and retail industries. In search of a career change, Julian completed an MBA, receiving class medals for overall performance, finance, innovation & entrepreneurship and now specialises in business and innovation strategy, open innovation, design thinking and lean startup methodologies.
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