Nordstrom is a Fortune 500 that brings in around $9 billion annually, but it knows that it has to act like a startup to stay competitive. So it created an "innovation lab," comprising of a small team under the corporate umbrella charged with creating disruptive products.
Eric Ries, who just published "The Lean Start-Up," profiles Nordstrom's lab as a case study on his blog, Startup Lessons Learned. He says the innovation lab classifies as a lean startup because it focuses on developing rapid prototypes while working with customers in real time — in other words, it conducts one big experiment after another. In this case, the lab created an iPad app (to help customers select sunglasses) throughout the course of a week while working on the ground at the Nordstrom flagship store in Seattle. (The innovation lab's lead developer called it "the world's first 'flash build,' or a flash mob where a software team shows up and builds an app in a surprise location.")
Ries says the Nordstrom team was successful because it pulled this off in a week, embraced "genchi gemutsu" — a concept of the Toyota Production System that translates to "go see for yourself," or "get out of the building" (and go interact with customers), and it did a bunch of "simple, rapid experiments" to develop for iOS. In other words, it acted like a startup, not a Fortune 500 with long product-development cycles.
Creating an innovation lab is a smart move on Nordstrom's part, as it faces more competition from start-ups and other department stores around the world.
Check out the video of the Nordstrom innovation team here:
