My goodness how big companies envy startups. Every time a major executive touts a company’s innovation intentions (not usually the acts, just the intentions) they invariably say something like:
“In these difficult and fast changing times, it’s more important than ever that OMG Mega Corp act more like a startup” … Anon. Senior Executive.
Every bloody time. But it’s wrong. Not just wrong, it’s impossible. It’s like an elephant painting its ears pink and claiming to be a mouse. It doesn’t move like a mouse. It can’t fit where a mouse fits. And you’ll find out pretty quickly that it doesn’t eat or poop like a mouse either.
Everything a big company is and everything it does are at odds with being a startup. Here’s a handy comparative table to illustrate the point.
|Primary Purpose||Business Management||Business Creation|
|Scarcest Resource||New Idea Support||New Idea Execution|
|Biggest Fear||Personal Failure||Company Failure|
|Biggest Wish||Personal Success||Company Success|
|Biggest Challenge||Risk Aversion||Focus|
|Biggest Asset||Resources for Execution||Speed of Execution|
Most big companies cannot get past any one of these differences, never mind all of them.
Big companies get big by repeating something many many many times, not by changing it every day. It’s corporate natural selection at work. Companies that fail to build processes for scaling never scale. The companies that do scale and succeed are genetically predisposed to repeat what works, not create something new. And that’s what fundamentally makes innovation and new ideas scary and difficult for big companies.
From the executives on down, personal failure and personal success are the biggest motivators. These motivators are compounded by a big company’s natural tendency towards risk aversion. Sure, big companies have the resources to do things, but they also have an impenetrable wall of risk aversion. Disruptions happen, but generally, big companies stay big by not doing anything foolish. Risk aversion is another key part of corporate DNA.
When an executive gets past risk aversion but works on a project that fails, that failure usually leaves behind a toxic spill that lasts for years and sticks to anyone within a 10 mile radius. Toxic spills can be deadly to a career. They amplify fear of failure and compound its consequences. Nothing kills innovation faster than a good toxic spill.
Compare all of that to a startup. Startups are driven to build something new. Founders are obsessed with the business equivalent of new car smell. We often start to lose interest once we’ve driven the car off the lot, never mind reached the end of a 3 year lease.
Actually executing on an idea is tough for a startup – we’re too busy inventing and coming up with new ideas.
We also abhor repeatability. It’s the last thing we think about.
And while a founder or employee at a startup might hope to be handsomely rewarded at a future date, their primary day-to-day concern is the overall success or failure of the company. In a small startup team, every effort counts. As an individual, you can directly contribute to the success, or failure, of the company. And boy, do you realize that every single day.
Every startup’s biggest weakness is focus. The very thing that makes use good at being startups makes us lousy at focus.
When we move, we move fast. We just tend to do it without enough gas, a decent map, or consensus on where we are going; and in a car with bald tires that no self-respecting executive would be caught dead in.
For a big company, the key is not to try to act like a startup. The key is to empower your team to innovate and execute with the speed of a startup. That’s the secret. That’s the only startup trait you really need. The rest will just get in your way.
Give the team a safe garden to play in. Give them the resources to get things done, empower them to sprint, and eliminate the risks associated with failure.
You ignore failure at your peril. In any big company, fear is not the mind-killer. Failure is. Innovation has to incorporate, tolerate and even embrace failure. Not every innovation will be a success, but every attempt will bring new insights that will fuel future efforts.
Embrace failure and enable speed. Magic will happen.