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What corporations could learn from startups

June 24, 2013
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Rainbow Bridge © Messiah Devinem FlickrI spent the past months becoming increasingly interested in sustainable innovation entrepreneurship. It is a bit far from my regular organizational change practice, yet it was a great opportunity to compare mindsets and gather some insightful ideas.

Here are some of the clues I spotted.

1 – The right to fail.

During project reviews, some venture capitalists look for evidence that entrepreneurs experienced some flops in the past. They don’t want to invest in ideas, but in men who grow ideas to businesses. When entrepreneurs suffered setbacks during previous startup creations and drew out the lessons from it, they are better equipped to drive a project toward success, and can be handed the necessary resources.

How can we translate this inside the corporation? In the English-speaking world letting people have room for error is not unusual. It can even be a pillar of the learning organization. ‘Trial and error’ originates in scientific innovation and was adopted as a motto by most computer engineers. The right to fail can also be traced, remotely, in the set phrase ‘quick and dirty’ which expresses the choice to get around a problem in an inelegant way, rather than address it the right way, spend more time than planned, or even worse, put other priorities in jeopardy.

When hiring talents, some recruiters ask candidates if they recognize having made mistakes through their careers and what they learnt from it. But in many companies, mistake is rather stigmatized and goes together with a strong resistance to change. And there, asking the question to candidates is rather to check how they would behave when facing attempts of destabilization than to ensure they are able to adapt. Short viewed.

2 – Create ecosystems rather than organizations.

Startups have to ensure that the right persons get connected to the project at the right moment. They need to be adaptive enough to quickly and successfully move forward. A startup might have to change its business model to address the market, or look for complementary technologies to get from a concept to being operational. They need to find the person who has the exact right expertise for a specific issue, who will join the team for a period of time. Such people do not necessarily join the startup as there might not be enough work for a full time job – and their involvement in multiple projects guarantee their insight.

How can we translate this inside the corporation? By both accepting ephemeral teams, letting them be quite autonomous and make their own decisions. It goes beyond the concept of intrapreneurship, when a project is isolated from the main organizational structure, get its own funding and the right to bend some of the standard processes. The idea is to operate this way for all kinds of innovations or projects. It might even lead to include partners or clients inside project teams.Of course we are far from the traditional corporate model. In the post When E2.0 transforms the organization chart, I mentioned some pioneering trials of this nature: as the discussion goes on with my contacts, I notice that this transformation is one of the most difficult but also one of the most promising. Executives backpedaled when committees were changed, this and other crises were overcome: when the organization really tries to operate as an ecosystem, it creates energy and motivation that cannot be found elsewhere.

3 – Hands-on rather than crunching numbers.

When a startup raises money from investors, it has to present some strong and credible business plans.  But we all know that these business plans are expected to last as long as a summer night’s lightning bug. Their aim is to solicit funding, full stop. Managing and developing the business will need a functional knowledge and the ability to put things in perspective. “Hands on!” will command the entrepreneurs.

In the corporation, management relies on reporting. Figures are asked again and again, and it is dreadful if there is no historical data to benchmark.  We compare internal data to market data, competition compares to us, then market surveys compiles all of this, then we refer to these market surveys; are we chasing our tail? From intermediate management level up, one loses sight from the real job of the enterprise if it is not translated in KPIs. “What can’t be measured can’t be managed” said Peter Drucker, and he should have added “and is not knowledgeable by executives”, even more as they hate being drawn in daily issues. While some famous CEOS started at the bottom of the ladder (think Jack Welch, Jim Skinner or Anne Mulcahy), often executives are distant from workers and day-to-day operations, and don’t value common sense and instinct in the corporate environment. Here too, entrepreneurs can inspire corporations.

Startups make a fascinating area, especially when they deal with sustainable technologies. It seems everything can happen, they can take us out of the gloomy set of crises we are living through. Of course, some of them don’t survive and risk is ever-present: here too, the spirit is light-years away from the corporate one.

This post was originally published in French in 01net here.

2 Comments leave one →
  1. June 26, 2013 9:18 am

    Great post Cecile. I particularly buy into the right to fail. Anyone who says failure is not an option has also ruled out innovation (Seth Godin). And I would also add that the courage to try and fail is the only sure and safe way to shatter the status quo. Status quo is certianly less risky but can never be good enough!

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