5 Lessons Big Corporations Can Learn From Startups
Shawn Parr is the CEO of Bulldog Drummond, a design and innovation consultancy headquartered in San Diego whose clients include Starbucks, Adidas, MTV, Nestle, Pinkberry, Virgin, Disney, Nike and American Eagle Outfitters.
There’s a stark contrast between the slow pontification of a multi-national company and the focused energy of a small startup poised to change its corner of the world. Business practices obviously change when there’s more to lose, but there is definitely something to gain from adopting the startup mentality of “everything to gain” rather than focusing on keeping the status quo or minimizing potential loss.
Here are five valuable lessons that corporations can learn from their entrepreneurial counterparts in the startup world.
1. Ditch Democracy
Your average, super-charged entrepreneur usually starts his or her journey because of a passion or epiphany. Personal experience, downright frustration, or a simple observation can light the fuse. And, once lit, entrepreneurs are unrelenting in thinking about how to change the world and bring a new product solution to market.
Product development teams in larger companies can benefit from modeling or mimicking the individual obsession and observations of the single entrepreneur. Instead of running projects in a democratic fashion, consider remaking some of your teams into smaller, highly motivated units in order to tap into the passion and drive of your would-be entrepreneur employees.
3M is a global company that has allowed product innovations to come from any corner of the business. The Post-It Note was invented by an employee, not as a product, but as an adhesive spray that would allow you to tack papers to bulletin boards. Though this concept never proved marketable, his subsequent “reusable bookmarks” that colleagues began passing around the office became one of the most successful workplace products of all time.
2. Get Scrappy
When you’re operating on a shoestring budget, there’s motivation to be highly resourceful. Starting a company from nothing, investing life savings and using credit cards to fund product development and payroll makes the clock tick faster and the mind sharper.
Well-resourced corporations with larger teams and bigger operating budgets are typically less courageous, less resourceful and generally take longer to get products to market. Consider setting up an experiment where you find a project that can be run independently from all of the other things going on in your company. Give the project a limited budget, a limited set of resources and an audacious goal. Set the team running and see how masterfully (or un-masterfully) it tackles the challenge and what comes back out as a result.
The team at freshguide.com, an early-stage business in San Francisco’s Bay Area, started its business using the rapid prototyping model of learning what their consumers wanted, learning what moved every aspect of its business and, as a result, evolved its business purpose mid-plan to a more focused and relevant concept.
3. Get Back to Your Roots
Shultz from Starbucks, Clif from Clif Bar and Branson from Virgin were all scrappy, “work out of a garage” entrepreneurs once upon a time. As their companies grew and their stories were told externally, they became inspiring and relevant to consumers and garnered serious fans on the outside.
One thing large companies often lack is the connection to their original story. If there was a passionate founder at one point, his or her purpose has often been overtaken by years of changing teams and Wall Street expectations. Take time to look into the passion that started the company and explore how to bring it back into the organization in a meaningful and current way. Being directed by a purpose creates real connections and opportunities for new thinking. It also gives your employees a reason to come to work and customers a reason to believe in what you’re selling.
Clif has his name on the bar, on the building, and on every product the company makes. The story behind the brand is inspiring and one that everyone working for the company and buying the product can relate to. Clif was a cycling nut and a weekend warrior who wanted a bar made from real food that would give him energy on his rides. His family were bakers, and he had an idea that he tested out with his mom in the kitchen. The rest is history. It’s a story of simplicity and determination that has driven the success of the company from day one.
The Honest Kitchen, a passionate pet food company in San Diego run by a husband-and-wife team, developed their original recipe in their home kitchen to feed their sick dog. Today they allow everyone in the company to bring their dogs to work. Every meeting, whether it’s with the board, a product development team, or investors, is full of pooches — reminding everyone who they’re in business to serve.
4. Go Fast
Startups often move at a breakneck pace because they don’t have the luxury of time. Decisions need to be made rapidly. Using a unique blend of intuition and trust, entrepreneurs make fast decisions that don’t rely on thousands of dollars worth of research, extensive approval processes or vetting from all the higher-ups (most times because there aren’t any).
Larger companies are often weighed down by complex layers and processes, especially when it comes to new thinking or innovation. This often results in months of back and forth where very little of tangible value is accomplished. Good ideas lay dormant and often lose steam.
Set tight deadlines that create pressure for teams involved in product development or innovation scenarios. Teach them how to rapidly ideate, building on both good and bad ideas, relying less on judging ideas right then and there, but developing the largest range possible. Set them free from the typical process and let them create ideas based on their own intuition. Even if the outcomes have to run through your corporate process eventually, hold that step to the side as long as you can and see what happens as a result.
In working with American Eagle Outfitters to create 77Kids, my company dedicated a standalone team that immersed itself in the project and the business space. Working with a dedicated team unencumbered by the larger business, but still able to tap into their expertise and resources enabled us to build a business from the blank page to launch in 18 months.
5. Mix It Up
It’s counterintuitive to look at potential competitors and reach out to collaborate, but brands with shared values and complimentary missions may very well be excellent strategic partners. We’re seeing a growing trend in competitive cooperation. It’s most often entrepreneurs who are willing to do this, either out of necessity, desire or shared interest.
Large companies often shy away from working with competitors in an effort to keep their information confidential, ensure market share isn’t lost, and assets are protected. Give the people on your team some freedom to explore potential partnerships with your competition and chart the places you think rich collaboration might happen. You don’t have to act on the synergies if they don’t align with your goals, but even the exploration could yield interesting and new ideas to feed back into your organization.
As a founding member of the CleanWell team, we worked with our friends at IDEO to develop products for a more natural way to clean. CleanWell has been highly collaborative and has been able to take its ingredient technology platform and partner with other disruptive and progressive cleaning companies like Seventh Generation and Method by licensing the ingredient technology and the “Powered by CleanWell” brand to increase their product efficacy. This collaboration benefits all parties involved, most importantly the consumer.
What tips did you find most useful? How else can large corporations benefit from the entrepreneurial spirit? Let us know in the comments below.