Originally published in The Observer Effect
Startups are the new wunderkind: everyone wants to have one, everyone wants to be one. Our increasingly digitally dependant existence has brought startups to the fore: thanks to current technology, it is easier than ever before to develop, launch, and test new businesses. So if all the cool kids are busy building the next killer app, what does that mean for the large companies now so gleefully referred to as “the incumbents” or “legacy corporations”? In business, as in sport, in order to best compete, you need to stay alert, keep flexible and play to your strengths.
The first two are rather intuitive but the third may have you asking: what are my strengths? As any seasoned job interviewee would know, your strengths are how you frame them or better, which of your characteristics can you best play to your advantage. Using three aspects of a large corporate where they may differ from the startups, let’s see how they could use these to keep the upper hand.
“To win in the marketplace you must first win in the workplace.” — Doug Conant, CEO of Campbell’s Soup
Large corporations typically have a large number of employees. Done well, that could be hundreds or thousands of active brand ambassadors; numerous individuals, each members of their own networks, who should be living and breathing the company’s values every day. As the economy becomes increasingly digitized and knowledge-based, more and more businesses are realizing that employees are their greatest asset.
The benefits of engaged employees are clear not only within the workplace environment but all the way to the bottom line. Happy employees means productive employees, less turnover and better business. DDI estimates show that in an organization of 10,000 employees, moving a workforce from low to high engagement can have an impact of over $42 million.
Ensuring employees are happy and engaged, of course, is something that needs to happen actively and consciously within an organization. Going back to the startup comparison, stability, salary, and benefits are a few advantages corporates can more easily offer than the majority of startups. Economies of scale create more opportunity for training, mentoring, and diversity within the workforce.
Startups are, by nature, flatter organizations and this lack of hierarchy and increased interaction across all levels can be an advantage, bringing increased transparency and communication. Corporates need to work harder to ensure employees feel trusted and empowered — this will allow them to move quickly and make decisions that allow for adaptability and growth. Great ideas can come from anywhere, and often those closest to the front line: ensure those communication pathways and interactions are open.
By understanding and nurturing your employee community — activating company culture and providing employees with the right opportunities to grow — you’ll be creating massive competitive advantage before even looking outside your own office.
This one is slightly controversial. Isn’t it the the few — or complete lack of — formal processes which allows startups to react and innovate quickly, without being lost in a sea of red tape, through numerous sign-offs and handovers? As Elon Musk put it, “The problem is that at a lot of big companies, process becomes a substitute for thinking. You’re encouraged to behave like a little gear in a complex machine.”
Still, those who have had experience working with start-ups are all too aware that this chaos, quick (and sometimes unsubstantiated) decisioning, perhaps multiple pivots, aren’t necessarily always strengths. The right processes prevent errors by ensuring the necessary checks are in place, allow for growth and scalability. Planning, order and the structure behind your ways of working which allows for large teams, and teams of teams, to execute efficiently — can be the difference between businesses who get a lucky one time success and those who are in the for the long term.
This is often an area that needs work. There can be a fine line between processes which enable and processes which actually kill innovation, kill independent thinking, and kill learning. Getting this right is important.
Two ways we work with companies on finding this balance are: firstly, to get and stay lean and secondly to have both management and staff understand that processes are not written in stone. The ability to adapt your ways of working to changing internal and external factors allows companies to stay on top of the game.
In order to have gotten to be a large company, one can generally assume it means that you have customers. A definite strength: a large, captive audience whose trust you’ve earned and whose attention you’ve managed to capture at least once before. The question here than becomes, how well do you know them? Do you know how to keep delighting them? If the answer is no, it’s unlikely they’ll be around for very long.
With people, processes, and customers, corporates have a lot of the groundwork in place. The key to staying in the game is to be aware, be agile and keep putting those strengths to the test.