For me, what Marco Annunziata touched on when he wrote “every company will need to be more like a start-up” was the most exciting part and one of the main takeaways of this article.
Why? Because to me, “acting more like a start-up” means staying lean and fast. It means being nimble, continuously operating and marketing your business in the year you live in. It means adapting quickly, not resting on your laurels, and behaving like tomorrow might not even exist. I am very onboard with that mentality.
There are so many positives we can take away from start-up culture. The biggest companies should always have some level of culture that we witness in today’s start-ups. Of course as businesses grow and evolve, things change. But it’s possible. Take my own agency as an example. If you audited a large amount of my employees at VaynerMedia who have been with the company for four or five years now, they would tell you that there are a lot of similarities between Vayner at 100 employees and Vayner at 600 employees. I’m very proud of that fact.
For me, “acting like a start-up” comes down to religion. At Vayner, we are fast workers. We don’t dwell on mistakes. We focus on growth, and are not afraid to cut something when it isn’t working. Like any good start-up, we manage our overhead and don’t allow for inefficiencies. Financial headaches due to lack of managing those inefficiencies can often be the bane of big companies; a lot of friction is created because of it. These are the things companies need to focus on if they want to to act like a start-up and win like one.
I would also argue that most Fortune 500 CEOs will have to change dramatically for the “act like start-ups” hyperbole to actually come true. One thing I always notice is that, due to the nature of their business, so many of these CEOs can’t think past the ninety-day or one-year maps that they have put together. On the other hand, most start-ups, when working at their best, are looking to disrupt the market three to four years from now instead of tomorrow. Like the GE study concludes: businesses need to be in the business of disruptive innovation. But like the study has also shown us: so many businesses are nervous or timid.
I have so much empathy for executives on why this is difficult. I rant and pontificate, but I see that they are playing a different game and I don’t judge that. But the issue I have is that they are knowingly playing that different game. If you asked 500 CEOs of the biggest companies to honestly evaluate their current strategy, 470 of them would say that they are not putting their company in the best place to succeed four years from now. Unfortunately, that is because everyone is playing to Wall Street; their short term bonuses and finances are tied into those results. We just don’t live in an era where publicly traded companies are considering the long term.
The GE study advises that we all work to disrupt and innovate more. But how do you go about innovation while simultaneously running a business day to day?
At my businesses, I employ what I call an 80/20 rule. 80% of my time is spent running the best business I can possibly run, going all in on making revenue for the company to continue day to day. The other 20%? Dedicated entirely to exploring ways we can innovate, ways we could put ourselves out of business. I’ve never run either one of my companies as profitable as they could have been in a year because I’m always siphoning that 20% to acquisition, investing, or exploring new products and services (that I, fyi, don’t even know will be successful).
If you can be so good that that 20% is possible, you should absolutely create a team that only focuses on that 20%: disruption. And you need to get serious about it. That 20% can’t be offsites. It can’t be talking to the media. It needs to be time, money, and resources to be able to compete with all the disruptive technology that are vying for your market share.
Disclaimer: GE, who runs the publication that Marco Annunziata’s article was originally published in, is indeed a client of VaynerMedia. Marco is also an employee of GE. Just thought I would mention it. :)