Startups vs Corporates

“Numbers along the starting line on a running track” by Kolleen Gladden on Unsplash
“The irony is that startups want to be corporates and vice versa”

I’m pretty sure that is a quote paraphrased from a talk by Jared Spool. His point was that startups are trying to find sustainable business models and to grow (ultimately into a large company). Meanwhile corporates are often trying to emulate startups; to think faster, innovate and launch products more efficiently. Both want what the other has.

So nobody really has it easy.

I observed a lot of ‘startup envy’ when working in corporates. These young upstart companies just kept emerging and launching stuff quicker than the giants. Execs didn’t really care, but then some of those upstarts became huge companies making a shitload of cash. Then they were paying attention.

Surely the answer was to ‘be more startup’? But can you do that? Or do you have to optimise for the company size you have? What, if anything, can corporates learn from startups?

Hierarchy

If you are a large company, you need some kind of structure, teams, people knowing where they report into etc. All those are fine and can be beneficial to staff, giving them clarity on roles. But in corporates you still get the remnants of traditional hierarchy which boils down to the important people and the less important people. Importance is indicated by job title (MD, VP and all that jazz), the glass offices, the number of air-miles clocked up, the hushed tones in which said individuals are referenced.

I believe that this is pointless and toxic to workplace culture. Most staff end up fearing the big bosses, whose inboxes fill up with requests because no one else feels empowered to sign things off. They lose touch with the products they sell and become bottle-necks for progress through no fault of their own. And the reality is they don’t know it all, they just have to pretend to. Throw the chronic lack of diversity at the top of most large companies into the mix and you have the perfect storm for mediocrity. You’ll see the results in the new product development or lack thereof.

In startups there is much less of that traditional sense of hierarchy. Founders and leads make themselves accessible. They are typically very close to the subject matter of the company, active in the industry and they want to share the vision. Startups know that decisions have to be made efficiently to move quickly. And they simply don’t have enough people to create complex decision making chains. So hierarchy in the traditional sense doesn’t have to apply.

What could corporates do better? Position leaders as facilitators, not decision makers. Share information openly so everyone can access it. Flip the status quo every now and then.

Wearing different hats

If you work for a startup, you could easily find yourself doing multiple jobs. The tasks keep coming and the allocation of them is practical. Who knows about this thing? Can you do it? Give it a try! That is a big advantage for anyone who wants to learn new skills or who prefers a diverse workload. It’s motivating too. Staff can take on a project knowing that they are breaking new ground for the company.

This is harder for corporates due to the number of people they have in silo’d specialist teams. People tend to adopt a mindset of ‘this is my job’ or ‘this is not my job’. You might work in email marketing, but someone else owns the email database, and someone else manages the branding. It can lead to either overstepping the mark and doing jobs other people want to do, or not doing anything because it requires impossible levels of co-ordination. It also means people get pigeon-holded and treated as if they only have one skill, when most of us are multi-faceted. This restricts development and progression.

What could corporates do better? Offer more sabbaticals, job swaps and cross-functional working for staff of all ages. Listen and reward it when people want to learn something new.

Fail and learn fast

The biggest difference between corporates and startups is the speed at which anything gets done. Startups necessarily pivot every time they see a need. They can start out doing one thing and change the mission completely if a better opportunity arises. But the more established a company is, the more deeply entrenched its narrative is in the collective mindset. If you try to change a company that has had the same business model for decades into a different type of company, it will take time. That isn’t always a bad thing when you can retain the unique assets you’ve built up and repurpose them to meet the needs of a new audience. But it requires a long-term view and commitment. And it can get boring for those who want to move quicker.

We hear a lot about startups and their ability to fail fast. They are all about analysing their mistakes and learning. Corporates are keen to encourage this mindset, but it’s still a difficult thing to admit failure in a large company. Maybe that’s because everyone has to keep up appearances, especially in the traditional hierarchy. The rewards systems at play tend to focus on meeting your targets, not completely missing them (even if that was a useful learning experience for you personally or for the company). Startups tend to focus more on the bigger picture. If overall milestones are met, a few bumps along the way are expected. And done really is better than perfect.

What could corporates do better? Share more stories of the ups and downs in business. Focus staff objectives on personal development and reflection.

What can corporates teach startups? It’s a topic for another post but principles of good management, process and planning spring to mind. I’d love to know what you think!