Survival of the Fittest (Startup)
8 strategies for building a resilient company
By Nikki Blacksmith, Ph.D. and Mo McCusker, Ph.D.
Only one out of every 10 startups survive. That’s a 90% failure rate. Put otherwise: only 10% of startups are fit to make it in this day an age. Darwin’s theory of natural selection (AKA survival of the fittest) claimed that any species that were best suited to or fit for their environment would survive. All others would die off. It may sound like a stretch, but start-up organizations are not all that different. So what does it mean to be “fit” to survive?
Dr. Blacksmith and colleagues conducted a research study to identify characteristics of the “fittest” organizations. They found that organizations that used the following 8 strategies were more likely to survive over the course of 100+ years than those that did not.
1. Be in the Know
Like the species in Darwin’s work, startups do not exist in isolation. Startups are part of a much larger system of organizations embedded in an even larger socio-economic environment.
If your employees are too focused on internal affairs at the expense of broader systematic matters, they will have a hard time adapting to inevitable change. Make sure that you integrate policies and procedures that ensure employees are staying up-to-date and paying attention to the dynamic environment in which your organization exists. If you can do this successfully, you will be more likely to identify potential opportunities and threats.
2. Forecast the Future
Being fit also means that you must anticipate changes before they happen.
Take one step beyond simply understanding the external environment; use information about the current environment along with data to predict future trends and environmental changes. Listening to your customers and anticipate their future needs is part of it, but nowadays we have the ability to use data, modeling, and advanced analytics to predict the future. If only predictive modeling was around in Darwin’s time, then he would have predicted that black hawks would be writing blogs…
3. Hold a Change Mindset
There is only one constant in our world: change. Like our natural environment, our socio-economic environment constantly evolves, and to survive through the changes, organizations must evolve as well. Accepting that things will never stay the same and welcoming novel ideas and alternative processes are critical to survival. If you want your organization to succeed, you have to imprint a change mindset: inspire your employees to think about change as a constant and to embrace it as part of your culture. Instill a belief that getting too comfortable impedes growth, so embrace evolution.
4. Instill Organizational Confidence in Employees
In order for adaptation and agility to occur, individuals must believe their unit will succeed in the changes it makes. Employees must feel confident that the organization has the ability to make the proposed changes. The best way to create a feeling of assurance and confidence within employees is for the executive leadership, itself, to be confident and to transparently communicate the changes and their ideas surrounding it. Organizations that are characterized by shared beliefs of confidence and self-efficacy are more likely to implement change successfully.
5. Strategically Stockpile
With the need for substantial organizational changes comes the need for a large number of organizational resources. Address your organization’s here-and-now needs, but as you do so, go ahead and gather and bury those acorns to have on hand when you need them. When we say “resources,” we mean everything from human to financial to informational. So hurry up and start stockpiling- winter is coming!
6. Collaborative Action Planning
Change within an organization cannot happen within a single team or department; it must involve the whole pack. Build the infrastructure in your organization that facilitates multi-unit teamwork and collaboration across teams in the organization at large. Divide and conquer strategically as a unit, but do
7. Execute Change
This may seem obvious, but often organizations are great at stimulating ideas but remain in a state of inertia. This can happen for a multitude of reasons including the inadequate infrastructure, conflict within and across teams, or decision-making friction amid the leadership. What’s more common is that an organization has a great idea but falls flat on the execution, creating a bigger problem than the original. Organizations that are able to effectively execute ideas and changes by having the appropriate methods and procedures in place are much more likely to see the change through.
8. Bring on the Reinforcements
One of the most commonly overlooked aspects of change is the reinforcement of change. Humans are creatures of habit and naturally, resist change. Therefore, it is paramount that you develop reinforcements. Reinforcements can take the shape of training and educational programs, providing rewards and recognition for behaviors related to the change, or ensuring the top-level leadership supports the change publicly.
So if you want to be in the 10% of startups that survive, build an agile organization.
References and Resources
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Costanza, D. P., Blacksmith, N., Coats, M. R., Severt, J. B., & DeCostanza, A. H. (2016). The effect of adaptive organizational culture on long-term survival. Journal of Business and Psychology, 31, 361–381.
Gelfand, M. J., Leslie, L. M., Keller, K., & de Dreu, C. (2012). Conflict cultures in organizations: How leaders shape conflict cultures and their organizational-level consequences. Journal of Applied Psychology, 97, 1131–1147. doi:10.1037/a0029993.
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