What big businesses can learn from startups
Big business has the manpower and the money, but in 2017, startups continue to prove that creativity and speed are the new vital elements of success, according to Omnia
Ask anyone to name the major differences between startups and corporations and you’ll likely hear one of the following; lean processes, ambitious outlooks, new technologies and… funky office spaces.
But is there more to it than that? What alternative business practices and innovations are actually fuelling startup success and - more importantly - how can big businesses incorporate these into their own models?
Here is our list of the top ten things big businesses can learn from startups:
1. Use all of your workforce effectively
Employees in startups differ from corporate employees in two major facets; accountability and creativity. Startup teams will often feel equally invested in the business. They are a small group, working tirelessly together, to build something they really believe in. The lack of resources and the need for quick successes means that people will find themselves working across specialities and levels to get jobs done.
Big businesses can empower their employees to replicate these feelings of positivity and loyalty within their own organisations. The key is breaking down any rigid hierarchies or tiers of responsibility. While a bigger company needs managers and departments for control, it can’t stagnate within these.
Giving staff the autonomy and trust to work alone is a huge motivator, as is their sense of being listened to. Motivation makes people more productive. Freedom to be creative brings forth innovative ideas. Fluidity of staff across teams can also allow the full use of their time, while developing new skill sets and keeping people constantly challenged and engaged in the business.
2. Limit bureaucracy and unnecessary sign offs
Obviously business practices have to change as a company grows. Some bureaucracy is inevitable. What isn’t inevitable is the too-common big business mindset of keeping the status quo, or minimising loss. In stark contrast, startups operate on a “gain as much as possible” mentality.
To achieve such a gain, startups are famous for fast-paced productivity. This can only be accomplished by limiting the flow of people and bottlenecks in the decision-making processes. Big businesses can still find ways to emulate these work-flow models. One simple way is the introduction of smaller teams, with the autonomy to make fast decisions, as long as the risk is minimal.
Such units tend to be highly motivated, bringing innovative ideas and solutions to the business, in an entrepreneurial way. All business decisions don’t have to democratic. And teams can be empowered through the autonomy and respect their smaller units receive in the bigger structure.
3. Seek efficiency
As a general rule, the larger the corporation, the more inefficiencies you will find. Often it is a natural (if unwelcome) side effect to growth. However, inefficiency also exists in big business where it shouldn’t.
Sometimes through employee negligence or laziness, other times through management negligence, or indeed laziness. Even the simple attitude of doing what we’ve always done leads to reliance on simple tools like emails and meetings, where more time-efficient methods could be used.
In stark contrast, startups will continually assess themselves as individuals and as an organisation to see where the hold ups are. They also make a habit of scanning their industry environments for the latest trends and tools to adopt which could positively impact their work flows. The startup culture of “pivoting” means they see critical self-analysis as a positive exercise, looking for ways to be better, faster, more efficient.
4. Invest in talent and then nurture them
Fostering a culture where employees feel valued because they can see they are personally responsible for organisational success is something startups excel at.
In many ways, the sourcing and hiring of talent should not differ from big to small companies. If anything, larger corporations can offer more long-term financial and promotional opportunities. Unfortunately, in an effort to be more efficient (see above) big businesses can delegate all their talent recruitment to HR departments who just want to make the process of sifting through paperwork easier.
Tick boxes are never the way to spot talent. Big businesses can continually horizon scan and watch for the industry up-and-comers, the movers-and-shakers, and hire them before the startups do.
Of course the effort doesn’t end when said talent enters the building. Nurturing talent can be achieved through those smaller teams, creative input and challenging them to innovate. It can be as easy as giving employees the freedom to try their own techniques or ideas, free from ridicule or fear of failure.
However it can also be achieved through behaviour modelling - something startups do naturally, because the founders and senior staff work physically alongside their teams much of the time.
So it’s important for big businesses to make time to be with, get to know and influence their employees. Set the cultural tone, encourage and empathise. After all, great leaders aren’t born, they are made.
5. Prioritise creativity and the best ideas
Corporations have controls, systems and bureaucracy because they need to account for everything. Profit margins, budgets and loss must all be set against every hour invested to ensure continued success. You can’t do that effectively without a lot of analysis and data.
Data is absolutely vital as part of the overall picture of the business. The problem comes when the facts aren’t viewed in context or when they hinder informed risk-taking. Companies can end up trying to squeeze a little out of the margins instead of gaining a lot by doing something completely new. Startups by their very nature exist because someone took a risk.
They often don’t have the data to validate their ideas, so they simply have to experiment. They have to take risks. But those risks are calculated. And the ones that work succeed because they have been creative, they have found a new way of doing things, a new product to meet new demands, or they have filled a gap in the market.
Big business has the room to do likewise, they just have to give creativity a focus. Those small solution-finding teams, that culture of being listened to, that attention on efficiency by self-analysing, are all methods that will ultimately lead to the need for creative solutions. And just like startups, with a little financial backing and some calculated risk, the best ideas can be brought to life quickly.
6. Don’t just throw money at social media ads - take the time to learn your audience and what they are likely to share
The digital revolution in corporate communications has been swift. And it hit big business the hardest. With their cumbersome sign-off systems and their traditional methods, startups and entrepreneurs were naturally more suited to engaging potential customers online and building a loyal following quickly and authentically.
Big businesses exist in the size and success they do precisely because they have a big audience base. If the business has been around a long time, this audience base is likely to be loyal too, perhaps generations of customers in one family. But playing catch-up doesn’t justify playing lazy. It can be tempting when you have the financial resources to simply move what you’ve always done (mass advertising) online and think “job done.”
In reality, this is one of the key areas where the startup boot-strapping of budgets actually benefits them. They are forced to use the free option of simply communicating with existing, old and potential new customers. Modern audiences know how authenticate this is and they respond positively. This opens a wealth of market analysis about what they want from you, how they think, and also crucially, what they think and how they feel about your competitors. It is the gap between all these things that gives startups their ideas.
7. Engage with your audience, tell your story and make your brand personable
The eternal challenge for larger companies is that they have so many stories to tell but often don’t have the skill to tell it. Whether it’s a long history, a famous founder, or a wealth of personal and professional stories among their staff. There is so much more of interest and depth to offer customers than simply what products or services are sold.
Big business also regularly falls into the trap of becoming “faceless.” Too large and convoluted to the public to ever be able to have a voice, a personality, or to speak in a one-to-one capacity. Yet here, again, is where we learn from startups. With small, expert teams, often each has a public persona, and is encouraged to become an industry voice, particularly online. Startup founders take audiences on their journey with them in complete transparency (publishing the good and the bad).
Big businesses have a larger pool of people, but will no doubt have equal talent. It can be as simple as allowing customer service agents to put their own name to their social media posts. Or it can be as strategic as developing senior staff across disciplines to become thought leaders in their fields. All these facets together, alongside the corporate communications, merge to create a more dynamic and multi-faceted voice. They become a brand personality.
8. Engage with your competition
When businesses make it big, they retreat from any engagement with competitors. Maybe it’s the need for confidentiality, asset protection or simply maintaining a competitive advantage.
Startups don’t have this luxury. Instead they often work alongside other startups, share their experiences entrepreneurial support environments or pitch together to investors.
However some of the greatest successes brand growth and innovation come when large organisations work together. It can be multinational corporations and charities, local businesses and local government. When businesses give their team the freedom to seek out and explore those partnerships, it can bring the data and ideas needed to spark innovation.
9. Become your biggest competitor
With competition in mind, it can be easy to assume that startups don’t experience competitors the way big businesses do. When your idea is completely new, or your product is completely unique, how could they possibly understand the challenges of established businesses operating in saturated (and now global) markets.
In actual fact, startups face some of the greatest competition. Because they are competing with themselves. In order to even break into those marketplaces, they have to constantly innovate, test and redesign, pivot, test and innovate again. It’s a ruthless process. And even when they achieve success, the immediate next step is an attempt to out-do their own success, to improve on what they’ve already created.
This mindset within the startup world is what fuels the sector’s huge successes. It is when big businesses stop challenging and innovating in this way that they stagnate. The switch to merely protect the market share they’ve achieved, rather than change or grow it, is what gives space for other businesses (or startups) who have been focussing on finding the gaps and building solutions for them, to come in and take their market share. Adopting the startup mindset can ensure this doesn’t happen so easily.
10. Take advantage of the digital economy
For many in big business, the digital era has created more problems than solutions. Investing heavily in technology, navigating online marketing and securing against cyber risks are now all top-level priorities regardless of the field of business.
What we see from startup land, however, is that often big businesses aren’t fully utilising the best advantages that online operations can bring. Just as doing business globally offers opportunity for growth, running the business globally brings business solutions too. Remote working teams is a prime example.
Startups will often source the best talent from far outside their geographical location. As they grow, they will encourage staff who need time off for family reasons or others, to work more from other locations if it keeps those employees loyal and engaged throughout a lifetime that can bring changes to us all.
Similarly, startups are often ridiculed for their playful office setups and breakout pool table zones. What they’re actually doing is building an environment that feeds creativity and breeds contentment. There’s no reason why big business staff all have to wear suits. And there’s no reason why coffee shops should only contain freelancers or entrepreneurs. Cloud technology makes it possible to work anywhere, anytime, without compromising security.
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