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You Don't Need To Act Like A Startup To Innovate

Large companies can innovate at the same level as startups, but only if they rediscover their potential

5Sep

Startups are extremely popular today, and rightly so, strategists and CEOs of large companies are jealous of their success and the attention around them. Intimidated by the performance of Netflix, Airbnb and Uber, companies desperately try to 'act lean’, adapting their innovation strategies to 'startup standards’. The danger here is losing stability in the market, whilst trying to pretend you are someone you are not. Chasing a startup style is unnecessary, and in fact - large companies never needed to act like one to perform as successful innovators.

It's true that large organizations are not as mobile in their decisions as younger companies. But at the same time, the high speed of execution in the startup world is due to desperation to pass crowdfunding and a product launch targets, and only then thinking about longer term business models. A popular figure that 90% of startups fail, is because in business you should do it the other way around. Large companies, on the other hand, tend to act more carefully (sometimes slower), considering all mistakes from the past. However, matureness and experience are not downsides but a bonus, and agility can be present in all types of companies - established or young.

Unlike startups, large companies have to focus on a large number of tasks, whereas startups usually have a single mission - to execute a single idea. In fact, startups are in many ways jealous of large companies, because the main targets of startups are growth and survival - two factors mature companies have already and know how to operate with.

There is a misbelief that startups become successful instantly thanks to the media only covering a moment of glory for those companies. Take Airbnb - an example of not giving up, who successfully created a completely new niche in the market. However, not everyone is aware that it took founders 7 painful years of searching for investments, accompanied by negative PR, to get to where they are now. Established companies, in this instance, are lucky as they can afford mistakes which can be backed by extra funds and a plan B in case of failure. Due to having a reliable business model, it's much easier for large companies to experiment, fail, and repeat, without making big changes to the existing business model. Innovation is nothing without experiments, so if large companies don't experiment - they are simply missing out.

There is another belief that startups are better at teamwork, and corporate cultures are often defined as having problems, where poor performance is due to ineffective leadership and management skill. Indeed, a good corporate culture requires more maintenance and attention than a team of 10 in a start up, and often, corporates underperform because employees struggle at the workplace. However, a solution for that has nothing to do with startup principles, as breeding creativity can be achieved through other practices. Google is a good example, where the company promotes flexible hours and various types of training to help employees achieve greater results, without sacrificing a life-work balance.

Startups and large organizations perform better when they are not compared to each other. Occasionally checking on competitors is important, as well as picking up the best practices of a startup or large company, but copying and trying to act like someone you are not on a business level would not bring any benefits.

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