Run Your Enterprise Like a Startup (Or Die Not Trying)

C-level executives hear the whispers: “Innovate…or die.” Um, or…not. The company’s profitable! Full steam ahead! Stifling the voices in one’s head is easier than change!

For most enterprises, the “killjoy” mandates of governance, compliance, risk management, and the like can stifle ingenuity. Creativity threatens the comfortable, “steady-as-she-goes” mentality found in even the strongest companies. Some C-levelers understandably fear change—opening the floodgate of new ideas can be a daunting, unwieldy, even threatening proposition.

Here’s the thing: Complacency kills. The indolent enterprise invariably loses out to the gazelle startup. The most successful big companies, including Amazon, Dell, Google and Microsoft, all embrace their inner entrepreneurialism and encourage employees to dream big about existing and future products and services. Some companies even create environments where devotees, business partners, and other ecosystem stakeholders can contribute. These established companies make breakthroughs, introduce new revenue streams, and keep customers engaged.

Can the Big Boys Reclaim Their Entrepreneurial Spirit? (Maybe.)

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In a Forbes column, management consultant Ron Ashkenas questioned whether a big company can truly recapture its startup spirit: “Employees of large established firms operate with a different sense of risk and reward, reassured by financial security and structure.”

Large company employees, he observed, “focus more on protecting and preserving their existing businesses than on breakthrough innovations that might cannibalize or destroy them.” Sound familiar? Thinking outside the box is risky.

Contrast that perspective to the startup culture, an environment which according to Ashkenas, is brimming with people driven by three characteristics: “strong belief in the new venture, the adrenaline rush of living on the edge, or the potential size of the prize.”

Startups are nimble (perhaps even gazelle-like!), and can react quickly. And that’s because they have to be. For startups, failure is an omnipresent risk. And for startup employees with “serious skin in the game,” it can be all or nothing. (A rather extreme example: One successful Silicon Valley entrepreneur, when asked why he succeeded where others had failed, noted that he had “burned every bridge” to his past professional life, and therefore at no point could have ever questioned his own commitment to his startup vision.)

Want to Win? Get Hungry.

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Hunger can drive creativity, typically out of necessity (and often under great pressure). It can also lead to innovation and, sometimes, even market success. Startups tend to run lean, operating on little capital investment in the early days. Most importantly, startups are free from the bureaucracy that fetters even the most progressive of large companies. They are agile enough to respond to shifting market forces, decisive enough to change direction quickly, and tolerant enough of failure to take risks.

And big enterprises need to be more like them in those ways. The University of Michigan’s James Price noted that as organizations grow, they get too bogged down in process. “It’s too easy when working in an established organization,” observes Price, “to develop a certain rigidity in how one approaches decision-making and day-to-day operations.”

As companies grow, silos can develop, and so can bureaucracy, fueled by the need for more and more workflow gateways, with concocted checkpoints and inputs and approvals. The more people involved in “facilitating” a workflow, the more likely it’ll be ponderously slow, delaying time to market and understandably frustrating a company’s innovators. Governance, compliance, and control are essential to management success, but done wrong, can impede forward progress.

As Amazon CEO Jeff Bezos has noted, “Even well-meaning gatekeepers slow innovation.” When startups are absorbed into larger organizations, some startuppers pick up their toys and go home, rather than confront the roadblocks thrown up by the policies and procedures of the larger organization. Others pursue so-called “Shadow IT” projects, pushing apps to an outside-hosted provider away from IT management purview, you know, since it seems faster to bypass those control gateways in the name of innovation.

 

Price advises large companies to “ski with [their] knees bent” so they can react and respond to changes on the metaphorical slope. He calls this flexibility “a crucial advantage for corporate executives as well, whether in accommodating change in existing markets or tackling new business initiatives.”

Cats Don’t Like Hurdles

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This strategy must also be applied to IT. Herding cats is hard enough without obstacles, and it’s imperative that enterprise IT management be flexible enough to accommodate the innovations of rogue cats.

The best way to do this is to head to the cloud. Offering up a high-performance public, private or hybrid cloud-based platform enables IT to maintain oversight and security through unobtrusive, yet sophisticated,  middleware, without getting into the weeds of procurement and configuration.

At the same time, developers and business leaders get an on-demand platform that satisfies their toughest requirements. Virtual machines can instantly be spun up without waiting weeks for approvals. In that time, employees and developers just might come up with a unique feature that will lead to a brand-new revenue stream or boost customer satisfaction. Moving computing environments dedicated to research, development and prototyping to a scalable, cloud-based model enables executives to turn up the volume on innovation, development, and collaboration.

One-time-startups like Google foster an entrepreneurial culture, even as they grow. Google employees famously allocate time to customer-focused project brainstorming. Also popular in Silicon Valley: hackathons  aimed at identifying and executing on innovative, customer-focused ideas. That preservation of startup-tinged thinking is a cultural effort. But flexible thinking (especially from potentially rogue cats) demands flexible technology, which is why the startup approach—even in a big company–is always going to be best supported by a flexible, elastic technology platform. And those big corporations that sit still, sustain the status quo, ignore the entrepreneurial spirit within, and continue to think inside the box? Well, with nimbler competitors poised to strike, they might not stay big for long. (But maybe that might make them hungry enough to finally get to the cloud. Maybe.)

About Bart Copeland

As President & CEO of ActiveState Software, Bart Copeland brings more than 20 years of management, finance and technology business experience to his role. With a passion for technologies that help people lead more productive and enjoyable lives, Bart is currently focused on ActiveState’s private platform-as-a-service (PaaS) offering, Stackato. With his vision for PaaS as an enabler to accelerate cloud adoption and value in enterprises, Bart is actively involved in the strategy, roadmap, business development and evangelism of Stackato. Bart is also an active angel investor and serves as a director on a number of other tech companies. He holds an MBA in Technology Management from the University of Phoenix and a Mechanical Engineering degree from the University of British Columbia.