Lessons from start-ups?

No matter how large, small or long in the tooth, to thrive in today’s fast moving business environment organisations need the flexibility to turn on a sixpence.

Here, Peter Proud, founder and CEO of Microsoft tech partner Forrit (who is also a professor of entrepreneurship and an ambassador), discusses how harnessing innovation and agility, and other aspects of start-up operations, can breathe new life into your entrepreneurial spirit.

Just as small businesses can learn from big companies, the reverse is also true. There are many lessons larger businesses can learn from their smaller counterparts which can help with both strategic development and employee retention. Agility is one of the most commonly cited benefits of a start-up. The idea of lean operations and a fast, adaptable work environment makes sense for businesses of all sizes and ages. Lean operations mean trimming the fat and not spending unnecessarily. A fast work environment is one that isn’t bogged down by endless meetings and which encourages people to get things done. All businesses should strive for this.

Staying relevant in a constantly changing business environment requires adapting and learning lessons from even the most unexpected of teachers

Agility is also closely tied to flexibility, something that businesses should embrace in all aspects of their operations. For example, we recently hired a graduate apprentice to work as a software developer but found his skills were better suited to processes and procedure. A larger company may have kept him in the developer position, but we adapted his career path based on skill set. He has become a fantastic addition to our security team, but we wouldn’t have known that if we kept him in his original role. By treating people as individuals, rather than a cog in a machine, you’re giving them room to grow. In other words, know the value of your employees, not just their cost.

Develop leaders, not managers
Big companies tend to have managers, not leaders. Where leaders inspire and make people want to do the best job they can, managers follow blueprints and focus on hitting their own objectives. Start-ups tend to be more collaborative and encourage input from the whole team in the decision making process. This has a number of business benefits, such as increasing employee engagement and gaining buy-in from those who will be implementing the solution. Questioning management also helps senior staff become more aware of their own limitations and avoids groupthink.

Employees at bigger companies are often scared to question their bosses’ approach, worried it might put their job at risk. However, a transparent, collaborative work environment builds trust among colleagues and should be celebrated.

While some people might be unsure whether they can question the CEO, or any senior manager, I’m always happy to hear opposing viewpoints. After all, leaders have the confidence to be wrong, whereas managers often feel they need to be right in front of everyone.

Tear down the siloes
Similarly, many big companies operate in siloes, with each department focused on their own objectives. While it may seem like it makes sense to let the experts do their jobs without outside influence, it actually isn’t ideal for most businesses. When working in siloes, each department will have its own business objectives, and their goals won’t necessarily be aligned. Start-ups don’t work like this – nor should any business. Talent acquisition is a prime example of why.
Hiring practices should be driven by the needs of the business, both now and in the future.

Apprenticeships, for instance, are a long-term investment in the company’s future and the next generation of talent. I’m a huge champion of apprentices and believe they are a driving force towards closing skills gaps and helping businesses develop a competitive edge.

Leaders inspire and make people want to do the best job they can, whereas managers follow blueprints

However, Human Resource and finance departments are more likely to seek a quick turnaround on their investment in people and thus discourage hiring apprentices. The long-term benefits to the business should be weighed against short-term financial gain, but that’s less likely to happen at larger companies.

Look at the bigger picture
Running a business is a long-term initiative, not one that can be broken down into quarters. Yet, many larger companies focus heavily on quarterly reports. This is in part because they need to satisfy shareholders and investors, but also because bigger businesses often fall into a pattern of conservatism and tying their spend and income plans together. For example, if you’re having a bad quarter, cutting travel might make sense from a financial perspective. However, on the flip side, spending more face time with clients might be just the thing you need for business to pick up next quarter. Start-ups will often take this approach. This is because they are fighting for survival rather than focused on their budgets, but their willingness to take risks means they will reap the rewards.

Think small
Business leaders at larger companies may think their experience means they don’t have lessons to learn from newcomers – or that their size means they can’t put the lessons into practice. But that’s not always true. You don’t need massive numbers of employees to come up with great things. You just need the right team. This is especially true when developing new products. The risk of cannibalisation is real, and many businesses find it difficult to put work into creating something new that could go against their existing business model. The original legacy teams might stifle new product development, so setting up a new, small and discreet team would reduce that risk. This is the exception to my aforementioned view on siloed work practices!

Start-ups are less likely to need this approach, as they don’t have legacy teams or a long-standing investment in a particular product line. It’s a lesson for bigger businesses to look forward rather than focus on how they’ve spent their time in the past.

It’s easy for large companies to maintain the status quo – after all, it’s worked for them so far. But staying relevant in a constantly changing business environment requires adapting and learning lessons from even the most unexpected of teachers.

Peter Proud in profile...
Prior to founding Forrit (a global software business headquartered in Edinburgh), Proud was Managing Director of Strategic Accounts and Partnerships for Accenture Interactive Digital Practice, providing integrated marketing, technology and analytics solutions. Before Accenture he worked at Microsoft for 14 years managing accounts for some of the world’s leading household names and played a key role in establishing the One Microsoft initiative. Proud is also an entrepreneurial ambassador for Young Enterprise Scotland and a visiting professor at the University of Strathclyde’s Hunter Centre for Entrepreneurship.


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