Why Big Companies Have a Startup Edge by Inc.com

“Why Big Companies Have a Startup Edge” | Written By: Howard Tullman / Inc.com

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Startup

The Innovation Advantage of Big Companies

Yes, it sounds like a contradiction. But large organizations are in a better position to create startups with staying power– if they learn to stay out of the way and provide the right support.

By Howard TullmanExecutive director, Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship, Illinois Institute of Technology@tullman
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Launching and developing a new venture inside of a traditional organization is probably harder to do than a pure startup. But ultimately it’s far more impactful, because you also create a new entrepreneurial culture, a real sense of urgency, and a bias for action and change along with that venture.  For example, there’s Arity, an exciting and rapidly growing division of Allstate,  which started as a tiny outpost hidden in the Merchandise Mart in Chicago, far from the insurer’s suburban headquarters. Arity focuses on mobility solutions, navigation, and autonomy tied to transportation, and it’s a great example of a properly funded and supported internal startup “tail” that is setting the innovative curve and wagging the whole corporate dog.

These days, because innovation and disruption are clearly so in vogue, this kind of initiative should have at least a reasonable prospect of success–even in large enterprises– as long as the people working elsewhere in the organization are at the very least indifferent to the venture’s success. I realize that this is a pretty low if unfortunately realistic bar for internal support and encouragement.  And I know life would be great if everyone in the business was onboard and universally rooting for the new initiative’s success – all for one and one for all.  But that never happens in the real world. Everyone’s a pessimistic expert and they have a million reasons why you’ll never succeed – a problem for every solution.

The passive-aggressive resistance and the overt opposition that all new ideas encounter could, in a given case, be driven by risk aversion, jealousy, ignorance or fear. Or it might be the ongoing competition for scarce resources, or a historic lack of technical skills.  But the friction is almost always – at least in part – the product of the sheer reluctance to change, as well as the comfort and reassurance of business as usual. Inertia trumps initiative and innovation in big business on a daily basis. If you’re looking for real change, it’s a waste of time and energy to fight the status quo and the habitual ways of doing things.  You’ve got to create a new model and a better way of doing things that eventually makes the old ways – “the way we’ve always done it” – look like yesterday’s news. You can’t talk a culture into changing, or simply browbeat people into getting better.  Progress begins only in the execution; then the culture starts to shift.

And, of course, it’s always a bad bet to assume that the same people who brought you to the precipice are going to be the ones to save the day. You can’t extract yourself from problems that you behave yourself into. Frankly, it’s difficult to see the picture when you’re inside the frame –even if you are so inclined– and far too few folks are willing to take a hard look. In most cases you’re more likely to confront willful blindness and a lot of looking the other way rather than any kind of supportive vision. This is sad for so many reasons and one of the main explanations for why, as a nation, we’re falling further and further behind in terms of large-scale innovative solutions in so many critical areas, such as medicine and education.

Successful in-house ventures, truth be told, are far more likely to have a greater and more consistent overall impact (if they’re sustained) than the random, under-funded and stand-alone startups that are on the outside looking in and mainly making all the noise in the media. Incremental improvement isn’t much of a story these days and certainly doesn’t drive views or clicks. Clearly, startups can provide the sparks, concrete examples and the inspiration. But it’s the steadfast stalwarts and the aggressive advocates inside the enterprises who have the heft, momentum, assets and clout to make the kinds of changes that will have long-term effects at scale as well as the kinds of impact that will move the economic needle in a meaningful fashion. They’re the ones who can take the new concepts, strategies and approaches that innovative thinking and new disruptive technologies create and ultimately turn them into major improvements in our businesses, communities and lives. That’s what Arity is trying to do. But only if they’re given the time, space and opportunity to do so and not constrained or crushed by the actions of others before they can even get out of the gate.

Ovid said it best a zillion years ago: “A new idea is delicate. It can be killed by a sneer or a yawn; it can be stabbed to death by a quip and worried to death by a frown on the right man’s brow.” The best leaders understand this fragility and make it their business to run interference for and forcefully protect their pioneers. They don’t sit back and let the folks “work things out” among themselves. They actively intervene when things are going sideways and send a consistent message that immediate and continual change is essential, unavoidable, and inevitable.  That there’s no place in the business for the people who can’t get with the program. They also set and enforce a tone of tolerance and, even more critically, they give their people permission to experiment and fail, without ever accepting the idea that failure is ultimately acceptable.

And they work continuously to identify, root out, and expunge the typical behaviors that will otherwise create barriers to success. These include the noxious naysayers, the “gotcha” guys just standing in the wings waiting for slip ups, the “by the book” bozos who spend their days looking backwards and longing for the ways things used to be done, the “management by committee” clods who’d rather delay everything than decide anything, the stewards of the concrete layer of middle management who are intent on making sure that nothing positive or productive ever gets past them, and the pure paranoids who think it’s all a pernicious plan to get rid of them.

But the most important thing that any leader can do in these circumstances is to make clear to those people who are always ready to presume the worst that it’s no longer a matter of giving the new plans and ideas “enough rope to hang themselves” or the “benefit of the doubt” because that won’t get the job done.  Empty gestures, cheap talk, lip service and hoping that ignoring things (or simply trying to stall and wait them out) so that they will eventually disappear are all failed strategies.   

To succeed today, everyone in the organization needs to assume the best of people and of the new opportunities rather than holding their breath, wishing for the worst, or fearing the future. They’ll need to lean into these new ideas and give them a little extra edge – a presumption and a push in favor of helping to make things happen – instead of dragging their feet and getting in the way. And, they’ll need to join in actively celebrating signs of progress along with the early successes and, at the same time, quickly forget and forgive the initial missteps – of which there will most assuredly be plenty. Or, if they can’t get with the program, they can always leave. We had a saying for this: “Our average employees now work somewhere else.”

Published on: Nov 19, 2019
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.
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“Why Big Companies Have a Startup Edge” | Written By: Howard Tullman / Inc.com
November 19, 2019 at 11:23AM
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