Three lessons for large corporations from startups
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Transcript of Three lessons for large corporations from startups
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Three lessons for large corporations from startups
A few weeks back I was at the TITAN campus in Bangalore, sharing the story of “3M
Car Care” stores business. In attendance for the event were a couple of managers from
different 100 year old pedigree MNCs. The story telling session was to be followed by
a panel discussion. The proposition under scrutiny was "Entrepreneurs are born, not
made".
It was surprising for me to find that a good number of audience felt that entrepreneurs
are born, not made. Over the next few days, I spoke with a few friends in the start-up
world and learned that this was quite contrary to the way professionals working in the
startups thought. They often identified themselves more as entrepreneurs than
employees. It was not uncommon to see employees of start-ups go on to start their
own business.
The reason for this, a startup founder told, was that good startups steep their
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employees in a culture that helps develop that entrepreneurial streak in them. The
founders are quite careful about nurturing a work environment that constantly
mitigates an “I am an employee only” mentality and promotes the feeling of being
part owner of the company.
So what can large corporations learn from startups?
I posed this question to a visiting Executive Director of 3M from St. Paul, a frequent
visitor to the Silicon Valley for meetings with VCs and startups. I got an interesting
quip on this. He said that often startups want to become large corporations and large
corporations want to become more like
startups. So each camp had a thing or
two to teach the other. In the following
paragraphs I encapsulate 3 ideas from
conversations with some people in the
startup world and my thoughts on the
subject-
1. Adopting culture vs. adopting practices
Often large corporations tend to adopt certain startup practices rather than adopting
culture. While adopting practices might be a good start, adoptingcertain cultural
values may have a more profound impact on large corporations.
BMW is a great example where they have built a new entity from scratch through its
“BMW i brand”. It is an effort to almost create a new culture that competes with the
existing business and is run in a very different way. It focuses on projects with
partners from the fields of art, culture, design and architecture or with other premium
brands offering products that complement BMW i vehicles.
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3M itself has a very inspiring New
Growth Venture (NGV) program where
employees across the world can pitch
new business models or products. This
pitch is made to the absolute highest
management called “the NGV Board” in
Minneapolis. Much like the seed funding
round in the startup world, the employee has to make a case for funding the venture.
This funding can be as low as a few hundred thousand dollars to a million or more. In
case the funding is approved, the venture leader has to keep up with the KPIs to get
continued funding.
2. Measuring start-up culture
Large companies do a great job of creating measurable operational KPIs. This is a
must do to run a large corporation. What they can additionally do to breed the startup
culture is to develop KPIs that measure innovation and creativity.
Companies need to be careful in defining such metrics. Example, number of
innovation patents filed may not be the best metric to measure startup culture. Some
good metrics could be - What part of the year’s revenue for the company came from
products or business models launched in previous 3 years (this is a very important
metric at 3M) or how many people submitted formal proposals for funding new
businesses or product launches within the company. Even a crazy metric like how
many people left the organization to start their own enterprise may indicate the vitality
of the culture in a company!
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3. Auditing and dumping antiquated policies
Penalizing people for getting late to work, frequent flier miles belong to the employer
not employee, bell curve performance reviews etc. are some policies that are common
in several large corporations. In today’s world, an employee works long hours on
weekdays and sometimes on weekends; traveling is a toil,you leave your family and
life to spend countless hours in planes,
airports and taxis. Why would a
company insist on keeping these
miles? Bell curves accept the fact that
the company has a large number of
average and poor quality employees.
Why would companies not eject them
and have the best employees only?
Companies should look at each policy
with a hand lens and tweak, modify or dump policies that are stopping their
employees from achieving brilliance.
Some fantastic lines from a post “ Why I hope we always remain a start-up” by
Naveen Tewari, founder of Inmobi sums up the essence of this article. This is how it
goes-
“I believe that when processes take over passion, when the spirit of entrepreneurship
begin to flicker in people, when culture becomes just a poster, happiness and fun
become a concept, and people become machines - that’s when a company ceases to be
a start-up”
Large corporations, make a move!