Tuesday, September 9, 2014

Thinking like a start up

We all fall into habits over time. Some good, some bad. Businesses are no different. One way to shed some of those habits - or at least identify them - is to imagine yourself as a start up.

There are many things that define start-ups. You might remember your own business in its very early days or be part of a start-up now. What defines start-ups is very different to what defines long established businesses because the longer you’ve been around, the more likely it is you’ve acquired a lot more overhead, process, staff, routine and documentation along the way.

You may be bigger, but you may also feel slower. Less nimble. You may feel less innovative, less connected to your customers, less involved in winning and delivering business. Your ability to listen to clients seems less effective and your ability to identify and then pounce on new opportunities is somehow more complicated.

Around you, new businesses pop up, with lower overheads and more agile management. They’re starting to ‘steal’ some of your clients. 

This is a common story, called free enterprise. Just because you’ve been around for 100 years means nothing these days: it didn’t mean much to the likes of Kodak, which went broke in 2012 after more than 100 years.  Likewise for RCA Victor, Pan Am, and many others. While some go broke others muddle on, mere shadows of their former selves.

Avoiding the trap of complacency and mediocrity in business is the subject of MBA Doctorates. But it does occur to me that if we could identify the qualities that helped a business succeed as a start-up, and re-apply them periodically, it might be a way to shed light on how some habits could be re-thought.

Imagine your team indulging in a session of ‘what would we do differently if we had to start over?’ I am betting plenty of hands would shoot up with suggestions, some of which might include:

We’d be taking more risks. Start-ups by nature have less to lose, so the whole venture is a high risk exercise. It’s a different way of thinking. How would that translate into an existing business?

We’d be much more hands on. Start-ups are ‘hands on’ by their owner/principals by necessity. There is no one else to consult, you just dive in and do it yourself. Is this quality worth re-visiting?

We’d be more decisive. Start-ups tend to make decisions quickly. Even rashly. Larger businesses can be much slower in the decision making process. Is lack of speed in decision making a handicap and if so, how do you address that?

We’d do things no-one else would. And you’d probably do them just because no one else would. Being bold, brash and cheeky are qualities that start-ups have that tend to infuriate ‘establishment’ brands.

Our values would be transparent. Start-ups are often closely aligned with the values driven by their founders/principals. This can clearly define their market position. Long established businesses sometimes lose this point of difference as the ‘corporate vanilla’ takes over. Large businesses can also have identifiable values: if yours could use some, how do you achieve that?

We’d be in cheaper space. The fancy office is a lovely thing to have, and if designed well, will add to productivity. But it is an overhead that start-ups do without.  Their market position is defined by the effort and sheer sweat of their owners, not by the business address or foyer fit-out. 

We’d get rid of HR. There are some large businesses I know that have never adopted the ‘HR department’ approach to personnel.  Some can’t live without it. But it does impose process and tends to blur lines of accountability. Are you top heavy with HR and is it a handbrake or an enabler?

We’d all be more involved in chasing and winning business. In start-ups, everyone’s arse is on the line, and it’s everyone’s job to be part of the new business effort. Larger organisations hire people like me to help them do what start-ups do themselves. How can you spread that new business load throughout your business so that more people are shouldering the effort rather than waiting to be fed?

None of this is intended as a catalogue of options but simply as a thought-provoker. It’s the sort of thing you can workshop in your own business if you’re starting to feel sluggish and are watching newcomers outmanoeuvre you for opportunities.

If you think it’s silly, that’s fine. But also think about people like Richard Branson, who seems somehow to have very cleverly maintained some of the values of a start up in what has become a very successful and very large global business with multiple interests from consumer finance to space travel. 

Virgin started as a small record label, with plenty of start-up attitude: attitude it’s kept alive for more than 40 years. Think about it?