Putting 'big company' employees in similar environments to start-ups generates innovation in the right place: the front lines.
At great start-up companies, an entrepreneurial spirit is present in everyone. Individual contributors are empowered people who use their judgment and expertise to execute well, solve problems on the fly and then continuously improve their delivery. Communication throughout the organization is fast and comprehensive and change happens quickly.
As those companies grow, the entrepreneurial spirit becomes diluted. That original great execution waivers because employees operate with less and less empowerment until they are unable to resolve any problems on their own. Continuous improvement and innovation? There is now a special department for that. The dichotomy is clear: the individual contributors execute as they are told, and executives decide how to innovate and then charter the centralized Operational Excellence team or consultants to get it done.
This shift in where innovation is born is problematic for most organizations. Big companies struggle or fail after long, great runs, and it is happening more frequently than ever. It is not for a lack of attempting to innovate, however; it’s just that the attempts are less meaningful and effective than they used to be.
How can a mid-market or big company be as good at quickly innovating as a great start-up? Put more empowerment back in the hands of individual contributors. To understand why this works and how to achieve it, it’s important to understand what start-up employees are:
- Passionate: These employees find a lot of meaning in what they do. They are close to the customers and the suppliers and know all the processes, so they understand why their role is important. This creates a passion for their work because when they do well they make their company and customer better.
- Risk-taking: They either started the company or were brought in by the founders from a bigger company that was “safer”. They have no problem pulling the trigger on innovative change opportunities even though all change carries risk.
- Connected: The employees who are executing as individual contributors are also close to the vision and strategy of the company. They get the small picture and the big picture.
- Owners: Founders and first employees have direct financial interest in the performance of the company.
If individual contributors at big companies are empowered to identify and own innovation opportunities, they will be successful if they are passionate, willing to take risks, connected and have an ownership stake in the company. Managers need not wait for an enterprise initiative to move in this direction – it probably isn’t coming anytime soon. Instead, figure out how to make your ‘big company’ employees more like start-up employees. Here are a few ideas to get started:
| Passion | Develop them so they understand their entire value chain, meeting their suppliers & customers and mapping their processes |
| Risk-Taking | Instead of making performance about ‘doing what they’re told’, add elements of change initiation and execution to their performance expectations |
| Connectedness | Make more of your decision-making process, executive communications and job responsibilities transparent to your employees |
| Ownership | Tie more of their compensation to team or company-wide performance, not just to their own |
great post. It’s interesting to see what is happening right now with seed money and investors in start-ups. There is currently more capital offered than capital needed. That could lead to an over-valuation of some of thse these new companies. Just today, Facebook bought Instagram for 1 billion. Has the pendulum swung? Here’s the link:
http://42floors.com/blog/posts/did-everybody-see-what-just-happened-the-pendulum-has-swung