Big name companies, will they be around in 20 years?

In the age of the startup business, many big and well-known brands are starting to feel threatened. In talking to many ‘C’ level directors the reasons for that feeling is consistent. They can’t react to changes in their market quickly enough, their cost of doing business is too high and their business lines are inflexible. Having a great brand is no longer good enough!

Compare this situation with a typical startup company and they couldn’t be more different, to the point where the inverse is true. Many are true agile businesses and as a result they are taking market share from the big brands and making money. The operational and change costs are a fraction of the big brands and they have an innovative culture. It’s not difficult to see why the there’s a question mark over the viability of some of those big brands and their demise is probably only a matter of time.

So, is it all doom and gloom for the big brands? Of course not, we should never underestimate the survival instinct of their leadership team and also the pressure for change that can be exerted by shareholders. But how do they go about changing and fighting back against the startups? Simple, fight fire with fire.

The key to the fight back is all about people and culture. Culture is something that is notoriously difficult to change, but it doesn’t stop you starting it afresh. There’s no reason why the big brands shouldn’t create their own startups. But it takes significant courage and forward thinking to do this successfully. To help I’ve created a set of 5 simple rules.

  1. Don’t try and do this internally, bring in new talent that already exhibits the kind of cultural traits you’re looking for.
  2. Ring-fence your startup from the rest of your organisation and unburden it from unnecessary corporate governance, give it room to breathe.
  3. Ensure it has robust executive sponsorship so that it can do things ‘it’s way’ without undue interference.
  4. Select a new business line for the start-up to operate in or pick a problem area in an existing business line and create a direct competitor.
  5. Don’t let the startup grow too big, if it gets to c200 people split it and create another startup.

In time, the ‘children will consume the parent’ and the cycle will renew. But in essence the strategy is to make change and renewal the norm. When your culture starts to exhibit signs of stagnation, don’t try and change it, by the time you make headway another startup has already taken the best bits of your business!

So, what makes a startup culture? That’s a subject for another time. If you’re curious, get in touch.


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