3 Ways to Foster a Startup Culture in a Big Enterprise

3 Ways to Foster a Startup Culture in a Big Enterprise

To survive the threat of disruption, enterprises need to shift to a responsive culture.

By Andrew Breen, Senior Vice President of Digital

In an uncertain world where change happens faster than ever, companies can see change as either a threat, something to manage or an opportunity to stand out from the competition. With cloud computing and mobile devices enabling pint-sized startups to disrupt trillion-dollar industries, failure to adapt to fast-shifting markets can lead to extinction. Just ask an executive at a taxi company or a travel agency.

To survive, enterprises need to shift to a responsive culture that values a hypothesis-driven approach with rapid experimentation over maintaining the status quo. Here are a few ways leaders can shake up company culture to encourage new ways of working.

1. Keep teams small and cross-functional

Org design is one of the biggest challenges preventing enterprises from building a nimble startup culture. At big companies, org charts are often a tangle of dependencies among various large, hierarchical teams. The results are ambiguity over responsibilities and decision-making as well as endless stakeholder reviews.

By contrast, the big tech companies that innovate at scale (e.g., Google, Amazon and Facebook) tend to have small, cross-functional teams of three to seven people who focus on a single problem. Some teams may optimize the critical processes that keep the company running. Meanwhile, others rapidly iterate to get new features into market and validate whether those features meet a real need – effectively functioning like tiny startups within the enterprise.

That said, teams shouldn’t function like isolated labs; they need to be working toward goals that further the core business so their successful new features, processes and ideas can be absorbed into the operation and scaled. 

 2. Put adaptability at the heart of your company culture

Startup culture is less about free snacks and more about adaptability, resourcefulness and openness to different ways of thinking. Leaders throughout the enterprise need to demonstrate that they prize imaginative ideas and creative problem-solving. Put these qualities in your core values. Prioritize them when you vet job candidates. Keep them in mind when you make decisions about resource allocation and org design.

Encourage employees to take ideas directly to senior leadership and to engage in new, innovative ways of problem-solving. This can be as simple as redesigning a business process to save time and thus money.

Different approaches will work better for different businesses at different points in their life cycle. But generally speaking, the ability to adapt and iterate on fresh ideas coming from anywhere – but especially from your customers – needs to be at the heart of cultural transformation.

3. Experiment fast and fearlessly

“Fail fast” is a popular maxim in the startup world; however, when you have shareholders to please, tolerating failure doesn’t sit well. A more apt phrase would be “experiment and learn fast” – a paradigm more akin to the scientific method.

You take an idea – ideally supported by customer data – and form a hypothesis: “If we do x, then we will achieve y.” You find the most efficient, minimalist way to realize that idea and get it in front of users to either refute or support your hypothesis.

Then your small, cross-functional teams either iterate from there or kill the idea. Even in the latter case, most employees find it freeing to have avoided pursuing a project that never had legs to start with. And it has the knock-on effect of not having employees’ performance reviews – and thus their careers – inevitably tied to sinking-ship projects. The new way to evaluate employees: What did they do to make us learn and learn quickly?

Although this approach requires only a subtle change in mindset, it’s still tough for many traditional business leaders to accept. It’s bottom-up rather than top-down and not as rigidly planned. But over-planning kills innovation. Taking an experimental approach allows stakeholders to see the goals and standards by which you will validate the idea; you’re not just throwing ideas at the wall to see what sticks.

A bright future for enterprises that move like startups

Transforming the culture at any large enterprise is a daunting task. Unlike at a startup, you have countless hoops to jump through and miles of red tape to negotiate. But enterprises have the advantages of brand, customers, funding and experience to help offset these challenges. The enterprises that value adaptability and rapid, experimental iteration are the ones that will not only survive but ultimately thrive in today’s digital landscape.