Although the contrast between established corporates and small startups is significant, opposites do attract. So much so that according to Unilever, 80% of corporations consider startups to be invaluable sources of innovation that fuels growth and provides pioneering business solutions.
Improving efficiency is one of the top reasons corporate giants choose to partner with agile startups. Because the ability to solve problems in a scalable way is one of the keys to innovation, collaboration is a great way to find new perspectives to both existing and potential problems.
“We’ll keep working with startups because they keep us looking at the really big problems, the ones that make a company think in transformational terms.” – Kiva Allgood, GE
However, building transformational technology isn’t the only attribute startups can teach the big players. In addition to the above, there are some important lessons that some of the more traditional companies can learn from startup culture and their ways of working.
Some of the most common obstacles standing in the way of growth and innovation are related to company culture. Innovation in large companies requires constant change and can be hard to implement if the underlying culture isn’t conducive to creativity and new ideas.
Although big businesses are constrained in different ways, one of the most common cultural issues is when innovation doesn’t originate from within the company and isn’t a part of everyday activities. On the contrary, it is also an issue when people are reluctant to ideas that come from outside the company.
This phenomenon is known as the ‘Not Invented Here‘ effect and originates from the urge to protect the existing business from external ideas. When a company rejects new ideas (whether they’re coming from inside or outside the company), knowledge is underutilized, and negative consequences are likely to occur.
Startups often approach company culture from a different angle. They create a culture that lasts as the company grows, hire people who share the same values, and don’t limit themselves with a rigid structure.
The secret to innovative and creative culture lies in collaboration-based work methods that emphasize proactivity, ownership, and continuous learning. In startups, a continuous learning culture is strong, because startups offer a true, dynamic learning experience to the employees.
In corporations, however, the learning curve is often steep, as you’re offered what you need to grow in the beginning, but continuous learning isn’t necessarily incorporated in your everyday work.
Having said that, one of the great real-life examples of a successfully built corporate culture that supports learning is PwC. It has introduced a program of lifelong learning that emphasizes continuous improvement and helps people to increase productivity and economic growth.
PwC offers different types of training to their employees, such as traditional learning, e-learning, and mobile learning. In addition to this, PwC also has an innovative learning tool, where employees can search for a topic and choose their type of training, such as using an app, watching a video, reading an article, etc.
Although this point is closely related to culture and learning, having an innovative company culture doesn’t automatically mean that employees in a company possess a growth mindset. A growth mindset is a mental model that drives motivation and achievement. It relies on intrinsic motivation and the underlying beliefs people have about their ability to get better at what they do by working harder and smarter.
When it comes to innovation, having a growth mindset is a creativity booster and an important value for a startup to cherish. Startups are focused on scaling up the business fast and are strongly relying on the capabilities of the team. Growth mentality plays a big role when it comes to discovering sustainable ways to work and grow.
Especially in the beginning, startups need to put a lot of effort into organic growth. One employee may have multiple roles at once. Therefore, people working in startups benefit from developing multi-dimensional skill sets, which requires self-reliance and hard work.
Developing this type of mentality can be picked up from the startup culture. This doesn’t mean that people in big companies aren’t working hard or that they do not have multiple areas to improve and focus. Corporations are often more focused on the steady increase in profitability and market share than rapid growth, cultivating a growth mindset isn’t necessarily seen as a priority.
In general, corporations aim to take good care of their employees and focus on improving employee retention. However, the best long-term results aren’t necessarily achieved through promotions or a raise but by creating an environment where personal development and growth is valued and encouraged.
When employees feel that their hard work is appreciated, and they see that the effort they’ve put into personal growth is actually moving them forward, they feel motivated to continue working at their peak.
Sometimes a change in mindset from “this is how things have always been done” to “let’s get more things done” is what it takes to create a motivating work environment.
Teams operating in high uncertainty with fewer resources often focus on rapid experimentation. Because the stakes are high, the risk of not experimenting is greater than the risk of failing. As startups look for new ways to grow, they must search for new opportunities that bring more value to their customers and will benefit the entire company.
Experimentation isn’t always about big, disruptive ideas but more about making improvements and testing assumptions fast. Because startups face more uncertainty, they need be able to learn and react in a timely manner.
Without experiments, it’s impossible to explore the possibilities ahead of you and to expand your understanding of what works and what doesn’t. In addition to the ability to learn and react to changes, the purpose of experimentation is to reduce perceived risk and uncertainty.
In corporations, there are obstacles that stand in the way of experimentation. Your team dynamic could be dysfunctional, the legal department may present a barrier, or the team mindset could be keeping colleagues in their comfort zone preventing progress. To be able to overcome these obstacles, one should identify the possible blockers beforehand and find ways to tackle them.
One way is to set clear guidelines and involve more people in the experimentation process to help them understand why tasks are done that way.
“Our success at Amazon is a function of how many experiments we do per year, per month, per week, per day…” – Jeff Bezos
It should be mentioned that most of the experimentations are going to fail, especially in the beginning. Although failure is never ideal, it’s a part of the game. Once again, learning from that failure is all that counts. The more you experiment with trial and error, the better the quality of your results in the long run.
Startups are on a constant lookout for new solutions that can help them to become better and faster. Startup employees are constantly collaborating and sharing their knowledge with their team members by leveraging the latest technology.
However, in the more traditional, hierarchical companies with departmental barriers, the situation is often different. When people are experts in their own area, it is possible that they become possessive of their specialist knowledge and do not want to share their ideas with the rest of the organization.
This type of silo mentality can be harmful especially in the long haul, as it will reduce efficiency, morale, and productivity. When the conversations are happening behind closed doors, others don’t have a chance to learn and extra time will be spent on explaining the same point over and over.
Because technology evolves and grows exponentially, so should employees’ level of skill, knowledge, and productivity.
Often, the employees are the ones that come up with the best ideas because they see things from different perspectives. Sharing new ideas and collaborating without departmental barriers is highly recommended as people love to be heard and know that they are making a difference.
One way to organize this is to keep an “idea backlog” where each of the employees has a place where they can voice their opinion. There are plenty of great idea management tools to choose from that can help you to capture that tacit knowledge in your organization and to develop some of the best ideas together.
Despite the new tools and techniques, you still need the best talent on board to make things happen. However, finding the right kind of talent is hard and something both corporations and startups struggle with.
Therefore, collaboration with wider networks and communities to access talent that doesn’t exist in-house is necessary, and for startups, building strong relationships is often the only way to succeed.
Getting involved with different types of communities can bring in other great business opportunities and results. Instead of only being active in the communities that are closest you, broadening the scope may open new, valuable doors and unlock some of the problems a company couldn’t solve alone.
A classic example of collaboration between corporations and startups are corporate innovation hackathons. In these hackathons, corporations are able to evangelize developers and startups, discover new business solutions, recruit top talent and raise brand awareness.
Because large companies and startups work for different purposes and goals, they can only be compared to some extent. Despite the differences, many large companies decide to collaborate with startups to come up with more innovative business solutions.
However, the most important lessons enterprises can learn from startups are related to company culture and ways of working. Because of limited resources, startups are investing in organic growth by cultivating a growth mindset and focusing on making rapid experiments to see what works and what doesn’t. Because creating new isn’t necessarily the main focus for corporations, the supportive ways of working aren’t always as critically examined as they are in startups.
Corporations often focus on profitability and risk aversion, which can be learned from startups, especially when developing new products and services. Startups also have a lesson or two to teach about the potential risks of experimenting vs. the risks of not experimenting at all.
Nonetheless, all companies are likely to benefit from self-sufficient, growth-minded employees and an unrestricted flow of information, which is why collaboration between startups and corporations is definitely something worth cheering.
Julia is a content marketer at Viima, the best way to collect and develop ideas. Viima’s innovation management software is loved by thousands of organizations all the way to the Global Fortune 500. She’s passionate about leadership, culture, and innovation and frequently writes about these topics, usually in Viima’s blog.