There’s a tendency to look to the big guys to get inspiration for how to run a business – after all, you only get to the top by being the best, right? But seismic change is the new normal. In a digital, tech-driven, globalised world, perhaps we should be looking elsewhere for inspiration, writes Simon Larcey.
As a company grows and grows, there is no longer a need to check every penny, which makes sense – when you’re running a company worth three-quarters of a trillion dollars, like Tim Cook does, a million dollars isn’t small fries, it’s a grain of salt on the said fries.
And as the head of any major corporation will tell you, the larger you get, the pitfalls of bureaucracy, red tape and reluctance to change become more real.
But the world is changing more rapidly than ever before, and as consultancy firms like McKinsey continually stress, corporations big and small need to adopt a start-up mentality.
Start-ups tend to be lean, nimble, agile and ready to change. More importantly, perhaps they don’t have the luxury to make silly mistakes (although that’s not to say they don’t take risks) – and they need to justify every move they make.
Lean, mean and measurable
Running a start-up virtually forces you to be a lean and agile operation. You’re likely chasing your long-held dream, funded by a combination of your own life savings, and the investment of people who have given you a vote of confidence when so many others didn’t.
As a result, you become consumed with where every dollar is going – there are no small fries! And generally, you are more willing to change and adapt with the market when necessary.
This isn’t to say that start-ups aren’t willing to take risks, just that they are much more accountable for the risks they do take. Without the luxury of big budgets, ROI must be readily observable.
This is why insight and attribution are so important to start-ups. They help businesses to define success and optimise opportunities.
Working in the ad tech space, I learn a lot about business performance and ROI. To this day, it still gives me adrenaline when I see success. The big question is always: Have we made an impact and achieved our client’s objectives?
I see many businesses using new tools to make running a business and analysing performance easier. These tools have been well-adopted by the SMB market (myself included). But in my experience, many big corporates - and this is of course a generalisation - remain slow, reluctant to change and risk-averse. They still see the old way as the right way.
New digital tools are designed to improve business performance and to be so simple that even a child could use them.
They give a business operator a clear idea about what is going on and how things could be improved. So why the slow uptake from many of the larger corporates? Surely the concept of a well-run business is scaleable?
Old-fashioned thinking just won’t cut it anymore
Perhaps it’s a case of major corporate firms being stuck in the old-world way of thinking – they don’t want to be more efficient because then they get less budget next year; they don’t want to exceed targets by too much because then that becomes the new target.
Or maybe it’s simply a case of fearing innovation. While start-ups often live in a constant state of flux and innovation, larger corporations tend to be more sluggish.
But innovation is crucial to every business. What’s more, it’s a model that even venture capitalists push for in big companies.
As Rosemary Ripley, managing director of NGEN, wrote for The Guardian, “Without an internal commitment to innovation, even the strongest brands in the slowest-moving industries will eventually wither and die.
“Among the companies we finance, we look for management teams that embrace a lean, non-hierarchical style, that are quick to jump on emerging trends ... and that permit an environment of controlled risk-taking and failure.”
The final, crucial insight Ms Ripley offered was: “Valuable insights may be sourced outside the company ... both for smaller companies and larger ones.”
You don’t need to be a brilliant innovator: come up with your own completely original ways of innovating – see what has worked for other companies and incorporate them into the way you do business. Look at what the new kids on the block - the start-ups and the innovators - are doing.
The key is to keep innovating. Try things, but don’t do it blindly. There are cheap, easy-to-use tools that can measure whether and how your new way of doing things is working or not.
We know this because it’s exactly what the most successful up-and-coming businesses are doing. The ones that are both lean enough to adapt and smart enough to measure what they are doing actually work.
Let’s not forget that the big players have forged the way. But it doesn’t mean they can’t learn a thing or two from the new kids on the block.
Simon Larcey is the managing director of advertising amplification platform Path 51.