Big businesses are finding it hard to keep up with start-ups, that have the ability to create new services and change the way they do things – at pace.
Large organisations face legacy issues that can go unnoticed, making it incredibly difficult to create this momentum. They start life innocently enough, but over decades of success these issues, or the three banes of big business, can outgrow their usefulness and start to clog up the organisation and prevent the right things from getting done.
Big businesses have too many people - particularly those with too much money. This creates an environment in which employees lack focus, with complex webs of “important” initiatives and an un-navigable, dysfunctional matrix that eats up time and effort. Most cripplingly, this abundance eliminates the need to be inventive.
A common misconception is that as a business grows, more governance, more processes and protocols are needed. This leads to an organisation that’s full of disempowered people, with no room to experiment, making reinvention almost impossible. Over-governance is a symptom of a business failing to create a clear strategy. Governance is no substitute for highly motivated people who are clear about how they can make a difference.
Too many shareholders are fixated with short-term results, leading to senior execs obsessing over hitting the “right” profit number every three months – at the expense of building a strong business for years to come. This lack of foresight can trickle down, leaving the whole organisation making decisions based on decimal places rather than in the best interest of the customer. While most leaders can manage for either the short-term or the long-term, a great business leader manages effectively for both.
But all is not lost – large organisations have three critical advantages over start-ups.
While “new” is undeniably attractive to millennials, there is one thing that trumps that: authenticity. Big businesses must dig through their archives and rediscover why they were founded and what they were built to do, reapplying this legacy to modern needs and issues. For example, Aviva originated as the world’s first fire brigade, and now helps free people from fear of a whole host of life’s uncertainties and risks. American Express was founded to deliver mail by horse, and now enables a lot more than just mail to travel across the globe.
The kind of financial muscle that big businesses enjoy is rare, and they can learn to use this effectively, by focusing on a far narrower range of opportunities. If they can get passionate with applying that financial clout to just a few wicked problems, then they will create the next one hundred years of legacy.
While sheer size is an enormous hindrance to big businesses, it’s more attractive to cutting edge talent than you would assume. That talent thirsts after a deeper sense of purpose in their work. What bigger purpose is there than being able to access millions of customers and make a difference to every one of those lives? If companies can get clear on a big purpose, and give staff the space to do their best work in pursuit of that purpose - they will find that the best talent will flock to them.
If big businesses learn to overcome their three banes and take advantage of their three boons - they will run rings around smaller players.
Atif Sheikh is the chief executive of Business 3.0, the momentum consultancy. He advises big businesses on how to move in new and different directions. businessthreezero.com