The big end of town is turning to Australia’s startup fraternity in search of fresh ideas on how to reshape their business, and here’s what you can learn from this enterprising sector.
It’s not surprising. After all, startups are famous for breaking new ground, being nimble in their approach and thinking outside the box when it comes to marketing.
Westpac Group is just one recent example of a corporate implementing innovative startup thinking, having just opened its doors to The Hive – a world-class innovation hub aimed at helping the bank anticipate and respond to changing market and customer needs.
Matt Barrie, leading entrepreneur and chief executive of global online outsourcing marketplace Freelancer.com, believes big companies see startups as appealing business structures because – unlike big companies – they don’t tend to be tightly bound in red tape and bureaucracy.
“There’s much less inertia in a startup. Big companies often have trouble reacting to market or business changes because lots of people within the organisation potentially need to be reskilled or refocused,” says Barrie.
“Startups are notorious for being lean and focused, and this is an attitude that big companies want to adopt because it allows them to grow rapidly, respond quickly to challenges and opportunities, and also means the whole business really knows your target market and company strategy, maximising productivity.”
Barrie also believes there’s a far more innovative and exciting attitude cultivated within startups. This is often because there’s more visibility in the decisions of the CEO, founders or senior executives, so it’s far easier for the talent they hire to challenge the status quo without fear.
Adam Brimo, CEO and cofounder of online learning startup OpenLearning, also thinks startups are appealing for corporates because ‘extra’ funds don’t exist, making them lean and nimble. Founders also want to get up and running as quickly as possible, so they’re always pushing for ways to work more efficiently, he says.
“Often the issue for those working for big businesses is simply that their pay cheque is guaranteed, so they become comfortable with the current state of play rather than trying to push for change.
“The other factor is that there’s no hierarchy in a startup, and anyone can have a good idea and put it on the table, and they’re often encouraged to do so. Everyone works together to achieve your goals, because if you don’t, everyone knows your business won’t be around next month.”
Big businesses can think and act like a startup by setting up a side project, for example a separate company they let staff run without corporate bureaucracy. They should encourage staff to try new things and not let them be afraid to fail. Incentive payments could be offered to encourage staff to achieve, Brimo suggests.
Barrie agrees, adding that another aspect of startup thinking they could adopt includes finding ways to decentralise control, take more risks and create spinout companies with right of refusal to buy back.
Big companies should also release early, test and measure the effectiveness of the product, and make any changes quickly to optimise the product, so they’re constantly innovating, he says.
“In big companies, people are not incentivised to take risks, whereas this is expected and encouraged within startups because, let’s be honest, they don’t care as much about regulation or breaking the rules as opposed to achieving their goals, disrupting an industry or generating value for their customers,” says Barrie.
Written by: Nina Hendy
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