The UK is on track to finally return to its pre-crisis level, but the growth period we’re waking up to is so incredibly different to the last. Eight years ago businesses like Twitter, Instagram and Airbnb didn’t even exist and now they are household names. This new world is fast paced, nimble, innovative and bold, which means that the winners of the future need to act accordingly.
The challenge is that most large corporate institutions are not set up that way. They tend to be hierarchical, process-driven and risk adverse, in order to protect the wealth and grow at the reassuringly dependable rate required by their boards and shareholders. But can this behaviour keep pace in the new world? Perhaps to answer this question, we need only look at the incubators popping up within corporations, and the strategic alignments being made with start-ups, to understand the value placed on this entrepreneurial spirit.
Having spread my career across corporate organisations and start-ups, as well as being an intrapreneur within a corporate, I have a somewhat privileged 360 degree view on the best of each world and how each can benefit the other. To keep pace, to innovate, to attract the top talent, larger institutions should continue to capitalise on the supreme strategic expertise and financial backing, but at the same time embrace the need for change at a cultural level to drive a competitive advantage in the new world. With a foot in both proverbial camps – here are my four ways to get this process started:
Create a vision that everyone gets behind
The core around which everything orientates is the company vision – and the tangible targets (or KPIs) that go with that. It is a sad reality that the majority of employees cannot articulate their company vision – let alone the targets for the year. If they cannot do this, then how can they realistically make autonomous decisions every day confidently knowing that they are delivering towards the big picture? Contrast that with a start-up of 25 people, where the whole team interact with the founders every day -where they feel the pain and celebrate the successes day in, day out – and have the freedom and empowerment to improve the business knowing what they are aiming for.
It is difficult to re-enact the fear of survival with 2500 employees, but it is possible to cascade vision through the whole organisation so that it empowers everyone. This isn’t about an annual conference where employees are told what the vision is; we need to take a look at the likes of Innocent who managed to maintain the same clear vision with 25 employees, as they did with over 250 employees in three countries. They did this via the institution that is the Monday Morning Meeting – attended by every employee every week via phone or in person – where latest results are covered, new projects are shared and latest team achievements celebrated. As a result, everyone knows what they are working towards and their part in the bigger picture – maintaining the spirit and entrepreneurial drive.
Empower innovation in pursuit of the vision
Innovation is commonly recognised as a vital ingredient in the entrepreneurial power-houses, and the impact of a clear vision is instrumental in enabling an innovative culture. Innovation is not the job of the R&D department – to be a transformational business it needs to become a core part of everyone’s’ job – and this can happen if everyone is clear on what the business is trying to achieve. Google can encourage their employees to spend 20% of their time on new ideas because they know that their vision “to organize the world‘s information and make it universally accessible and useful” is embedded throughout every level of the organisation, and as such any creative ideas generated will be honed to deliver against this.
This kind of freedom – giving all employees from pot-washers to CEOs – the power to innovate – is scary. When the Four Seasons did it they had a risk-averse culture – given their well-to-do clientele rely on a flawless customer experience – but they recognised that the core of their business was their service, and that therefore it was the employees who dealt with guests every day that could further improve this service experience. So they used the vision to put a common language and rules to play by around those ideas.
True innovation is a cultural thing
Embedding such an innovative environment requires, more than anything, a cultural shift. A report from Cambridge University recently proved that innovation success is primarily dependent on corporate culture. After studying 800 firms across 17 cultures, company culture was the single greatest determinant of innovation success – not process, star hires, R&D spend, budget or national culture.
This mindset must begin at the top of the organization and permeate every level, infiltrating the tangible measures like employee responsibilities and targets, as well as the intangible such as expectations, coaching and an acceptance of failure – which is often forgotten. Without the freedom to dream up ideas without the fear of losing their job, innovation will not shift from the R&D department. This process can be started at a team level so simply – just by encouraging opinions and fresh ideas in team meetings, by running competitions or team days around new ideas, and by inviting new recruits to present the top three things they would change about the organisation after their first month. Such small changes mean new habits are built in the everyday moments when culture is created and maintained.
Reconnect with your customer
Perhaps the most obvious benefit to being small is pace and agility – usually enabled by flat structures and smaller, empowered teams. But this is not speed for speed’s sake – the changes that are implemented by small, more nimble organisations are reactions to opportunities or issues for their customers. The question therefore becomes – how can I reconnect with our customers and tune in to their needs to build real competitive advantage.
That real competitive advantage could mean launching new innovation in response to customer needs, or delivering market-leading customer service, given that 86 percent of consumers said they would be willing to pay more for better service in a recent Nielsen study. Either way – you need to listen to the ideas of those interacting with customers every day and really get the whole team in contact with the customer too. This could start by having everyone answering the customer service line as standard – as they do with the banana phone at Innocent; by having a day a month out on the shop floor; or getting out to at events meeting real customers face to face. It is this level of interaction that will pave the way to ideas for improvement, and deliver the confidence to implement them at the pace recognised in smaller entrepreneurial businesses.