A CEO of a new startup in Silicon Valley confided in me over beers that he said it’s easy for startups to disrupt big companies as they’re so busy internally fighting themselves. He’s right, I mostly see companies in internal battles and struggles over resources and power, leaving them exposed to outside startups. Coincidently, may of the startups I see disrupting large companies are composed of ex-employees who recombine as they know the weaknesses to exploit these larger companies, damning! To stay Future Proof, I’m seeing at least ten trends larger corporations are applying in the last year to stay lean and agile.
Ten Ways Big Companies are Staying Agile:
While there are limitless methods on how companies can innovate and stay agile, I wanted to share from my perspective what I’m seeing as I visit large corporations and spend time with startups. I included some color on what I see working –and what’s not working– and I encourage your comments below to share your perspective, so we can collectively grow.
- Hire and Acquire: The most obvious way companies are injecting innovation and agile culture is hiring innovators. I’ve friends that are recruiters in a variety of large companies, and they’re often going for top performing college grads, but I hear of them now sourcing highly educated talent in China and India with interesting results. Over the last year in the market I closely watch, companies like Adobe, Oracle, Salesforce, and Google have acquired startups: Context Optional, Vitrue/Involver, Buddy, and Wildfire, respectively.
- Shifting Market Categories, Applying Agile Development Principals. Over the last decade the Agile Development method hit the tech scene by storm, forcing big box software players to be overrun by rapidly iterated products launched on a daily basis. We’re seeing companies evolve outside of their core offering and beverage companies like Coke, Amex, RedBull are now becoming media and lifestyle companies, and they continue to quickly release content, new products, and services at a rapid pace.
- Removing Excessive Middle Management. Successful companies often become bloated. In an effort to allow the executive team the ability to stay strategic, they grant a middle layer of management to emerge to look after the working teams. Over time, internal kingdoms emerge and battles over turf occur, segmenting the company, and causing duplication of resources. Many large companies are under going restructuring, including this large software company in Silicon Valley.
- Sourcing Ideas from Employees Outside of R&D Dept. Innovative companies are providing programs that inspire employees –even those not in R&D– to submit ideas and allow them to be funded. Using internal web-based submission tools, some companies enable other employees to vote on top ideas, resulting in a governing team to fund the internal initiatives, such as at Dreamworks, and discussions on modern management websites.
- Conducting tours in Silicon Valley and Innovation Centers: On a periodic basis, I hear of executive teams from East Coast, Europe, Mid West taking tours in Silicon Valley, stopping by the usual suspects like Facebook, Google, Twitter, Stanford to understand innovation cultures. These tours are great at injecting fresh perspective into traditional mindsets, but can often leave executives feeling like they’ve seen a movie of children’s play. The upcoming movie on the Google “Internship” will caricature old business vs new.
- Enabling Employees to Conduct Passion Projects: Large companies like Google (50k employees) have structured time for engineering team to have dedicated time to conduct experiments in areas of interest. They grant these teams dedicated time to innovate; 20% of their time for innovating Google experiences, and 10% on “Passion” time to focus on anything related to their personal lives. In my campus visits, I’ve slowly seen gardens emerge, which are now becoming digitally monitored and solar enabled.
- Fostering Outside-In Innovation. One method we’ve seen over the last few years is companies offering up collaborative areas for customers, partners, faculty at universities and beyond to get involved in innovation. In particular, P&G has hosted an innovation lab, and has launched several initiatives to allow for innovation of their products to emerge, and their agnostic to where the ideas surface from. Many companies have launched innovation platforms, such as Intuit, Dell, Starbucks, enabled by tools like Salesforce Ideas, Get Satisfaction, Pligg, and UserVoice
- Enabling a Fail-Forward Culture. On a recent visit to Facebook, who now boasts over 4k employees, there are propaganda style posters all around campus that encourage employees to fail fast, and fail forward (pics of the newly minted campus). The encourage projects and experiments to quickly iterate, and launch several times a week in an agile manner. I’ve seen larger companies on my internal visits have executives who tout their culture is ready to experiment and be on the brink of digital disruption.
- Sanctioning Innovation “Tiger” Teams. At the largest companies I’ve been inside of, I’ve seen small “Tiger” teams assembled that are granted permission to build new products and services outside the walls of the regular company. While I don’t think this addresses the root problem of a large corporation becoming stagnant, these CIO and CEO teams are given full reign to create something new, in hopes of developing a new product. As long as there’s a process for these smaller teams to assimilate their findings and products back to corporate, this process can work.
- Investing in Physical Innovation Labs. The absolute common trend I’m seeing is non-tech companies developing innovation labs. These dedicated areas are inspired to allow employees, executives, and customers collaborate on building next generation services. Several non-tech companies have setup innovation labs in Silicon Valley, including AMEX, Walmart, although most companies have them scattered among the world. I’m managing a running list of Tech and Media Innovation Labs, in which you can review or add to. These dedicated labs show promise, as long as they’re integrated with the rest of company, and demonstrate business results.
Those are the common trends I’m seeing at large corporations, stemming from internal management changes, to developing new relationships with outside market. I’d love to hear from you in the comments how you’re seeing companies maintain agility. Update, there’s an interesting discussion thriving on my FB post.
Photo Credits: Yoga Sunset, Photo by GrahamKing, used with Creative Commons Licence