However, as and when startups grow (the rare <10% of them) and become successful, the founders bring in more people, structures, processes, flows, SOP’s and systems. Also from a people angle, the fast and hectic pace of early startup stage starts to ease out and avoids burn outs on a large scale. In short, they become like the successful bigger companies they were competing against.

So, for large successful companies, becoming a startup is as I said earlier, going backwards. So, how do we bring changes to the ways of the new corporate culture? What should large successful companies do to maintain their edge and continue to be finding their names in the Fortune lists? How can large companies gain from the lean startup principles while maintaining the stability of processes and systems and checks and balances, the trademark of traditional sustainable organizations. How can they get the agility they so crave and how can they get away from the « high command » control culture? Can large companies have their « cool » cake and eat it too?

YES, they can – and funnily enough, you don’t have to venture too far from the startup world to find your answers. I believe it’s about building the new future ready organization from the principles of a startup accelerator. Now play the same association game with the words –Startup accelerator. What do you see? You would see a loosely structured organization that focuses on ensuring that they provide a whole bunch of « pre-qualified » startups and providing them with the best possible ecosystem, environment and opportunities to succeed and they tie their own success to ensuring as many of the startups scale and become a success. Important clarification of definition here, when I say startup accelerators in this context, I mean the group including incubators, co-working spaces, seed funding VC’s etc. I know they are all slightly different (explained in research here and here) but for this article I’m clubbing them all together as accelerators. Also I include both independent accelerators like YCombinatorand corporate accelerators like the one at Microsoft.

The below 5 principles inspired from startup accelerators can be used as the building blocks of the new agile corporate culture and setup in large organizations. Let see what are these principles and how they can be used.

1. From large business units to cohorts of autonomous « startups »

• Senior management in large organizations are realizing that as the business units have gotten larger, they have moved further away from the customers’ problems. Also the globally centralized all co-ordinated approach of large organizations is at a passé. There are layers upon layers of co-ordinated plans from the very top to the front line of the organization. The world is getting more and more complex and trying to predict and control our way out of this is not really working. Startup accelerators instead focus on selecting « promising » startups which are then learning, challenging,collaborating and even competing with one another while sharing the same space, support staff, systems and networks and the common ecosystem. Its up to the startups to maximize their use of these resources and come out successful. Converting a large business unit set up into smaller empowered startup units sharing the same ecosystem of people and systems would enable this freedom and agility of more customer-centric decision making. Critical decisions and building solutions are then taken with the deeper insight of the pains and gains of the customer. Speed comes as a natural consequence of this empowerment and the accuracy of decisions is improved by basing it on insights closer to the customer.

2. Mentors & investors instead of controlling managers

• Even though startup accelerators tie their own success to the startups they work with, they do not micro manage them. The focus is on mentoring the teams and giving them the right guidance and challenge them with scenarios and test the teams’ response to these different scenarios. The ones that seem to have convinced them after quite a lot of tough questions and challenges and seem to have the right attitude, strong team cohesion and closeness to customer usually get the nod to move to the next phase of growth. This principle of mentoring is seen by many startup founders to have a huge impact in the growth curves of the in and after the programs at the accelerator. Investors, who come to the accelerator are looking for the next big value opportunity. They come at this with very clear expectations of ROI’s and growth metrics that make them want to loosen their purse strings and the startups have to demonstrate this value very clearly for further investment rounds.One thing that both mentors and investors do – test the ability of the teams to perform under pressure and how they tackle scenarios they are not prepared for. So, senior management in the new agile organizations should also see themselves as mentors and investors in the teams and see how they can support and challenge the teams and invest in them in a staged manner with documented results. As they solves one set of questions and achieve validated learning then more and more investment flows towards those teams. This way you also get your teams to embrace more calculated risk and work with trial and error in a healthy environment under the guidance of experienced mentors.

« Everyone has a plan-until they get punched in the mouth » – Mike Tyson

3. Super charged networks and open innovation ecosystem

• If you ask any person in the startup community what the single biggest contribution from startup accelerators/incubators is, most likely their answer would be the network. Building and sustaining an effective network of potential partners is a full time task in itself. If there is only one thing I would urge companies to take away from here – it would be enabling their organization for interconnections to all sorts of networks and an open innovation culture. The next great organizations cannot depend purely on their own knowledge and competencies. Networking across universities, entrepreneur groups, government groups, suppliers and customers and yes, in some cases even direct competition, has to be the norm. Speed comes with working collaboratively with the best of the best. One can never become complacent in the world where the next billion dollar company is being built in a basement or garage somewhere. The successful tech companies of Silicon Valley already today work with many collaborators and partners and spend a lot of their energy on the network they keep and manage and embrace this open innovation culture and ecosystem. Make no mistake – this is not just a Silicon Valley thing, P&G Connect + Develop in traditional consumer goods, Lilly in pharma and Local Motors in automotive are great examples of successful open innovation networks across industries. Bringing internal development teams closer to the external knowledge network and building together with them gives the disruptive speed to market and the customer delight. How are you preparing your organizations for a super charged network based on open innovation product development?

4. Customer Centricity – Focus on the most compelling customer problems

• Any decent accelerator would continuously push to focus on a compelling customer problem and make razor sharp, the focus of the startup they are mentoring, on providing the best solution for that problem. Many startups would otherwise stretch themselves too thin trying to solve too many problems for the customers at the same time and trying to come up with many solutions/features. This is true in large established organizations too. Maybe even more so as success breeds complacency to some extent and the attention or focus on the core problems starts to erode. Making products and/or services which do not match the core need for the customer is just a waste of time. If you haven’t prioritized the problems the customers are facing in your domain and go after them with the evaluation of the degree of impact you will not get the growth you expect. This is something that the autonomous startup teams in large organization can and should ensure. Trying to be everything for everyone in one team is a death knell to execution quality and speed. Taking this as an organization principle will also shift of the goal of the new future proof large enterprises from the concept of maximizing shareholder value to the concept of maximizing customer delight. Amazon is a company built on this goal.

5. Engaged employees as backbone of this change

• Inspired & engaged employees are the backbone of any successful company. Maybe someday AI will take over and all of us can be sunbathing on a beach or attempting to sculpt a new masterpiece but until then engaged employees will remain the one difference between a good company and a great one. Studies from Gallup have shown that less 15% of world’s employees are engaged. How can the future organizations change this? Carrying on from the earlier point, maximizing shareholder value goal does not increase engagement level of employees. However, they can be engaged with focus on customer delight. They can connect with working collaboratively. They can connect with learning new skills and attempting things they never have tried before and succeeding. Combining the four earlier principles of autonomous teams focused on customer problems working in open innovation networks and being mentored by senior executives and adding the elements of high degree of transparency and communication builds the engagement and trust you need in your employees to be fully charged for the future challenges.

Hopefully these principles inspire you to think about the way your enterprise is organized and prepared for the future.With accelerators being now a well tested idea – From Google to Telefonica, Walmart to Cisco, Target to Samsung , these lessons/principles are getting more self evident. For many of you, accelerators would a new toolbox in the 24/7/365 race to remain nimble, agile and relevant to customers – For many of you it might not be. Either way, accelerators are a stepping stone in this journey and its the principles that I mention above that I feel will endure longer than the accelerators themselves. Therefore I propose to integrate them in an organization’s core. Please share your thoughts in your comments below.

Source : https://www.linkedin.com/pulse/how-build-agile-organization-vivek-menon?trk=v-feed&lipi=urn%3Ali%3Apage%3Ad_flagship3_profile_view_base_recent_activity_details_all%3BtDkHUhvzlcXOWnUhr%2FtJUQ%3D%3D