The top business headlines of 2017 sent a clear message to executives around the world: innovate better, faster and more efficiently or get left behind. Many retailers watched as the Amazon and Walmart storm closed in, blockchain trickled into unexpected industries, and driverless cars sent shockwaves through the traditional automotive space, just to name a few examples.
This level of disruption demonstrates the nature of our hyper-competitive business environment today. It also begs the question, how can large, legacy organizations better compete when speed and precision are the chief currency in today’s innovation economy? In my experience, it starts with adopting a lean startup mentality.
Let me clarify, this doesn’t mean asking your CEO to start wearing denim, moving to an open-office floor plan and implementing a millennial-friendly, no-email business model (no matter what the clichés are!). A startup mentality begins and ends with your workplace culture and the talent you have supporting it. In my work advising founders to local Chicago startups including a few at Chicago incubator 1871, I’ve learned first-hand that startups often lack the brand and financial luxuries of larger companies and, thus, lose the sense of fear of making mistakes that riddle larger enterprises and prevent them from unlocking new opportunities to disrupt.
Luckily for large organizations, having tremendous scale, resources, intellectual capital and infrastructure and championing a startup mentality characterized by adaptability, creativity and resourcefulness don’t have to be mutually exclusive. At SAP, we’ve learned to balance both. Back when the company was founded, five entrepreneurs with a shoe string budget started SAP with one customer, and set out on a path to transform the way businesses used technology to run their mission-critical processes more efficiently. Today, 45 years and approximately 360,000 customers strong, SAP is fueled by the same pioneering spirit that inspired our founders to continually transform the technology industry.
If you’re a business leader or mentor in a large organization, you can take a few meaningful steps to recalibrate your company’s culture. For starters, encourage your team members and organizational leadership to embrace mistakes; they are worth more than seminars or formalized training and serve as a key foundation for the type of practice-based learning that drives the innovation that changes industries and creates new ones.
Another core principal behind all successful startups is their resourcefulness and speed of decision making. Creating innovative products and solutions isn’t about the collection of resources you have at your disposal but in how you rethink allocation and tap into latent assets. Airbnb and Uber became global juggernauts without Ford-style mass production. It’s this type of disruptive thinking that should be encouraged from top to bottom; foster a culture where no process or way of thinking about problems goes unchallenged. This is what Amazon’s “Day One” mentality is all about.
In this same vein, encourage yourself and others in your organization to embrace purpose-driven collaboration with other businesses in your communities. It pays off; in a recent study of the SME community, we found 81 percent of SME respondents felt that deeper connections with other companies built on collaboration, honesty and open communication helped them facilitate greater knowledge building and innovation harvesting. Offer your solutions and unique business challenges – especially to members of the startup community – as engines for change and maintain an open mind when it comes to co-innovation. SAP is also tapping into the academic community in various metropolitan areas like the recently launched SAP Next Gen virtual lab at the University of Illinois at Chicago to bring together startups, VCs, students, faculty and local customers and partners to solve thorny business problems and to identify the next disruptive concept.
SAP customer Bosch is turning to the startup ecosystem to engage and identify collaboration opportunities through partnerships with organizations like startup incubator 1871. The partnership with 1871 led Bosch to take innovation a step further by launching their own IoT innovation space, the Chicago Connectory, where a community of startups, university faculty, corporations and organizations come together to drive IoT innovation. As a result, Bosch has further expanded their outside-in innovation approach.
Startups are constantly challenging the status quo, taking risks, creating new, cross-industry business models and coming to the table with disruptive thinking that challenges long-standing, traditional businesses. Not only is it becoming imperative for legacy companies to take a page out of the book of these new disruptors. Being more agile, more open to different thinking will open the door to new opportunities to collaborate, to merge conventional wisdom with disruptive thinking and to create business models of the future.