David against Goliath: The conditions for start-ups and companies couldn't be more different. But as the business world is moving faster and faster and the demand for agile management methods is increasing, start-ups can actually become role models for large organizations.
Anyone who has ever worked in a large corporation knows the working conditions: long decision-making processes, rigid hierarchies and ineffective communication inevitably creep into companies with 1000 or more employees over time. To remain relevant in today's fast-paced world, large organizations must question their established business processes, way of thinking and behavior. A look at the smaller competitors on the market could be worth it. It’s not without reason that start-ups perceived as drivers for transformation and innovation in the economy. New technologies and digitization offer many new opportunities for lucrative and even unusual business ideas, but also require a certain speed and flexibility that large companies can no longer keep up with. In this article, we’ve compiled the five most important things traditional companies can learn from start-ups.
Start-ups have very limited resources, especially in the early stages. They are therefore dependent on a close customer relationship in order to be able to tailor solutions directly to the needs of the target group. For this reason, young companies know exactly where they stand and why they exist. The focus is always on the benefits for the target group, which is why the customer is actively involved in product development at an early stage. In large companies, however, only a small number of employees work in direct contact with the customer, which means that the focus can get lost over time.
The holistic orientation towards customer benefit is supported by the use of agile methods. In flat hierarchies, independent teams work on small projects for which they are responsible themselves. This leads to a change in the role of leadership. Instead of leading and controlling, much more emphasis is put on supporting and encouraging the employees. Start-ups are moving away from silo thinking, detailed planning and fixed hierarchies towards modern management approaches. One example for this is the OKR method, which helps teams prioritize their tasks by always questioning whether measures are aligned with the company's goals. Without rigid hierarchies, the company can act faster and adapt to unexpected changes more quickly.
Traditional companies tend to rely on security and predictability in their processes, while start-ups are mainly characterized by their speed. Here again, the keyword is agile methods. The lack of hierarchies and encouraged personal initiative enable start-ups to avoid long decision making processes, which allows for a quicker implementation of creative ideas. Start-ups are also characterized by the fact that they release their products and services on the market faster and work with the immediate feedback of the customers. The basic prerequisite for this is a positive culture of failure and the realization that you can only reach your full potential and create a learning effect by trial and error.
Start-ups achieve a high degree of flexibility through the willingness to admit mistakes and the opportunity to learn from them. Young companies have the great advantage of being flexible and able to adapt quickly to new market conditions or even reinvent themselves. Whether individual products, services or the entire concept, many start-ups are constantly evolving thanks to their efficient structures. This ability also enables them to quickly enter new markets and find their ideal positioning.
Every start-up starts with an innovative idea for a product or service that does not yet exist on the market. While traditional companies tend to react cautiously to changes and miss possible opportunities, an openness to new ideas is already anchored in the culture of a start-up. This attitude runs through all areas of the company and should ideally be deeply embedded in the minds of the employees. An environment in which openness and innovation is encouraged supports employees and motivates them to develop new skills. A high degree of transparency and regular focus on objectives ensures that you don’t lose sight of the big picture.
Due to years of established, complex processes and structures, large companies have become slow freighters. In order to continue to play a relevant role on the market in the future and not to be overtaken by small fast sport boats, a change of perspective is necessary. It’s not only important to integrate agile methods step by step, but also to establish an open culture of innovation to create room for creativity and unexpected employee potential.