Never before has Darwinism been so alive and well. I'm not referring to the survival of the species, but to the survival of corporations.
As new technologies transform the business landscape, companies increasingly need to adapt or get left behind. We've already seen this happen in various industries. The Internet has mostly extinguished print newspapers, video rental stores, and bookstores, replacing them with online journalism, Netflix, and Amazon. And now, the rate at which new technologies emerge is so aggressive that brands almost need to respond in real-time to stay ahead of the competition.
Companies like AirBnB and Uber have been receiving a lot of media attention lately because of how they have affected hotels and taxi drivers. You can also see bubbling change on the horizon for manufacturing due to 3D printing advances, healthcare as a result of improved portable devices, and many others.
Technology is not only changing the business landscape, but also the fundamental nature of work itself. Companies are seeing shifting trends in employment. Whereas before it was the norm, it is now rare to see employees stay at a single company for 40 years before retiring.
Job hopping is the new norm for millennials. According to the most recent available data from the Bureau of Labor Statistics, the average worker today stays at each of his or her jobs for 4.4 years, but the expected tenure of the workforce’s youngest employees is about half that. Additionally, it is expected that by 2020 more than 40% of the US workforce will be freelancers, according to a study conducted by Intuit in 2010.
So why is any of this even important? All of these trends have huge implications for every part of a corporation. Marketing, IT, Operations, Human Resources, you name it. Each of these areas is (or will be) in flux as these changes continue. The big question is: how do corporations adapt to survive?
Act more like a startup.
In general, startups are more agile and quicker to adopt new ways of doing things. They are constantly tinkering and improving and have mastered the art of maintaining fluidity within their strategy. This is largely due to the fact that startups tend to not be bogged down by a large workforce or ingrained procedural bureaucracies.
You may be thinking this is impossible for corporations as large as Microsoft and AT&T. And yes, there would be many challenges - complex processes, thousands of employees, varying cultures across international (or national) locations, inertia, and so on. But it’s not impossible.
Corporations already have various advantages over startups. They have an established brand, steady stream of revenue, and a pipeline of customers. This gives them the ability to take better care of their people, fund new projects, and weather the ups and downs of volatile sales cycle. In fact, these advantages are so valuable that large companies should be out-innovating startups.
So why are corporations largely still falling short?
In some cases, it’s not for lack of trying. Corporations have been trying to inject entrepreneurialism into their organizations for decades. They have attempted internal innovation competitions, built dedicated innovation teams, and developed cultures of innovation.
But with the overwhelming scale and complexity of many large corporations, to innovate successfully, they have to turn their current disadvantage – widespread use of process – into an advantage. Ideally the organization would adopt or create a coherent approach to innovation, one that allows successes to be replicated and failures to provide lessons for the future.
Creating an innovation process with guidelines (not hard rules) would enable the innovation engine to run more effectively. This seems to be counterintuitive, to acting like a startup but let’s face it, large corporations are no longer startups. They need to marry the best aspect of both worlds in order to grow and remain relevant.
The technological wave of disruption will continue to drive progress. This is great for society but businesses need to figure out ways to stay afloat. With each new tide, companies will need to adapt or fizzle out. And with each change, corporations will need to realign their people, processes, and technology. The faster that companies accept this and the more adept that they become at this realignment process, the more buoyant they will be.