How to out-innovate your agile startup competitors

For business leaders driving New Zealand’s large enterprises, the constant competition offered by agile startups can be exhausting. Around the world, organisations of significant size and power are being outmaneuvered by their pop-up counterparts. Should New Zealand’s major enterprises be trying to compete? If so, how can they remain agile?

1. Offer employee autonomy and reward success

By offering employees room to experiment - and more importantly, encouragement to do so - business leaders can give them the ability to fix their own problems. Few know better how to fix an issue than those who work with it on a daily basis. But it takes effort to reduce time pressures on staff at all levels of the business in order to give them this time to think creatively. Google’s famous ‘20% time’ is perhaps the best-known example of employee creative freedom in a large multinational company. The organisation paid people to take time out of their work hours to think about new ideas, leading to inventions such as AdSense, Gmail and Google News.

2. Encourage failure

Business leaders can adhere to one of two schools of thought - punishing people for failing, or rewarding people for trying. One reason employees may not be willing to express ideas is the fear of repercussions. Should their venture fail, they don’t want to be punished. However, failure is a natural part of innovation. As commentator Michael Malone once wrote: “Failure is Silicon Valley’s number one strength.” Expect failure, for it is an essential part of the learning process.

3. Flatten your management structure

As many startups know, a flat management structure - one where even the highest business leaders are accessible, friendly and willing to discuss ideas - can give staff confidence to speak up. That said, a totally flat structure is much easier in a small organisation than a large one, especially if that large business has multiple sites to manage. Larger businesses can flatten individual team structures as much as possible, and then create ‘innovation champions’ who have a good relationship with those higher up the org chart. Individual teams can innovate within themselves, then bring their top ideas up the ladder via their champions.

4. Start an incubator

A startup incubator is a program within a larger business that supports early-stage companies through mentoring and financing in a fixed-term period. Often companies group multiple startups together in a single incubator. The goal is to accelerate what would normally take years of work into a few months. Large enterprises that run their own accelerators have an opportunity to work with an agile startup model and the talent that comes with it without breaking their existing business structure. Successful startups can be integrated into the wider company, or kept as a separate investment. Innovation and success go hand in hand, but innovation is not restricted to agile startups.

Major organisations can foster a similar sense of creative freedom with a few simple changes, or with investment in key new processes. Ultimately, it’s not size that matters. What matters is mindset. Foster intrapreneurialism, encourage creativity, expect failure, and you can achieve innovation regardless of headcount.