In various presentations, papers and books on innovation or leadership I have come across an organisational pattern I like to call “Startup then Core”. It is a pattern based on the idea that a new dawning business needs a special kind of leadership and special people, skilled and prepared to innovate in an uncertain world. Those in favour of this pattern also suggests that a mature business with “Execution” as its main mission needs leadership and people aimed to dwell in a more repeatable and secure world.
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Books like The Lean Startup, perhaps the most well known, and The Innovator's Method, which is taking the Startup methodoligy methodology a step further, asume a assume new and and old businesses need to be run in totaly totally different styles. I have heard many lean Startup fans saying "A core business do does work in completely different ways with large and long lasting projects".
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Then what is the alternative for any top executive executives who feels feel frustrated over the ability to stay in shape for the future market and want to have at least the same development pace as the competitors. I argue that the "Startup Then Core" pattern is far too risky. It has worked for some and will work again, but without plenty of luck and a full an overloaded wallet there are more reliable and deliberate paths. The organisational pattern I promote I like to call "Core and Startup And Core". The name looks very similar, but the "And" changes everything. "And" is all about integrating any new business businesses with the current business from start and let the two evolve together step by step. This is a pattern that is "easier to sustain over time" and it is less risky.
The "Startup And CoreWhen I write "easier to sustain over time" it absolutely does not mean "easy". It means; since the "Core and Startup pattern" is based on stable and evolutinary learning it will in comparision be more predictable and more controlled. However it requires hard work and courage from the leaders who want grow a business for real. And I'm sure it pays off, just heard Jeff Bezo's net worth surpassed 100 billion dollars. He is a leader with a clear sustainable path to create a company culture where every one should be involved in the future.
The "Core and Startup" pattern is based on the two main processes, Development and Operations, continuously going on in all organisations. Development primarily involves Product Development but also changes to take care of Business ModelModels, Processes and Tools, Mergers and Acquisitions and more. Operations is about running all daily business and interactions interaction with customers of the entire value chain including Marketing, Sales, Production, Delivery and Customer service. Operations also includes supporting support functions like Finance, Economy, IT-operations and Human Resources.
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Modern Product Development
What many Startup fans seems to have missed is modern Product Development has been tailored to handle all sorts of uncertainty. There are well proven frame works frameworks and techniques that supports the development of current business as well as any future business. It is true, many organisations are still working too bureaucratic and without acceptance of uncertainty. However the absolute majority is trying to adopt new and modern ways of working. The same goes for Operations which I think is more mature than Product Development in general. Continuous improvements, automation and empowering of people have been around for ages. The target is ever increasing volumes, productivity and the superior quality.
For those of you who think the sustainble "Core and Startup pattern" is just something I made up; take a deep look at Toyota who has had this model for decades even if ... Lean.. Production System ... Product Development System... Product Development flow and Innovations Customer focus and created many innovations both in product and in production. I guess Toyota is the most well-published and well-studied organisation in more than one hundred management books. A protest I have heard many times from my clients is: "But look, we are not a car manufacturer we are a ..... Those methods and thinking may sure work in the auto industry, but certanly not in our business." If you think this kind of statement is valid for you I urge you to take a closer look at Toyota. Specially the Toyota Product Development System.
Why splitting organisations?
So from where comes the need to split organisations according to the "Startup then Core"-pattern? Most likely from the belief that mindset and techniques are completely different when it comes giving birth to a future business. Many would argue; "Look, Google has Startup labs which are working separately on new products. That is the way to go!" What these people forget is Google have mindset of creating new business also it their core. They foster all employees to be innovative and seek the future. This is not the case in most organisations, regardless of industry, management has put is putting current customers and cash flow first.
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I have heard many more arguments in favour of the "Startup then Core"-pattern and of course it is not easy to prioritize the unknown future. When it happens, initiatives for the future come as scattered sheds not seldom shortly after a new CEO has taken up the position. So what
The feedback loops
What is the trick with the "Core and Startup and Corepattern"-pattern? How is it possible to make it a long lasting process that successfully will deliver?
First of all short feedback loops and swift change is needed both for the current business and any new business. Top management need to establish behavior and culture supporting short feedback loops and the ability to do swift changes. Failing to do so will ultimately risk the the survival of the organisation. In order to understand what "short" and "swift" are, it is crucial to have metrics in place to guide on the path of improvements.
The feedback should come mainly from Operations to Development. There are other flows of feedback, but preferable involve Operations also for new and not industrialised products. Operations acts in the reality and thus gets need to catch the real insights of the customers. Since also customer needs. The insights may leed to improvements of the Operations Operational processes are needed or
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Yes, I do agree on diversity of people and tradition is different. Some people are more keen on changing for the future, others like to improve the current business. But to address this fact by puttinng organising people in different boxes could be the wrong path. Instead leadership needs to be devided in what, how and process. I have seen many managers sitting on several chairs...
Silos..picture of value chains and functional entities
ignite your coworkers passion and energy
Tech driven instead of driven by values and customer need
For a small business without unlimited resources it is more clear how to do it.
Devops It
Both dev and operations need to improve quckly Never swift and easy to scale up a Startup Establish continuous growth and change instead
I know there are a lot of experts that do not agree. Knowledege on Product Development
My plan is to write a small series of articles regarding the two alternative organisation patterns, "Startup then Core" or "Core and Startup and Core". Next topic is innovation.
Emerging ideas..........Silos..picture of value chains and functional entities
ignite your coworkers passion and energy
Tech driven instead of driven by values and customer need
For a small business without unlimited resources it is more clear how to do it.
The role of suppliers is raises more questions. Are we ready to climb the value pyramid and outsource low end parts to suppliers?
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