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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The second best argument for putting any new business under a separate umbrella is control and security. "It is important the current business can develop and operate without disturbance. The Startup has a small fixed budget we could afford to lose. If it fails we will just terminate it. The rest of us will continue to serve our customers and and make sure cash is coming in". Does it sound familiar? Yes, I have seen many organisation handle their future like this.
I have heard many more arguments in favour of the "Startup then Core pattern" and of course it is not easy to deal with the unknown future. When there is a fairly simple model with apparently working tools and famous success stories. Why should it not be the way to go?
When it happens, initiatives for the future come as scattered sheds not seldom shortly after a new CEO has taken up the position.
Many would argueA third argument would be; "Look, Google has Startup labs which are working separately on new products. That is the way to go!" What these people forget is that Google have has a mindset of creating new business also in 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 is putting creating cultures that embrace current customers and cash flow first.
Yes, I do agree on diversity of people and tradition. Some people are more keen on changing for the future, others like to improve the current business. But to address this fact by organising people in different boxes could be the wrong path. Instead leadership needs to be divided in what, how and process. I have seen many managers sitting on several chairs...
When I hear managers speaking this language I do understand why an organisations have a hard time being innovative.
Silos..picture of value chains and functional entities
ignite your coworkers passion and energy
People bypassed not belived in
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 challenge
But what to do with the I have heard many more arguments in favour of the "Startup then Core pattern" and on the surface it sounds like great approach. When there is a fairly simple model with apparently working tools and famous success stories. Why should it not be the way to go when dealing with the unknown future?
The challenge
The question is what to do with future ideas in the long run? When the "Startup then Core” pattern is practiced the ultimate challenge is always how to scale the ideas.
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Another well known fact is that many prosperous businesses will not keep on flying. A widely used measure is the list of the Fortune 500 companies. A number of articles point out that just 12% of the Fortune 500 companies included in 1955 were still on the list in 2017. Mark J. Perry, who is Professor of economics and finance, calls this phenomenon “creative destruction”. And all signs show it will get worse. In a report in 2016 Innosight writes that half of the S&P 500 companies are expected to be replaced over the next 10 years.
When it happens, initiatives for the future come as scattered sheds not seldom shortly after a new CEO has taken up the position.
The friction between new and old
As a business owner or C-level manager I think you want a business that can handle both the current, the next and the future, or horizons as it called in the book The Alchemy of Growth. You probably want the entire business to follow the same values, goals and take advantage of the corporate culture and tradition. If were to set a separate entity to handle your future, what would people say?
Yes, I do agree on diversity of people and tradition. Some people are more keen on changing for the future, others like to improve the current business. But to address this fact by organising people in different boxes could be the wrong path. Instead leadership needs to be divided in what, how and process. I have seen many managers sitting on several chairs...
When I hear managers speaking this language I do understand why an organisations have a hard time being innovative.
Silos..picture of value chains and functional entities
ignite your coworkers passion and energy
People bypassed not belived in
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.
What are the thought leaders saying
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