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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These and many more difficult questions arise and management will need to handle them in a unique context, because success of Startups are diverse and rare. These ample difficulties are well known and it is not a surprise that most Startups will not fly. Forbes is one of many sources writing about the fact that 90% of Startups fail and the authors behind Blue Ocean Strategy claim that 90% of all businesses fail within ten years.
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.
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When I hear managers speaking this language I do understand why an organisations have a hard time being innovative.
Large established companies execute on known problems with focus on planning and executing. They know what to build and who their customers are.
Entrepreneurs and Innovators tackle unknown problems with an unknown solution. Instead of executing entrepreneurs must search for the right problem to solve and the right solution and searching requires a very different set of activities than execution.
When large companies need to grow or stay in a changing market they do not have an executing problem, they have a search problem.
Silos..picture of value chains and functional entities
ignite your coworkers passion and energy
People bypassed not belived in
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