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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The friction between new and old
In theory it is very loigical logical that any business wants should want to take care of both the current, the next and the future business, or commonly called the three horizons as it called is coined in the book The Alchemy of Growth. I want to believe that every business leader have the long term sustainable growth as their main mission. In practice, I have seen that it so emotionally difficult to, just slightly, give the current business a lower priority. The current business is where the customers are complaning, where the money is coming in and where the employees have theit their loyalty. On the very top the As if this was not enough, the current business is also where managers get most of their credit and create opportuniities opportunities to jump to new positions with even higher pay.
At the top of an organisation, owner or C-level manager or similar, the long term responsbilty is more apparant. Further It is exactly these emotional difficulties that requires the true leadership that seems to be rare. I can see managers trying lead their organisation in a certain direction, but further down in the hiarchy the sight normally gets shorter and it is very much the current business and the outspooken responsibilty that counts. Even if the top management are working hard to establish a long term vision including corporate identity, values, culture, tradition and such, the middle management is not very keen on changing for the future. I even heard frustrated leaders call middle management "permafrost" due their inability to drive change.
What top managment does managers do not seem to understand grasp is how strong the strong signalst signals coming from anual or quaterly reporting to In the same time reporting is very much
Who knows what will happen in the future? Maybe the investments for future horizons will be total waste.
Not everyone is aware
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As top level manager or business owner you probaby want to keep all your enties together when it comes to corporate identity, values, culture, tradition and such.
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.
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
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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