In various presentations, papers and books on innovation, entrepreneurship 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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What is the trick with the "Core and Startup pattern"? How is it possible to make it a long lasting process that successfully will deliver?
First of all come short feedback loops and swift change is needed both for changes as the essence needed in both the current business and any new business. Top To make it work, 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 preferable involve Operations also for new and not industrialised products. Operations acts in the reality and need to catch the real insights of customer needs. The insights may usually lead to improvements of the Operational processes or . To take the full benefit of this modell, operations must also feed the insights back to the development process. A great advantage is when the are insights are based predefined asumptions and hypothesis, not just random findings.
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Devops It
Both dev and operations need to improve quickly Never swift and easy to scale up a startup Establish continuous growth and change instead
Emerging ideas..........
The role of suppliers raises even more questions. Are we ready to climb the value pyramid and outsource low end parts to suppliers?From a technical perspective it is equally difficult, or easy, to establish short feedback loops in a startup as in a core business. In my experience the difficulties are the same regardless of company size. The large impediments, I see, is all about the leadership. If a core established business can overcome these impediments it will have many advatages over the startup. More control of resources, existing customers to connect with and hopefully a great future vision.
Final words
The target audience of this article is not those who have a unique and fantastic idea and want to create a new innovative company. The intention is to reach out to normal companies, large or small in any industry, who want to take care of their future business. I want describe how futuristic development can be incorporated as a part of the normal work and where all coworkers are able to contribute.
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