Social business : be inspired by startups, really ?

start-upCécile Demailly has written an article on her blog in june, What corporations could learn from startupsThere is a long time that I want to write an article about this issue, her article is a good excuse to make it. Even if I share some points with my friend Cécile, I think some points needs to be highlight. I know Cécile Demailly and I had some esteem for her professional abilities and she knows what is involved in organization transformation and the change management required. It’s just to easy to say let’s do it like startups

Now this idea of ​​ »just do it  » is a little simple. Transforming an organization can’t be done with a magic wand and even if a decision is taken at the highest level , it takes time and often in pain (for example with Cisco, for this organization evolution, the CEO John Chambers fired 1/3 of the top management and it has taken several years). So when I read many articles, especially by people who do not know much about enterprise, why big companies do not act like startups, esay as a snap, makes me laught. Not to mention the 2.0 pro who feel that the employees just waiting for that.

In the first place, the myth that startups are necessarily a wonderful world. I’m curious to see who may wish to work without counting the hours hoping for a hypothetical coming of venture capitalist or IPO (where you are young may be more but after…). It is not given to everyone, and  for a success story, how many startups have failed at the same time, a lot. So the way of working and the commitment of the employees in a start up is not for everyone. The human resources management  is particularly important in this type of structure. Employees must go in the same direction as the founder  and the desire to excel on daily basis should be the same.

Then, startups haven’t an organizational model defined, but it is even often where they are the weakest, while this is a major point of development (a real issue when they grow). Numerous startups work in a traditional ways, if not in a conservative manner, and are anything but an innovative model of management and organization. So no, there is not A start-up working model.

But mostly, it takes time to transform an organization (but enterprises which are working on social business projects do not want to hear that or understand), it does not happen overnight (it’s more a marathon than a 100 meters). Indeed, startups starting from scratch and if they wish, they can invent their own model. This is not the case of all organization. As Pascal Picq shows with its triangle adaptations in his book , A paleoanthropologist in enterprise (adapt and innovate to survive ), a company is based on three angles :

  • Processes
  • History
  • Structure

If we can rework  « easily  » the processes, history represents the culture of the company and its identity, and cannot be shaked like that. Similarly, the structure that carries in it the  formal and informal relationships that structure the organization, cannot be ignored. It’s true at all levels of the organization. Make a clean sweep of the past remains a slogan ineffective in this regard. So it takes time, step by step and if possible with all the stakeholders, who do not necessarily have the same vision.

It’s like Gary Hamel’s article in the Harvard Business Review : Let’s fire all the managers who did swoon all the thinkers of 2.0 ( although it works fine and then it doesn’t mean it will work everywhere ). I am excited to see the face of the CEO when we will just explain him that he has just to turn managers who are useless. Besides the fact that the French labor law don’t allow that, the social business message is that new enterprise way incorporates everyone. Schizophrenic ?

So, each company has its history, its culture and this is why we can not make a methodological support just ready to use. Then when we talk  about a  » start-up model  » that something more than vague and can’t be reproduce like that.

  • Claude Super

    You are right Anthony, there is not A « startup model », there are a lot of business models (more or less successful) and unfortunately there is no place (or so few) for the main management issues or choices (priorities else than making money).
    StartUps are most often focused on developing an innovative product and/or service and searching funds, nothing else !
    Why ? Because in a lot of people’s mind, innovation is key, not management, which IMHO is far to be true 😉

  • Anthony Poncier

    Indeed Claude 😉

  • leebryant

    I broadly agree with this, but I think you go slightly too far in accepting corporate structure and practice as useful. When you say « startups haven’t an organizational model defined, » this is often true, but equally they can often create structures and practices that look nothing like the corporate model, but are orders of magnitude more professional and efficient. I think right now corporates have more to learn from startups than the other way around.

    A key point here is your acceptance of the three « angles » that make a company: processes, history and structure. Whilst this model describes how most companies think of themselves today, it is not necessarily correct (I am not discounting Picq’s wider thesis as I have not read the book). Process and structure are not fundamental to what makes a company. Instead, they are (or should be) servants to the value chain and customer relationships. History, and its role in culture formation, I agree is important, but what interests me is that if you interrogate the history of 100 year old+ companies you tend to find they have pivoted, shifted, taken risks, almost died and also have replaced their processes and structure multiple times whilst holding on to what matters: value creation and customer relationships. If you look at ‘what makes a company’ from this point of view, then startups are often more focused on what matters than the corporates they disrupt.

    Of course, the simplistic message of ‘fire all managers’ and ‘make a clean sweep of structure and process’ is not a sensible one. But even in a more nuanced, gradual process of change, it is important to hold on to the right things, and in general, process and structure are not the most important.

    If we boil down what we mean by « startup model », I think we are looking at elements like agility, task-focus, lean management, customer-centricity, data/evidence-based, collaborative, etc. These are all much needed inside corporates today.

  • Anthony Poncier

    Hi @Lee, I don’t think I’ve said that structure and practice are useful, otherwise I wouldn’t work on social business to make companies evolve. You are right, companies have to transform, but I think it takes time and secondly I don’t believe that there is a start up model (most of the time it is a management failure, and leading 30 people or 30 000, it’s not the same, as you know), even if there is something in their culture like the acceptance of taking risk that would be useful for big companies. It’s just that start up start from scratch, not companies and it’s a big difference.

    About this model, yes I think companies are based on this angles, and most important even if part of this model is wrong, mental representations could be more important thant reality, and it’s as well a mental representation. So yes it can change, fortunately, but when you see Burberry’s for instance, it has taken 6 years. And if companies are not able to change, they died, like history shows.

    I agree with your conclusion, companies should more focus and the right elements, and if they don’t it shows that things are more complex than in startups and it means you and mean have still a lot of work to take them to these value area.

    Whatever thank you for this interesting comments