Are you turning in to a “big company?” Photo via Bigstock

The kind of big-company behavior we all hate – bureaucracy, slow decision-making, politics, stifled innovation – doesn’t just happen at big companies. It creeps into new businesses as well, with just a handful of people.

If you don’t actively watch for it, proactively keep it out, and eject it immediately when you see the first signs, it can infect the organization with little chance of turning back. And there’s nothing that saps productivity like acting like a big company.

It’s incredible how quickly big-company culture can take hold, but there are several things leaders can do to combat big-company behavior in their startups. Here are a few I’ve seen work most frequently and successfully.

Encourage a culture of innovation and failure

You’ve started or are working at a new business because it, inherently, is offering something new and innovative to the market. The way you build that product or service, the way it’s marketed and sold, the way it’s supported and grown – these processes often require innovative thinking as well. Risk-adverse behavior will stifle the kind of innovation that’s going to help you find new ways of accelerating success.

Of course, finding those new innovations by definition requires failure. You, your team and your business will fail often before innovation is discovered and capitalized. Encourage that failure. Encourage measured experimentation. Celebrate the learning and innovation that results.

Hire people with a proven track record of “doing”

We’ve all worked with really smart people who talk, think, question, write fantastic PowerPoint decks to prove it – but get little done. Many of these people appear highly attractive to startups. They think outside the box, and speak of highly innovative, disruptive ideas.

But in a new business, talk is cheap. Execution is what matters. And people with great ideas who can’t execute aren’t going to help you make money. Great thinkers need to be part of your organization. But consider them as advisors, not employees.

Build processes but avoid bureaucracy

Process has a bad reputation in the startup world. We like to be free-spirited, experiment, move quickly and be reactive to opportunity. That’s all fine and good, but once you identify something that works you’re going to want to do it again and again and again. That requires process.

Even innovation itself requires a process. Do you really want all of your developers writing code for different ideas all at the same time? How do you prioritize that? When you execute new sales or marketing experiments, how are you measuring success? How are you attributing causality of success back to isolated variables in the execution? This requires process. Bureaucracy slows you down. Effective processes make you faster, better, more efficient. You’ll know the difference.

Find business-oriented legal and HR support

Big company legal and HR people can be about as risk-adverse as you get. For many, their job (or what they perceive as their job) is to avoid as much risk to the organization as possible. That’s a fine objective on its own, but if unchecked it can kill innovation, speed and opportunity.

Among the world-class legal and HR individuals (and firms) available to startups today are plenty who can successfully balance their legal and HR responsibilities with the objectives and needs of the business. Their job is still to mitigate risk and help you grow, but they know it’s a balancing act, not a black and white game of winners and losers.

Measure everything, but focus on a small set of key metrics

There’s a big difference between the volume of business metrics you should capture, and those you should obsess about. Your marketing team may focus on natural search volume, cost per qualified lead, awareness growth, and so on. But the last thing you want to do, as a management team, is review dozens if not hundreds of metrics on a daily and weekly basis on an intimidating, size-6-font dashboard.

Mandate measurement across all departments, but focus on what matters most. Identify and obsess about the metrics that are truly driving and defining your business. These metrics will vary by opportunity – market share, customer satisfaction, customer growth, margin – but make them your primary focus and empower your managers and front-line staff to obsess about the sub-level measures that help get you there. A model of distributed ownership of metrics across the organization ensures everyone is focused on the right level of analysis and improvement.

Think thrice before hiring from big companies

The pedigree, education and experience of big-company employees – leaders and contributors alike – are highly attractive. And there are many, many individuals with big-company experience who are wired to excel at startups.

But we all know this isn’t true for everybody. People who worked in a big company may have no idea how to match that success in a smaller organization. Their skills may not be as transferable as you think. They may have been responsible for a set of success metrics, but what was their direct role in making that happen? Big company experience can mask this. Buyer beware.

Except when regulated by the SEC, set your employees free

If you’re hiring the right people to begin with, there’s no reason you shouldn’t be able to trust them to represent your brand externally. Your employees are one of your biggest and most important marketing assets. Their ability to evangelize what you’re doing to customers, prospective new hires, and new market opportunities that haven’t yet come to you is enormous.

If you want to give them guidelines for how to share and evangelize company information through their networks, fine. Give them tools and encouragement to do so, even better. The companies that do this best not only allow and empower their employees to share information and opinions. They also hire for it, and learn from it.

Empower more people to make decisions

More than anything on this list, centralized decision-making can slow down the best of companies. Founders, unwittingly, are often the biggest culprit. It’s your baby, you know what you want, you know what’s best, and you want it your way.

That may have worked in the early days, but as you grow it simply doesn’t scale. It’s hard, I know, but you must decentralize decision-making by empowering, encouraging and rewarding those around you to make smart decisions without you. If you can’t do this, you either hired the wrong people or need to rethink whether you’re able to help the business scale.

Reward outcomes, not output

Hard work doesn’t pay the bills. Long nights and weekends don’t directly matter. Email volume, specs written, PowerPoints delivered – none of this matters if you don’t build, ship and sell. The best startups give their organization freedom to do all of the points above, but focus rewards on outcomes. This starts at the top, with policies and examples of a focus on creating output that has a short, direct line to revenue and growth.

I’m sure this list is incomplete. I’m curious to hear in the comments below from those in the startup community who have seen other examples of anti-big business behavior and habits, and also examples of additional bad big-business habits to avoid.


Matt Heinz is president of Heinz Marketing, a Redmond-based sales & marketing firm. You can connect with Matt via emailTwitterLinkedIn or his blog. He writes occasionally on GeekWire under the column Productivity Porn. Previous columns…An introduction to productivity porn: How to be lazy, productive & successful… 15 New Year Resolutions for Entrepreneurs.… Productivity Porn: 7 tricks for beating procrastinationMain photo via Bigstock.

 

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Comments

  • J

    I like this article. Good points. I would be interested in reading a different article too: How to keep your Established/Big company from acting like a startup.

    • http://www.heinzmarketing.com Matt Heinz

      That’s a great idea for a follow-up article! There are some great best practices for very early-stage companies that don’t scale well as you grow.

  • Amal

    Rick, nice article but it’s “risk averse”, not risk adverse.

  • Mark D. Walters – GC To Go

    Matt Heinz is a great resource and this is another terrific article by Matt. If you have not done so yet, I encourage you to check out his company’s ten minute brainstrom service. Matt and his team do great work.

  • http://twitter.com/RedRussak Red Russak

    By far, my favorite is ‘reward outcomes, not output’. Healthy way to promote efficiency ;-)

  • http://twitter.com/tsupasat tsupasat

    I read this article yesterday and then today read another very complementary article on whether to hire from big or small companies. Both pieces are excellent analyses of company culture. http://www.perfectionparadox.org/2012/08/innovation-at-companies-big-and-small.html

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