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Why is it commonly known that startups have bigger potential for innovation and disruption than traditional organizations?

 

Is traditional business capable for innovation and disruption?

 

Those questions are commonly raised during board meetings, when grow is considered as one of the priority.

It is said that business is all about people and innovation strategy without right leaders in place is unlikely to happen.

Leaders with vision, usually different than commonly seen are those which other see as big asset in organization. However, in many cases it is not enough to make innovation and disruption happen.

What is then main reason why traditional organization is unlikely to innovate and disrupt the market?

According to #CorporateDifferenlty researches it is all about people indeed.

Here what comes from the researches:

🤙In startups more than 50% of people (including 50% of leaders) working there are those who see the world from entrepreneurship perspective. It means that they have in their values creativity, competitive approach, make things better and experimenting – meaning all together ability to take bigger risk when it comes to the business. We need to address that it does not mean that those people want to set up their own business. It simple means that they believe they have impact on organization.

🤙In traditional organizations up to 70% of people (including 30% of managers) see the world from self-security perspective. Those employees have low ability to take risk not only in business but mostly in personal life. When they have savings most of the time they spend to protect those savings than think how to invest them. They like well-defined structures, clear rules and have aversion for trying and mistakes.

The conclusions appear automatically and you do not need to be Sherlock Holmes to spot the difference.

Traditional business is then perfect to grow steady and in profitable way when reaches certain scale, however overall business personality of such business is less capable for taking bigger risk.

Coming back to the first questions: is it then possible that traditional business can be disruptive?

Answer is yes – and answer is in the way who you designate to make it happen.

According to our observations and work done with innovative businesses we see the following decisions which need to be made to make the possible:

✅Make sure you build the team from the people to whom entrepreneurship value is one of the top.

✅Separate innovative team from traditional structures

✅Give the team autonomy and possibility to try and error approach

✅Communicate the change in organization taking into consideration that you still have up to 70% of employees looking at the world from security perspective. They need to feel secured at their current position

✅When innovative team start to approach repetitive success engage rest of the company to look at the problems. Make the list and bring the problems to be solved by innovative team

✅At the end plug in the innovative idea to your profit formula – but only then when the innovation is ready to scale.

Follow the list above gives you pretty good chance to increase your organization innovation capabilities and make significant impact on the market.

The question is only how to spot those entrepreneurship employees – there are many ways to do this.

We observe that many companies do try and error approach, make internal start up peach approach to spot them.

There is also easier and more efficient way to make it happened.

Want to know more – contact us. We will share approach to do it.

 

Author

Krzysztof Herdzik

Co-founder of Corporate Differently

Graduated from Disruptive Business Strategy at Harvard Business School

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