Large corporations were dominating markets for a long time. Nowadays, things have changed.
Disruptive startups, of which there are many, are threatening to erode the seemingly unshakeable market positions of the established firms. Therefore incumbents, who themselves are not that successful at innovating, have every reason to be worried.
Becoming an Agile Enterprise
Enterprises are famously super efficient at executing established business models. Give them A – a typical product idea, and B – a known, well-researched market, and they’ll easily find an effective way of delivering the first to the latter.
However, if there’s no clarity as to what the end product should be like, and if the end user is yet to be discovered, their usual innovation practices start to bring more damage than benefits.
To stay on top, or even to attempt to remain relevant, big companies should learn to adapt. They should become more flexible, experimentative and agile – just like most startups are – and they must let go of the traditional business procedures, even if they achieved great results using them before.
For entrenched businesses, the inability to adjust to the current disruptive conditions is not an insignificant flaw. It has already put some prominent incumbents, like Kodak and Circuit Circle, out of business, and it will surely damage more of them as powerful startups keep appearing on the market.
So, do you find it hard to make your enterprise flexible and agile too?
If so, we might be able to help. We’ve worked with different enterprises over the years, of various business origins, and have come up with some useful tips to help companies like yours transform easily.
Firstly, why old is bad for an agile enterprise?
You know the deal.
In the past, launching a new product always required a business plan. You had to describe all your assumptions clearly and write down some non-ambiguous financial forecasts.
VCs and corporate boards wouldn’t even consider launching your project unless everything about it, its financial, clients and competitors related aspects, had been thoroughly examined and analyzed. It was only when you’d gone through that nightmarish validation, that you could start thinking about project execution.
Then, you started building. For months or sometimes years your team had to develop new products (or services) aligning them with old business procedures, with little to no customer feedback to guide you; in complete isolation.
Some testing was included of course but only to flesh out technical risks. You never showed product’s features to real clients while it was being made, and never tried to determine if there was a market demand for them until the very end.
And you didn’t do so because you didn’t need to.
As long as your “innovations” weren’t radically different from your company’s previous products, the market demand for them was all but guaranteed and, thus, using waterfall methodology to develop them was always your best bet.
But then startups came along, bringing completely new concepts to the table and creating markets no one even knew existed. They launched new products or, sometimes, brought in alternatives to the existing ones – offering more speed, convenience, and lower prices. And, also, they were much more effective at innovating.
Startups focused on experimentation, rather than planning, and came up with a methodology that allowed them to deal with the conditions of extreme uncertainty. They used iterative development and collected, all the while, all the customer feedback they could. They were flexible and it gave them a huge advantage over cumbersome enterprises.
While that was happening, some corporations (GE, Qualcomm, Intuit) realized how crucial it was to start adopting startups’ tools to innovate differently. And some didn’t.
If your company is still among the second ones – here’s what you can do to make a switch painless.
#1 Find a partner who specializes in agile development
Quitting traditional business practices “cold turkey”, though very sensible in theory, is severely hard in practice. Incorporating new business models takes lots of time and almost never runs smoothly.
To ease the transformation many big companies find themselves agile software development vendors to partner with and delegate most of the building of new products to them.
Such approach allows to isolate agile development processes from a toxic influence an enterprise’s usual outdated innovation tactics might impose.
Free from excessive bureaucracy, company politics, thorough supervision and a need to plan out and report on every small aspect of a project, engineers can devote themselves fully to the agile methodology. They can focus on the build-measure-learn cycle and leverage customer development with its MVPs, Pivots and iterations until they find a viable business model.
It’s not just development that huge companies often seek help with. The majority of modern vendors have under their roofs business analysts and experienced project managers as well. They are able to audit the existing innovation techniques within corporations, point out flaws and suggest ways to efficiently fix them.
#2 Encourage entrepreneurial spirit
One of the key differences between corporations and startups is how they look at failure.
Enterprises are focused above all on “playing it safe”. They take small, well-calculated steps when innovating and, if possible, try to avoid all risks. Consequently, their employees are reluctant to voice any out-of-the-box ideas, as anything new seems to them a possibility to make mistakes.
Startups, on the other hand, embrace failure thinking of it as the only way to learn.
They go from failure to failure quickly, accumulating knowledge the entire time. They’re always ready to adjust their initial ideas, substantially (with pivots) or slightly (with iterations), and aren’t protective of the features their clients have deemed unnecessary.
Failure is what startups expect, not what they’re afraid of.
To encourage this startup-like thinking at your enterprise, start rewarding those who come up with bald ideas. Offer to share profits with them if an innovation turns out successful, give bonuses to the initiators, and increase budgeting every time a project achieves market validation.
Also, put your own initiatives to the test. If you yourself start questioning and testing iteratively each of your ideas the employees will perceive this behaviour as normal, accepted within your enterprise, and will soon begin to mimic it.
#3 Give new people a chance to shine
Why hire brilliant people if you don’t let them bring new initiatives and, instead, make them do everything your way?
Experts should teach you, so give them a chance to.
Whenever someone suggests an innovation that seems worlds away from what you are used to, fight the urge to align it with your standard business processes. Instead, give your employees an opportunity to find new business models. Who knows? They might just save your corporation tens of thousands of dollars that it usually spends in project execution mode.
We suggest you start betting small on multiple initiatives, instead of throwing a fortune to complete one project and set up a milestone-based investment system. Not only will it inspire entrepreneurial talent in your staff to take action, it’ll also increase your odds for a big win.
#4 Agile is for everyone
We’ve mentioned above that becoming an agile enterprise isn’t an overnight affair. We think that snowball metaphor is a perfect explanation of how such transformation should play out; you should start small, execute one project iteratively, then another, and then, gradually, you’ll expand the agile philosophy across the entire company.
At some point, all the departments at your enterprise should become closer to customers and more experimentative. Marketers should be let to try new ways of client acquisition and conversion, finance guys should seek for new accounting methodologies and HR managers should instill better internal processes.
You never know where groundbreaking innovations might come from so you must establish an agile, safe-to-fail and innovative culture within your enterprise as a whole.
That’s it! We hope sincerely the advice above helps.
However, if you have a project in mind already; if you’d like to execute it iteratively, using the best of lean and agile practices – contact our expert right now.