What large companies can learn from the working culture and methodos of startups The linear career path is long gone. Organizations need managers and executives with a high degree of diversity and curiousity to navigate through uncertainty. People who were exposed to a startup or involved in intrapreneurship experience

1. Startups and large companies.
What large companies can learn from the working culture and
methods of startups and why you need to navigate through the two
realities along your career
29 ottobre 2014
Roberto Sapio Stefano Mizio

2. Future Work Skills 2020
2

3. Understading of both cultures
Large companies and Startups
Different Janus two-faced Perspectives

4. I started my career as a startupper…
Startupper
MBA
Innovits
Country Sales
manager in a large
company
Roberto

5. I started my career in a fast growing company
Vodafone
Omnitel…
MBA
Silicon Valley
Startup
Innovits
Stefano
…long time ago
Senior
Consulting

6. VUCA

7. Business Models have always lasted a long time
P. Hobcraft

8. Startup Definition
Steve Blank

9. What does a business model mean?

10. Here ...
• “A business model is simply the ‘way of doing
business’ that a firm has chosen: (Davenport, T. H., M. Leibold and S. Voelpel
(2006). Strategic Management in the Innovation Economy. Publicis Wiley.)
• “The business model is a company’s answer to the
question of how to make money in its chosen
business. It describes, “…as a system, how the
pieces of a business fit together” (Magretta, J. (2002). "Why Business
Models Matter." Harvard Business Review 80(5) May: 86-92.)
• A business Model is the the story of how value is
created, delivered, and captured.

11. Can you describe your Business Model?
Maybe not…because it has been in place since the
business was started… It is taken for granted!
Stability

12. Are you aware of it?
“In the twenty-first century business leaders are unlikely to
manage a single business model for an entire career”.
S.. Kaplan
"Business models are not meant to be static. In the world
we live in today, you have to adapt and change. One of my
fears is being this big, slow, constipated, bureaucratic
company that's happy with its success. That will wind up
being your death in the end." Nike CEO

13. Blockbuster
Blockbuster was netflixed!

14. Netflix, netflixed
Verb:
1.to cause disruption or turmoil to an existing
business model
2.To destroy a previously successful business
model
3.To displace the way value is currently created,
delivered, and captured
4.To be disrupeted, destroyed, or displaced by
new business model.
S. Kaplan

15. David versus Goliath
Senior management were so busy pedaling the
bicycle of their current business model they didn’t
think about and experiment with potential new ones.

16. Do you agree?
Too big to produce game-changing
inventions?
innovate?

17. Uncertainty Ratio = Assumptions/Facts
Entrepreneurial management
could be more important than
traditional management…

18. What if your best friend has a great idea…
Instead of purchasing designer dresses, women
might prefer the option of renting designer dresses
online for special occasion.
What would you advise??
“Write a Business Plan”
Customer need
Product&Service Size of the market
Revenue&Profit based on projections of: pricing
Example by Nathan Flurr
costs
Unit volume
growth
Anything else?

19. Or …
You can suggest to set up an experiment to answer
some “Key questions”
Will middle – to – upper class
young women rent a designer
if it is available at one-tenth
the retail price??
Will women who rent dresses
return them in good
condition??
Or…Would women rent
dresses they couldn’t try on??
Example by Nathan Flurr

20. So …
•You can borrow or bought 100 dresses from
designers;
• rent a location; advertise around your campus
and invite young women and test your Hypothesis
This is exactly what happend
The experiment answerd the
first two questions
This experiment resolved
some of uncertainty reflected
in the two questions it was
designed to answer.
Example by Nathan Flurr

21. “its inventory dressed 85 percent of the ladies who
attended President Obama’s second inauguration”
Example by Nathan Flurr

22. Performance Engine
Traditional management theory
certain type of problem: attempting to optimize
under conditions of relative certainty

23. Houston we have a problem
New business ideas
–outside and inside
organizations – are
characterized by a
different type of
conditions:
uncertainty

24. The right style of management
How can we lower
costs by 5%?
Will people buy products
over the internet? (Amazon)
by Nathan Flurr

25. A riddle
Alfred Sloan
General Motors
Billy Durant
Founder of General Motors

26. The best you can do is guess and you may be wrong…
Guess Guess
Untested hypotheses
Guess
Guess
Guess
Guess
Guess
Chief Experimenter vs Chief
Decision Maker
Guess Guess
Business Model Canvas by A. Osterlwalder

27. How and Where decisions are made
“…you know how big companies make decisions:
they tend to rely on politics, Powerpoint and
persuasion.” Tim Cook - Intuit

28. Let’s consider this case
You have to choose between two investement
proposals:
• a team of young entrepreneurs hoping to bring word-of-mouth
marketing to China (team A)
• Seasoned team inside large company looking to tap into a
growing segment adjacent to its current business (team B).
Team A
• They forged their idea in
the “white hot heat” of the
market.
• Many assumptions that
remained were grounded
in the Real World of
Experience.
Team B
• They forged their idea in
the lights of the conference
room.
• The plan was based on
assumptions the team
didn’t even realized it was
making.
By A. Scott D. Anthony

29. Team A got founded
Why?
By A. Scott D. Anthony

30. Team A fits the right “process to make decisions”
Team A Team B
• They had spent
significant time in the
market pitching their idea
to potencial corporate
customers.
• They simply hadn’t done
the fieldwork.
•The proposal
underestimated how
unique the value
proposition was compared
with offerings from
competitors/startups.
The Ratio of the time spent preparing for and attending
internal meeting to the time spent in the market < 1:3
Experiments
By A. Scott D. Anthony

31. A new strategy for entrepreneurship in the 21st corporation
• forming “leap of faith”
assumptions;
• rapid testing those
assumptions through
experiments;
• letting the data make the
decisions.
What’s the fastest way to get an experiment to test that idea?
Vs. traditional approach (build and deliver)
Steve Blank

32. Startup and established company
“In God we trust,
all others bring data.”
- W. Edwards Deming
Ongoing operation (90% data,
10% unknowns): central focus is to
execute the plan.
Innovation initiative (10% data,
90% unknown): the plan is a
hypothesis.
There is comfort in Data ☺

33. Leaps of faith assumptions
The Value Hypothesis The Growth Hypothesis
The Minimum Viable Product
Eric Ries

34. We have a set of management practices and theory

35. Customer Development Model
or How we search for the business Model
Search Execution
Pivot
Learning and Discovering
Design experiments, start
listening
• there are no fact inside your building
• testing your hypotheses outside the building
• no business plan survives first contact with customer
Steve Blank

36. Core Principles: scientific method
By S. Blank

37. The two worlds are coming together

38. Implications for Big Companies…

39. 21st organizations

40. Established Companies
hard-to-replicate advantages over start-ups
Entrepreneurial
approach/method
Experimentation/ get out of the
building : diagnostic camps to
identify potential patients or
engaging in customer discovery
Business Model Validation
Open minded
Observation
Humility
Unique capabilities
Partner relationships
Strong Brand Reputation: local
doctors/ Regulatory approval/…
“Last mile” distribution
channels
Process and internal resources:
design, staffing and execute
pilots and expanding programs
Recombining existing
capabilities

41. Break all the rules?
You are the Innovation leader and just joined the
company. You live the “ startup garage” culture
The CEO told you : “guy, we must innovate!
What do you do?

42. Again, Break all the rules?
Ok, Hero, What do you do?
You can say: we , the innovators, are a blessed
a superior lot
They can say: you seem to think you are
superior, you get all the glory,…

43. No custom organizational model in place
Ongoing Operation Innovation
Strategy
Organizing
&
Planning
Execution
Committing to
an Innovative
Idea
Making
Innovation
Happen
V. Govindarajan – C. Trimble : The other side od Innovation
Something missing
Agile approach? What
kind of relationships?
Skills? Operating
rythym?
?
“Great idea! Go
make it happen”
Trap: using
existing
processes

44. Organizing an innovation initiative
Company
Performance Engine
Shared
Staff
Dedicated
Team
Partenrship
Intrapreneurship Startup – acqui-hiring
V. Govindarajan – C. Trimble : The other side od Innovation

45. Intrapreneurship/Corporate Entrepreneuship
Intrapreneurship can be defined
as using entrepreneurial skills
without taking on the risks or
accountability associated with
starting your own business.
Instead, intrapreneurs are
employees in larger organizations,
who act as entrepreneurs while
having the resources and
capabilities of the larger firm to
draw upon
Corporate Entrepreneurship: is
the process by which individuals
inside organizations pursue
opportunities without regard to the
resources they currently control
(Stevenson)

46. What are the challenges of partnership??
List
Competition with Performance Engine leaders
for scarse resources
The divided attentions of the guys in the P.
Engine you need
Disharmony in the partnership
Remember: one person against the system is
an extraordinarily bad bet

47. Managing Diversity
Dedicated
Team
(Startup)
Performance
Engine
Conflicts must be anticipated, mitigated or
neutralized

48. Summarizing…
•Organizations need more “innovation” but don’t
know how to do it.
• Established companies are Performance Engine
with an “ efficiency uber alles” culture.
•A new set of methodologies are emerging from
startups (lean startup, customer development,
agile approach).
• Reverse mentoring is taking place (millenials –
digital native).
• Large organizations need new perspective (
startup or intrapreneurship).

49. The linear career path is long gone
Having experience within corporates and startups can give you different
perspectives and methods to manage uncertainty and your personel career.

50. Bridge Building

51. Innovits is committed to bridge the gap!
A BRIDGE BEETWEEN TWO
CULTURES
EXCHANGE
COLLABORATION
STARTUP MANAGEMENT
InnoVits is a non-for-profit organization who is
contributing to create an Entrepreneurial,
Innovation-Based Economy fostering startup
methodologies and contaminating traditional
management practices and culture.

52. A new Breed of manager
Organizations need a structure and a
corresponding culture where accelerated change is
the new normal. It requires an environment, a
strategy in which experimentation and pioneering
is the most common thing to do in order to be able
to innovate.

53. This talk...
Innovation begins with your look at the world
By Frits Oukes
Illustration from the film Bakara 1992
It’s a matter of perspective