How large organisations can embrace start-up thinking to achieve digital transformation
The Volocopter VC200 has 18 separate rotors and looks like a giant insect. Its makers, E-volo, claim the one person passenger drone is more stable than a conventional helicopter. Packed with gyroscopes, accelerometers and magnetometers, an on-board computer system is able to fly the aircraft more or less autonomously. Google is working on something similar. They are calling them self-fly cars.
A click through your favourite news website will confirm that the pace of innovation has never been faster than it is today.
For the most part, ground-breaking ideas such as self-drive cars, or one-person passenger drones, are coming out of relatively new companies. That has not always been the case.
For most of the 20th century, big corporations were the innovators.
Economist Joseph A.Schumpeter argued that they were better placed than new companies to innovate, because they were able to pour vast sums into research and development labs to develop breakthrough ideas.
But the arrival of the digital information age has changed all that.
The emergence of mobile, cloud computing, big data and social media is seeing established companies lose ground to small, nimble start-ups.
It is hard to underestimate this shift. Most business leaders regard digital transformation as the biggest challenge of the era.Unsurprisingly, some big companies are feeling the squeeze, while others are coping admirably.
New ways of working
Large organisations know they need to work in new ways.
They understand they need to arm themselves with the processes that will enable them to get to market faster and more effectively, innovate new business models, products and services, optimise their business operations and create exceptional end-to-end customer experiences.
But they also know that they cannot do it by themselves.
Because effecting change like this – becoming quicker, more agile, more innovative – in a large organisation, with well entrenched processes, is a big deal.
More than anything else, it means bringing about a shift in culture. This is about people and process, and rethinking the way the business operates to embody the speed and flexibility of smaller, transformative companies.
That is no easy feat. So how can big businesses transform themselves to embrace a culture of innovation?
Learn by doing!
Learn by doing – bit by bit.
It’s not about revolutionsing the way you work in one foul swoop. Change like this doesn’t happen overnight. Nor should it.
Its about making small, incremental changes, to test out a new way of working and try your hand at a different approach.
Agile and lean methodologies are not theoretical – they’re practical. They must be embedded gradually into your organisation, by doing small, cumulative pieces of work.
By putting agile into practice, bit by bit, large organsations can learn as they go, at low cost.
Take, for example, CAF’s Five Day Challenge. It’s a time-boxed period in which companies get from idea to prototype in record time. It’s about putting a project into fast-forward so that businesses can test new ideas quickly, at low risk.
But it’s about doing this collaboratively so that teams can learn from each other, and businesses can try a different way of working that can then be applied across strategy, techonology, product and marketing.
Don’t fear failure
There are many organisations who are nervous about ‘doing agile’. Undoubtedly, change is scary. Plus, agile doesn’t guarantee success.
This is where little steps make a big difference. By making incremental changes, in a time boxed period, you can transform your methodology and mind-set, without fear of failure.
If you fail, you fail fast, and fail cheaply.
But what’s imporatent to remember is that failure is no bad thing. In digital transformation projects, the process is just as important as the outcome.
If you set out to embrace a new way of thinking, its never only about what your project achieves (in a tangible sense).
Embracing start-up thinking is about starting somewhere; putting yourself on the road towards real digital transformation.
Smaller, quicker and more nimble organisations can help you along that path. But it’s a journey of multiple small steps, and often the most successful involve several partners working together.
United we stand
Successful businesses have cultivated an environment rich in diverse perspectives, and skills. They provide vehicles for these perspectives to cross-pollinate.
Once you’ve embraced a new way of working, and experimented as cheaply and as quickly as possible, you can dramatically scale up.
Nespresso’s original markets were restaurants and hotels, then Nestlé tried offices. None of that worked. It was only when customers at home were targeted with a luxury positioning that an effective business model came together. Today, Nespresso is one of Nestlé most profitable products.
Nestle’s experience with Nespresso shows that the most significant advantage that established companies have over start-ups is their ability to mobilise and scale innovations, quickly, across markets.
What companies like Nestlé, 3M, and GE have shown us, is that established players have amazing talent, and great ideas, among their employees and networks.
When that aptitude, along with the immense resources that companies like these have at their disposal, is combined with start-up thinking and new ways of working, the results are incredible.
At CAF, we’ve worked in partnership with many large organisations to transform their businesses, upskill their people, and adapt their processes. We’ve helped them to embody the cuture of innovation that is an essential part of digital transformation.