3 Things That Small Companies Can Learn From Large Companies
BY George Arison
Leaving a giant like Google to launch a startup doesn't mean starting from scratch. Some of the big boys' systems and policies are worth integrating no matter what size your business is.
Four months ago I left Google--an amazing company full of some of the greatest people I have ever met, with an incredibly positive culture that helps you perform better every day--to launch my second startup.
Some days, when having the new team working out of my house gets to be too much, or when I want to explode over the idiotic nature of Citibank's online wire transfer procedures (double authentication that cannot be done through a cell phone), I miss the creature comforts and security of a large company.
Luckily, those days are few and far between. The scrappiness and agility of a small company makes this the best experience of my life. But every day I go against the grain of the so-called "disruptors." While everyone has become obsessed with the lean startup, the idea that gigantic companies are somehow doing something wrong by being so large, I've learned to reflect and understand what big companies do right.
Contrary to popular belief, there are plenty of things that a small company can learn from what the big boys are up to. Here are the three of the most important ones.
The last department that every startup integrates is Human Resources, if only because it seems like the CEO can bring in layers of perks and office goofiness to make up for it. (Indeed, I never want to have an HR function--"People Operations," the term Google uses, is way better.) The culture of "crushing it" has led to the idea that you have to work on your startup all the time. While it's undoubtedly true that people go into a startup knowing that they will work a lot more hours than at a large company, if you invest every waking second you end up not being effective.
Yes, many large companies work people to the bone, but there are specific work and vacation hours. You have an office. You work. You leave. The office is the office, the company is their company. When it's a startup and you are an early employee, that line becomes blurred--it's so much more about personality and personal investment. However, it's hard to be creative and passionate when you are overtired and overworked. That's why I have an under-60-hour-a-week policy for my team. A startup is about people, and destroying someone's personal life in the process will harm the startup.
Comprehensive Employee Review
Many people will roll their eyes at the idea that employee reviews are necessary. But they are, in any company, of any size. When you work for someone, or they work for you, you should know what they think and understand it. Reviews allow employees to improve in areas where they need it. Creating a review process that helps ensure that employees get real-time feedback is something small companies can take from large companies. For example, digital design studio owner Greg Hoy created a 360-degree peer feedback evaluation as part of his fledgling company, but left himself out. When he let himself get reviewed, his employees tore into him.
The natural reaction to any criticism can be (as Hoy experienced) anger, depression, anxiety and other maladaptive psychological conditions. The truth hurts. But the truth that comes out in reviews can improve a company--even a startup with only a few people.
Clear Results, Objectives and Timelines
Conventional wisdom is that startups are built with a lack of strategy--something people associate with the "agility" that means that anything can change or be fixed at any time. They see a corporate goal system as stodgy and antiquated; the idea that someone should directly map out their journey is silly, because startups can change a great deal.
The truth is that long-term strategy with clear objectives and milestones is necessary and actually relieving. Living life as a reactive businessperson results is a guaranteed ulcer.
At Google I saw this in action with Objectives and Key Results (OKRs), a methodology that the company has perfected and lives every day. Google focuses on incredibly specific dimensions and goals to complete a particular task, large or small. It seems exhaustive (and exhausting) to write down everything you are planning to do instead of spending time doing it, but it also allows for the consistent monitoring of the way in which a company is built. Are specific people or specific parts of the company regularly missing goals? Using task management systems like Asana, you can accurately measure these elements. Data entry is dull, but necessary at times to build real, lasting structure and a base from which a company can grow.
True, overreliance on data entry can stifle creativity and innovation. I've seen almost every system known to man that requires you to log calls, tasks, and ideas, and I agree that many need to be tightened up. However, if done right, systems like OKRs can be incredibly effective at clarifying goals, making sure that everyone is transparent and knows what others are doing. I created a specific OKR system not so that I can be the panopticon of the company, but so that everybody--including myself--is held accountable for his or her actions and can understand what is going on.
That, in fact, is one of the greatest advantages of the startup. A gargantuan company like Google could never adapt a completely transparent system. Nobody at the entry level needs to know what Sergei Brin is up to. However, in a company of 5, 10, or 15 people, that level of transparency can build a backbone of education and trust.
We can all melodramatically claim that startups are the best businesses, and that nothing the big companies do is worth our time, but they're large for a reason. They have systems that work. Instead of arguing that you want to "disrupt" them, find a way to do some of the things they do--in every way--and understand what has made them a success. That's the way to greatness.