The nice people at Leadership Excellence asked me to explain what large corporations could learn from small ones.
Here's what I told them.
I have been writing about business for nearly 40 years now and here is something I still don't understand: Why is it that the leaders of large companies refuse to learn about innovation from those who do it best--entrepreneurs?
Studying the most successful entrepreneurs would seem like the most natural thing in the world, given all the emphasis the world's biggest companies are placing on innovation.
As you know better than I, it is virtually impossible today to read about a large company without seeing their CEO say "we need to be more innovative and create more product and services faster." Given their very size, large companies struggle with both those objectives. They have streamlined what they could, and partnered where they can, and still they have a hard time being innovative.
They are looking for help, and it simply makes sense for them to learn how organizations that are best at it--the nation's most successful entrepreneurial companies--handle the issue.
When I ask senior executives of the world's largest companies, why they don't have the techniques entrepreneurs use under a microscope at all times, the two most common answers are:
"Given our size, it would be like comparing apples to kumquats." And
"There isn't much to be gained from studying them. Each entrepreneur's behavior is as idiosyncratic as they are."
Neither answer holds water.
True, large companies by definition are bigger than their small competitors. And that size might matter if we were talking about how to set up a worldwide supply chain. But we are not. We are talking about ways to create processes that allow you to move faster, and those processes--as we will see in a minute--are the same whether we are talking about big companies or small.
And as for there is nothing to be learned from studying entrepreneurs behavior, I agree. Each entrepreneur is unique.
But--and it is a huge but--if you look at how they reason, you see remarkable similarities.
The process just about all of them follows in creating their companies looks like this. They:
1. Figure out what they really want to do; what is it that gets them excited. In other words, they get a firm handle on what they want to create.
2. Take a small step toward that goal.
3. Pause after taking that small step to see what they have learned.
4. Build off that learning and take another small step.
5. Pause after taking that step.
6. They build off what they learned from taking that second step and take another small step...
If we were to reduce it to a formula, it would be Act. Learn. Build. Repeat.
In other words, they don't spend a lot of time planning or playing "what if" games. You never truly know how the universe is going to react until you give it something to react to.
So, in the face of an unknown future, entrepreneurs act.
There are three wonderful benefits of taking this approach.
- You can get started right away.
- You don't need a lot of resources
- You can quickly respond to market needs.
As you can see, the best entrepreneurs deal with uncertainty not by trying to analyze it, or preparing for every contingency, or predicting what the outcomes will be. Instead, they: Act; learn from what they find, and then based on that learning act again.
It is an approach we all can use. That's why I called my new book, which deals with how entrepreneurs innovate, Entrepreneurship for the Rest of Us, because whether we are starting a business of our own, or work for a large company the Act Learn Build Repeat model will work for each of us.
The world today is far too competitive for us to avoid any idea that can help us just because "it wasn't invented here."
If you are looking to innovate better and faster, take a look at what your smaller competitors are doing. I guarantee you will learn a lot.