Think Like a Startup, Scale Like an Enterprise: Balancing the Best of Both Worlds

The importance of thinking like a startup

Thinking like a startup means prioritizing innovation. This can come from anywhere at any time. Taking this approach drives growth and helps companies adapt quickly to emerging trends and market changes so they can retain their competitive advantage.

Startups are often more innovative and agile than larger firms. This means they can adapt and be more competitive. Startups also attract creative people who want to work in an environment where their ideas and energy are valued. 

This leads to a workplace culture that is dynamic and inclusive. Having this type of culture will make it easier for your company to attract top employees who proactively contribute to problem solving and product development.

Companies that combine innovation and an agile team approach are more likely to try new things and adopt a “fail fast” culture. By focusing on continual improvement through soliciting and reacting to internal and customer feedback, the aim is to quickly develop products and processes that stay ahead of the curve. This responsiveness leads to higher levels of customer and employee loyalty and satisfaction, which are key to sustaining business success over the long term.

Being innovative also relies on developing an internal company culture of collaboration, where staff are actively engaged in looking for new ways of doing things or coming up with ideas that make things better. By empowering staff in this way, you benefit from greater engagement, which leads to improved productivity and innovation.

Here are some popular methods that companies use to promote innovation.

Hackathons

This combination of “hack” and “marathon” describes a short-but-intense event designed to solve a specific problem. It usually relates to information technology, but the concept is also useful as a collaborative approach from people with different skill sets when a quick solution to a problem is necessary. This strategy can break through organizational inertia and foster a forward-looking culture of innovation. 

An example is MIT’s MIT iQuHACK 2024 (interdisciplinary Quantum HACKathon). This yearly event draws students from diverse backgrounds, from high school through early-career professionals. Its purpose is to explore improvements and applications of quantum devices. 

Idea incubators

Nurturing an idea into being, or incubation, works by starting with a basic idea and bringing in the expertise and experience of others. This approach is also called a “sandbox” — learning through playing and graduating to more serious work. 

The U.K. Financial Conduct Authority Sandbox, for example, provides startup technology companies the chance to learn from others, experiment and scale to get to the proof-of-concept stage. 

Innovation labs

This is a physical space devoted to cultivating, sharing and developing ideas. It’s also a place to encourage a spirit of collaboration and communication and thus help the business as a whole. 

Cisco’s Innovate Everywhere Challenge, launched in 2015, is a great example of an idea incubator. Now called the Innovation Lab, this company-wide, cross-functional innovation competition was designed to mirror real-life startup practices, with employees from all areas and levels encouraged to form teams and pitch their innovative ideas for business process improvements, new digital solutions and more. 

How to encourage startup-like innovation

Here are some ways to encourage team innovation in your business:

• Build better teams. To begin thinking more like a startup, emphasize cross-functional teams, think outside of functions and break down business-unit silos. This will ensure that you tap into the best and brightest ideas. Companies that prioritize diversity and inclusion have an edge, as teams with different backgrounds and perspectives tend to produce the most valuable ideas.
• Communicate clearly. Enable transparent digital communication among teams and stakeholders. This could involve setting up internal communication apps, establishing a mentor network and encouraging anonymous employee feedback.
• Be flexible. Encourage rapid prototyping for solutions, validate concepts with potential customers early, pivot fast and take risks to boost productivity. If an idea doesn’t pan out, empower teams to learn from failures and move on to the next idea.

The importance of scaling like an enterprise

Just as it’s important to think like a startup, scaling like an enterprise is a vital way to ensure your business’s success. Large enterprises embody a core set of strengths, resources and partnerships that can accelerate innovation, including their ability to scale and get products to market quickly.

Other benefits of scaling like an enterprise include achieving operational efficiency by implementing standardized and repeatable workflows. Payroll or inventory management are prime examples. Both rely on data being moved around efficiently to allow for actions at the end of the process: getting paid and managing stock levels. If your data management is poor — for example, if your data cannot travel easily within the IT system — then the end action could be delayed or incorrect, thus slowing the scaling process. 

Operational efficiency also reduces risk, which means a company will find it easier to attract funding. This is because a well-run company is less likely to leak money on poor operations and so is more likely to be successful. Businesses that can demonstrate a higher likelihood of success and profitability are more attractive to investors. 

How to encourage enterprise-like scaling 

Here are some practical ways to encourage enterprise-like scaling in your organization: 

• Establish ecosystems for success. Most successful enterprises actively build their ecosystems by leveraging vertical, horizontal and local partners to ensure their solutions’ scalability, mass customization and reach. They also know how to set their sights on clearly defined, broader goals and understand that innovation is about more than delivering a cool new app or futuristic device.
• Focus on outcomes. Enterprises focus on the business outcomes and the value at stake instead of taking a scattered approach driven by fleeting passions. They have established customers, partners and marketing channels to broaden their innovative ideas’ exposure and credibility.
• Hire high-quality talent. Bringing in skilled and talented people gives you more bang for your buck. Someone who can help engage and motivate team members, as well as strategize and innovate, is a more valuable hire than someone who has specialized experience but lacks imagination and soft skills.
• Create short- and long-term goals. It’s important to focus on both short- and long-term goals. Short-term goals provide energy and motivation, and long-term goals establish the foundation for a company to build out and scale successfully.

How to think like a startup but scale like an enterprise

As you take the best characteristics from successful startups and enterprises, the next step is to ignite a startup culture by engaging and challenging employees to innovate. Here’s how to do that:

1. Open innovation to everyone. Extend innovation programs to all employees across departments, levels and roles. From there, encourage inclusion and diversity of perspectives, and empower employees to make decisions and tap into their inner entrepreneur.
2. Recreate a startup-like environment. As employees innovate, support their ideas with mentor networks, angel investors and other resources that a startup would use. This will help lead your internal innovators through the four phases of a lean startup: ideation, validation, funding and development.
3. Use gamification. Make innovation fun, and introduce rewards, such as discretionary bonuses or time off, as incentives. Additionally, look for opportunities to secure publicity for the innovative ideas or solutions your employees create. Highlighting employees’ accomplishments is extremely rewarding for them. It spurs further engagement and innovation from other employees and can bolster your company’s brand reputation.
4. Appoint an innovation leader. Designate an internal champion to lead your innovation initiatives, and attain buy-in from higher-ups all the way to the C suite. Most importantly, your champion can help you discover existing, untapped talent by engaging as many employees as possible and sharing your programs’ offerings.
5. Customize your approach. One size doesn’t fit all when it comes to innovation, especially for global companies. All stakeholders have different personalities, priorities and passions, and there will always be tension between established and startup practices in a big company. So customize and balance your program’s approach to stimulating employee innovation by blending the startup and large enterprise mindsets. 
6. Use rapid prototyping. Many projects can end up stalling if they lack clearly defined timescales and outcomes. Rapid prototyping can help you quickly test and adjust solutions, as well as identify flaws and areas for improvement. This approach also boosts team resilience, as all ideas, even those later rejected, are encouraged and explored.
7. Organize challenges. Hold regular events, like hackathons, to encourage your employees to come up with solutions to business problems and opportunities within a constrained time frame. This will help to firmly embed a culture of innovation across the business as well as promote intra- and cross-team collaboration.

Compete in an age of disruption

If you combine the best attributes of a startup culture with the scalability of an enterprise, it makes it far less daunting to compete in an age of disruption. The goal is to transform your organization and its culture by empowering and inspiring employees of all roles, ranks and regions to innovate.

Then, provide a wealth of resources, training and incentives while nurturing their innovation to bring big ideas to market. If your employees are free to innovate anytime, anywhere, you’ll improve your entire organization — and you just might change the world while you’re at it. 

Alex Goryachev and Kimberlee Leonard contributed to this article.