Mark Zuckerberg is famous for coining the term, "move fast and break things" when referencing the methodology Facebook used in its early days to achieve monstrous growth. “Moving fast” was in reference to how Facebook product teams worked, often rapid prototyping features to get them to market quickly. “Breaking things” was synonymous with dismissing the need to calculate risk. While this mantra was in practice, things broke all the time. But Facebook also had a lot fewer users than it has today, so the only real risk Facebook saw was being late to market in a highly competitive landscape.
It is easy to understand how this phrase has come to embody the startup mentality, especially in a company’s early stage. Because of shoestring budgets, minimal staff and a hefty appetite for growth, startups have a much higher risk tolerance than large, enterprise organizations. It's a concept fueling an era that has yielded virtually millions of companies who narrow their focus to exploit industry gaps across every imaginable vertical. This allows them to move faster, pivot as needed and more importantly, realize much quicker innovation cycles and ultimately growth.
But this philosophy doesn’t have to be reserved for the small tech startup. While innovation and growth are a byproduct of both this practice and pace of business; as these startup companies grow over time, stability becomes much more important. Because agility and iteration are at the core of their business foundation, they have a much easier time balancing risk with stability and continuing innovation at a pace well beyond those outside of their pedigree.
In turn, this practice has allowed the global business economy quicker innovation cycles. Historically, change has come on a decade-by-decade cadence, but in the past 20 years, innovation has come at an accelerated rate and for some industries, it is happening on almost a bi-yearly cadence. A good indicator of this evolution is to look back at the history of the Fortune 500 and the transformation that has taken place for both businesses and entire industries.
In 1955, the term Fortune 500 was created by Forbes editor Edgar P. Smith as a list ranking measure for the 500 largest public and private companies in the United States using publicly available revenue data. To be on the list, a company had to produce at least $49.7 million in annual revenue (this number is much higher today). The original list contained mostly companies that were in manufacturing, mining and energy.
By 1995 over half of this list was made up of service-led companies and today only 52 of the original Fortune 500 remain on the list. The rest have either been acquired, gone bankrupt or have simply failed to meet the revenue required to earn their spot. In many cases, they have failed to innovate or the industry itself innovated beyond the companies servicing them.
Since the inception of the Fortune 500, the pace of business has evolved. For companies of this size, innovation and growth can come at a slower pace (or in an acquisition). These are well-established businesses that have long-tested processes and procedures in place. Strategic changes are carefully planned and take time. Budgets and growth are routinely forecasted and projected over longer periods to protect the current state of business and continuously calculate risk.
Nurturing startup thinking within a large organization isn't easy. But it is possible to integrate startup practices to achieve quicker paths to innovation and growth while maintaining enterprise stability. From my experience working in both environments, here are a few lessons from the startup world that can be integrated into and practiced by teams in larger organizations.
Become a storyteller
One of the most important things in the startup world is the pitch. A good pitch is more than a good story. You must be able to explain your strategy, plan and desired outcome in a concise and compelling manner. Whether it’s presented to your customer or your team, a good pitch evokes empathy and is integral to selling your vision internally, rallying support and distilling your vision and objectives.
If you don’t know how to tell a story, the 3-act structure is a good place to start. Pixar’s story formation process has recently become highly referenced as well. A few years ago, they released their storytelling cookbook to the public which includes 22 rules in storytelling. It’s a lot to absorb, but at the heart of it is rule #4. This one is extremely helpful if you’re new to storytelling.
Change the way you work
Innovation must be driven by a company’s culture. It can’t just be a line item in your company’s vision. Many enterprise companies isolate innovation teams into a siloed practice or business unit, but extending innovation values and vision across business units, levels and roles helps foster teamwork, create competition and ultimately diversify perspectives. The first step is to outline clear objectives, then publicize your company’s initiatives and allocate time or a “budget” for employees to work from.
If you look at the most successful startups, there’s rarely a sole founder. Companies are only as good as their employees, so identify captains that are vertical or industry veterans to act as mentors and encourage teams to seek outside resources. Better yet, build your teams from cross-functional disciplines to help validate perspectives and distribute accountability. Most importantly, it’s grit and determination that make entrepreneurs effective and why others want to join them, so keep that in mind when choosing your “captains.”
Listen to your customers
Perspective is everything. When vying for market fit, it’s a common startup practice to continuously solicit feedback from customers so that they can keep narrowing their focus. Your customers should be the ones to influence your business strategy. If you’re not listening to them then you’re doing it wrong.
Capture feedback whenever possible and be mindful of their time and money. Understand their behaviors and how your product or services fit into their life. Understand their limitations and be growth-minded… for them. If your customer is doing well and you’re helping them get there, then the financial aspect will take care of itself. Focus on the big sale by asking for the small ones. Incremental value can yield long-term relationships which yield long-term rewards.
Fail fast and learn hard
When you only have an idea, it’s easy to walk away. But more often than not, the work or the output of your work is not going to be right every time. You have to know when to pivot and try something else. Iteration is king. Therefore, plan on it. Know that you will need multiple iterations so that the failures are absorbable.
Encourage rapid prototyping and retrospectives so that you learn fast and learn often. Retros should not just be reserved for engineering teams post software release. Make sure learning cycles are part of your work process, regardless of failure or success. It’s important to recap lessons both good and bad so that the next time around you apply what worked as well as avoid what didn’t. If you’re a services company be transparent with your customers and take them through this exercise with you. Success and failure are not one-sided.
While the concept of “move fast and break things” may be more relevant to companies who have less to lose, making mistakes is a natural consequence of innovation in highly competitive markets. It takes a lot to transform a culture in a large organization. Employees need to be empowered and inspired regardless of their role or rank. Applying resources and training in support of the five themes listed above across your teams can help ensure you’re working as one towards innovation and growth.
Who knows, you may be able to change more than your organization while you’re at it — or perhaps an entire industry.