Why Enterprise Thinking Can Benefit Startups
I received a lot of great feedback from my recent article explaining what leaders at enterprise companies can learn from startups.
The article sparked a fantastic question that I’d love to address: “What can startups learn from established companies?” The answer is: A LOT. After all, thinking about my own company, Northwestern Mutual is a 160+ years-old company with over four million clients that’s well-known for its exceptional financial strength, proven financial products, intelligent advisors and strong results. Let me share just a few thoughts of how today’s incumbents can be a great model for the disruptors.
Taking the Long-Term View
Startups often practice the motto of, “Move fast and break things.” That can be useful when you are experimenting and don’t have to support a highly-regulated business that is entrusted with billions of dollars, and where failing is not an option.
Established companies, on the other hand, tend to take a longer-term view; they put greater emphasis on their “long game” rather than just shooting for short-term wins. This has a number of advantages – most notably, being able to always choose the right thing for clients, valuing lasting relationships over “transactional” ones, and helping to provide outstanding value and service over time without getting derailed by short-term financial pressures. This ultimately leads to greater market confidence and stronger overall financial health.
Security and Compliance Mindset
I have seen fast-moving startups over-rotating on delivery to the detriment of developing a sustainable security mindset. Building a culture of security and compliance is not an optional to-do or part of a two-week sprint – it is a mindset that requires a continued, concerted effort and should be prioritized and part of any product development cycle. These values should permeate everywhere and guide everything the company does.
Building a lasting and successful business requires years of grit and focused effort on establishing and maturing strong operational practices, including training and onboarding talent, investing in knowledge platforms, building awareness and discipline around risk and compliance, and having well-documented and repeatable technical and business processes.
To get there, you have to move away from the culture of heroics so popular in the startup model (valuing delivery above all). Instead, move towards a culture of sustainability and long-term thinking. To build something that lasts and is revenue-generating in a sustainable manner, you can’t take shortcuts. Sometimes you have to slow down in order to speed up.
High Scalability from the Outset
The approach you take to building technology, architecting robust systems and solving complex tech problems will look vastly different if you’re at an earlier stage startup versus a mature enterprise organization. Often, the difference comes down to scale.
Typically, startups don’t operate on a large level; it’s more likely they start small and scale as their business grows. On the flip side, enterprises have scalability front-of-mind from the very start. Personally, I find building systems designed to maintain effective performance (during or after a steep increase in workload) is an incredibly exciting technical problem to solve for. Thinking through such interesting technical issues – like optimizing for speed code, designing systems with scaling up and out in mind, asynchronous processing, concurrent access, and many others – are great opportunities to take your technical and architecture skills to the next level.
The best of both worlds
As I mentioned in my previous article, you can learn a lot from both startups and enterprise companies. The goal is to take the best of both worlds to build a unique approach that’s right for your organization. I’d love to hear your perspective and what you’ve learned from both camps.