IPMA International Project Management Association
3 December 2018 / 9:00

Can start-ups be a good example for large organisations?

Start-ups are trendy, they are attractive for young professionals and they are able to create innovative products and services. This is all what large organisations desire to represent, but typically fail to achieve. Due to its size, number of people, processes, structures and traditional values, large organisations are increasingly perceived to be rigid, unable to adapt to change and to create offerings that are innovative and attractive.

Being under pressure of market developments, large organisations tend to move small teams into a garage kind of setting and ask those teams to work like a start-up and deliver what start-ups are able to do. This may work during the early phase of developing products and services, but at a certain point in time, the “start-up” needs to be re-integrated, products and services need to be integrated into the large organisation´s product and service portfolio and be managed by the existing organisational structures and processes. This is the moment, when the nice idea of using a “start-up” setting typically fails. The line organisation might proof that the new product or service does not work in “normal life”, that cost for production or operation is too high (accounting for all over-head of the line organisation) etc.

Another approach might be to acquire a start-up and integrated it into the existing (large) organisation. This will also be very difficult, as the people used to work in a start-up might be frustrated to work under the regime of a large organisation, including but not limited to the leadership style, the space to manoeuvre, the incentives offered to work etc.

However, why not use start-ups as blueprint for redesigning large organisations, at least in those parts of the organisation that are tasked to be creative and develop new products and services? Nestholma, a venture accelerator powering the collaboration between start-ups and large organisations, for example financial institutions, summarizes the benefits of such a cooperation in a Whitepaper: “The benefits that a corporation can get, when collaboration is done right, fall in three categories. From least to most transformative, the first category

is branding: the corporation creates a good reputation in the market and among its employees. The second category is innovation: together the corporation and the start-up can bring new technologies to the market faster and better. The third category is learning: corporations can create an innovation culture, make their processes more agile, and improve the skills of their employees to prepare them for renewal.”

Another option is to learn from start-ups and adopt some of the principles, approaches and methods they use. One approach is “Lean start-up”, first published by Eric Ries, a methodology for developing products and services, which aim to shorten product development cycles and rapidly discover if a proposed business model is viable. Products are developed through several iterations of “Build-Measure-Learn (BML) Cycles”, achieving a “Minimum Viable Product (MVP)” and avoiding products that are outdated when delivered to markets after a time-consuming sequential development process. Agile methods for product development, such as Design Thinking or Scrum may be fit for purpose, but require a change of the organisation to become agile and give space for a “start-up” kind of endeavour. It means to allow the team to self-organize, to be failure-tolerant, to avoid micro management by top management and to think beyond products and see the value proposition for customers. This radical turn towards “real” customer orientation will be a trigger for the overall organisation to rethink the way it organises and works, it may end up in a change proposition for all functions and units to align to the start-up alike parts and open up for the future set-up.

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Reinhard Wagner

Author of this post

Reinhard Wagner has been active for more than 30 years in the field of project- related leadership, in such diverse sectors as Air Defense, Automotive Engineering, and Machinery, as well as various not-for-profit organizations. As a Certified Projects Director (IPMA Level A), he has proven experience in managing projects, programmes and project portfolios in complex and dynamic contexts. He is also an IPMA Certified Programme and Portfolio Management Consultant, and as such supports senior executives in developing and improving their organizational competence in managing projects. For more than 15 years, he has been actively involved in the development of project, programme and portfolio management standards, for example as Convenor of the ISO 21500 “Guidance on Project Management” and the ISO 21503 “Guidance on Programme Management”. Reinhard Wagner is Past President of IPMA and Chairman of the Council, Honorary Chairman of GPM (the German Project Management Association), as well as Managing Director of Tiba Managementberatung GmbH.