ringcentral-team
RingCentral Team
August 29, 2012

What Big Businesses Can Learn From Startups

Startups  are often incubators for creativity and innovation, whereas large corporations can get bogged down by bureaucracy, hierarchy and inefficient processes that stifle innovation. That’s why some large companies are mimicking certain aspects of startup culture, such as forming small divisions within the organization that are more nimble, flexible and innovative. As this recent Harvard Business Review article asserts, “we are entering a new era of innovation” in which big companies are nurturing “entrepreneurial” employees to spur innovation.

There are many startup best practices that any large company can emulate to revive the spirit of innovation. Check out our examples below, and please add your own startup lessons worthy of emulation.

Startups Have Flat Organizations
Organizational hierarchy and bureaucracy stifle creativity. Employee ideas get diluted as they goes up the chain of command or, worse yet, employees are unmotivated to communicate ideas. At startups, founders and staff work closely together, collaborating on everything from strategy to culture. Such close executive-employee collaboration may not be realistic for large companies; however, a process can be implemented that delegates leadership to strong performers in different groups or departments. These leaders should feel empowered to voice ideas to management.

Startups Take Risks
Startups typically seek to provide a product or service that is different, new and thus unknown. This is inherently risky yet clearly doesn’t inhibit entrepreneurs from coming up with novel ideas every day. As American entrepreneur Jim Rohn once said, “If you are not willing to risk the unusual, you will have to settle for the ordinary.” And no thriving company should be settling for just the ordinary!

As companies become more well-established, the tolerance for risk diminishes — and understandably in certain cases, like with public companies who must strive to keep shareholders happy. But it’s possible to establish a company culture of encouraging and celebrating risk-taking in “controlled” instances, such as creating a “think-tank” group whose job is to explore new ideas. For example, according to Stanford professor and author Tina Seelig, Google allocates 20% of its resources toward “experiments related to the core business” and 10% toward “wild ideas that will play out over a long time horizon.”

Apple is another company with a well-known culture of innovation.  Apple’s “Think Different” was not only an important advertising campaign but a motto for the company culture, according to author Walter Isaacson. In other words, embrace the innovation spirit in all facets of the business, from the internal to the external message.

Startups Are Stimulated by Constraints
Unlike well-established businesses, startups don’t have the luxury of time, resources, and money. Entrepreneurs use their intuition to make fast decisions rather than relying on expensive research, processes, and executive approval. Don’t get us wrong — we’re not suggesting that businesses should start making impulsive decisions. But to a certain extent, constraints give birth to creative thinking — a notion corroborated by plenty of researchers, according to Professor Seelig, whose book inGenius cites studies demonstrating that high pressure leads to high creativity.

Shawn Parr, CEO of design and innovation consultancy Bulldog Drummond, suggests that big companies “set tight deadlines that create pressure,” free employees from typical processes, and remind everyone to suspend judgement when brainstorming ideas.

Startups Have Fun Workspaces

One of the chief hallmarks of startups is a creative workspace — colorful furniture, game tables, and an ergonomic office layout.  A fun environment is not only great for employee morale, it also increases productivity. According to this study, office design has a “substantial impact” on worker productivity. Get an inside look at RingCentral’s workspace, which we designed for maximum creativity and collaboration. Realize that you don’t necessarily need a complete re-design to improve your workspace. It may be as simple as adding a few beanbags around a low communal table, painting some walls an unexpected color, and erecting a ping pong table. For more office space design ideas, check out our Pinterest board.