Big companies have a daunting task. Not only do they have to feed more people but they have to grow faster than their competitors or risk declining market share and stock prices. The startup has none of these worries yet most people are afraid to join a startup because maybe Intel, Microsoft, Google or whomever will crush them. This is completely unfounded. Sure, these big companies have more people, more resources and can afford a loss for a while but they have something that no good startup has — corporate inertia.
The Achilles Heal of Big Companies
Corporate inertia takes many forms. It may be the 10 levels of approval a Purchase Order needs or the HR process that makes a candidate wait 4 weeks just for an interview or maybe it’s all those senior level managers that keep fighting for more money and people. All of these are barriers to changing the status quo and they take an enormous amount of energy, talent and desire to overcome. That’s precisely why a start-up can take advantage of corporate inertia and crush a big company. Corporate inertia is one of the most powerful barriers to big company success but it can also creep into medium or even small companies. Recognizing the build up of corporate inertia is vital to staying nimble and ready for the next big idea or competitor. Consider some of the signs of creeping corporate inertia that might even pop up at your startup:
Too flat an organization: When an organization has too flat a structure, it not efficient since all decisions go through a small set of managers. This overburdens management and makes everything crawl to a halt.
Too structured an organization: The more layers, the more corporate inertia takes hold. Given the reality of the first issue, it’s a challenge to find the right balance of structure and flatness.
Burdensome capital approval process: If it takes an act of God to buy anything below $50k, then the penny pinchers have taken over and don’t really trust people to make the right decision.
Style over substance: Anytime substance takes the back seat to style, you know that corporate inertia is taking hold. Style over substance is a classic stalling tactic that corporate inertia creates to wield power and influence.
Second guessing every decision: Buyers remorse or decision hand wringing even small decisions just enhances the inertia. If the organization can’t make a decision without a committee or meeting, then it’s time to seriously change things.
”That’s not the way we do it” attitude: So this is the classic sign that corporate inertia has fully taken hold. This attitude is a complete stall tactic that no startup would ever do. Once you close yourself off to new ideas, the bureaucrats win.
Low employee autonomy: If every decision needs to go through a boss or is seconded guessed, then that’s a situation that will just build slow decisions down to a crawl.
Meeting after meeting after meeting: Most meetings are unproductive, wastes of time. The more meetings scheduled or attended, the more corporate inertia is present.
Lack of focus: Too many things going on will distract decision makes away from what’s important. Usually, too many projects suggests that the confidence in the overall company direction is lacking.
Only going after the big wins: Big wins rarely happen. Most accomplishments happen incrementally. If all management cares about is the big win, then the corporate inertia towards constant improvement will struggle to take hold. This is bad since constant improvement makes lasting improvement.
The Roots of Corporate Inertia
Like anything worth doing, the reduction of corporate inertia takes a lot of energy, time and commitment. Kinda seems counterintuitive to the whole “do more with less” or nimble company that most companies aspire too. In order to reduce all this corporate inertia, one must find the source. The prime generator of more policies, procedures, training, retreats, automated systems and yes, more management, can be boiled down to three simple things: Fear, Uncertainty and Doubt. Who you may ask has all this fear, uncertainty and doubt — management of course!
Fear of Being Blamed
As an organization grows, so does the problem of not knowing what is going on. This fear drives corporations to put in procedure after procedure to cover themselves from any and all issues. This burden slows down the corporate machine simply because getting anything done requires someone to carry this additional burden. A startup really has none of these burdens because of the type of talent they recruit, the size of the organization and the inherent risk of failure.
Uncertain Management Can Trust People
Management hates surprises. Couple this with the perceived 5x effect that bad news has over good news and you get managers that distrust others. So, it’s no surprise that the number of hoops one must jump through to get something important approved — be it a new hire or a piece of capital equipment — is so intense. The simple fact is that managers are afraid of being too trusting because the downside outweighs the upside. This type of environment actually self perpetuates the more managers and layers of bureaucracy a company puts in place. The startup does not have this problem because you have to trust that your people will get the job done — there is simply too much to do to not.
Doubt About Ones Direction
Management fears the unknown. Corporate management is terrified of it. That’s why, probably every 2-3 years, corporations “restructure” to align for maximum productivity. These restructuring are a complete and utter waste of time, money, resources and political capital. They rarely, if ever, work and only seem to shift the corporate inertia to yet another reporting structure everyone has to learn. Startups don’t have this problem. There is usually one and only one startup structure and it focuses on a single goal — ship the product. For the startup, there is no other important nor pressing problem then shipping for revenue. In a company full of inertia, it seems that the single biggest goal is to please the bureaucracy.
Reducing Corporate Inertia
We have touched a little bit on some of the main creators of corporate inertia and I’m sure you can gather some of the ways to reduce or eliminate it. One thing I should mention before we dig into reducing or even eliminating corporate inertia — it’s hard. In fact, it’s probably the single hardest thing for any company to deal with once they start to grow over a dozen people. Just image the struggle it will be with a 100 person, 1,000 person or 10,000 person company. Fear not. There are various ways of reducing corporate inertia that occur at all levels in an organization. The most successful crushers of corporate inertia take an incremental and choose their battles simply because it’s a lot to tackle for one person. With that, lets explore some of the ways to reduce corporate inertia.
Trust people more: This one is obvious but most companies don’t do this. The reason is simple — they want to catch the few bad apples that take advantage. This attitude is a sure sign that management does not want to change nor understands that with trust must come commitment.
Failure is always an option: Failure makes management mental. Anything that even hints that their grand strategy will fail, produces so many meetings that nothing gets done towards actually making the company successful.
Take your ego out of it: An ego driven management team will want to micro-manage every aspect of the company to the point of paralysis simply because they want to make sure it gets done right.
Reward substance over style: Data driven decisions are the best way to make informed, progress on projects. Doing anything else, will just waste time.
Lead by example: If you want your organization to be nimble, then be nimble. Don’t throw up barriers and then expect others to be efficient..
Challenge widely held assumptions: The biggest part of corporate inertia is the widely held processes that seem to never go away. Look at those processes that add no value and change them if you can.
Help others: The best way to remove corporate inertia is to help others succeed. When you help others achieve, it sets up a more collaborative environment that naturally reduced inertia.
Keep it simple: Anything process that’s so complex that it can’t be explained in 30 minutes, should be redone.
Add process sparingly: The desire to add process to “make things better” is so strong that some companies add so much burden that it makes things worst. Add or change process sparingly since the more process, the higher the corporate inertia.
Empower your employees: Ok, I know this is totally obvious, but hey, people say it but never really follow through. You need to truly trust that your employees will do the right thing and empower them to succeed.
The Corporate Inertia Death Blow
So, all those things above are great and should be done by everyone at every level but they don’t really get at the root. To really crush corporate inertia, it takes the people in charge to make it happen. No other group creates more inertia than senior management. From the countless acquisitions, reorganizations, corporate re-identity, the latest management fad and general paranoia, senior management has to recognize that every time they do anything corporate wide, the nimbleness of their organization dwindles. So all you startups that are nervous about those big companies gunning for you, just remember one thing — corporate inertia is your friend!