Large businesses aren’t having it easy in the modern era. With technological change overturning the economy, big business needs to shake up its M.O. or it will be in for a rough day of reckoning.
The average lifespan of a S&P 500 company is just 18 years, and 87% of the Fortune 500 firms that existed in 1955 have now gone the way of the dinosaur. Unfortunately, most large businesses don’t focus enough on innovating their product and instead focus on “milking the cash cow” that made them rich in the first place.
This milk-the-cow strategy worked a few decade ago just fine, but these days the climate is getting warmer, the ocean is rising, and the king of the jungle could easily be overthrown when the next startup with a better idea comes along.
However, I’ve recently been reading Brant Cooper, NYT bestselling author of The Lean Entrepreneur and CEO and co-founder of Moves the Needle, and I’ve come to the conclusion that not all is lost for the big business behemoth. While startups have a natural inclination toward the innovation mindset, Cooper has convinced me that big business can replicate the key features that make them capable of successful adaptation.
Here are a few of Cooper’s ideas about what big businesses can do with their employees to create an innovation mindset:
The stringent hierarchy that governs your corporations can be like self-imposed stranglehold that suffocates good ideas and innovative thinking. You need to recognize and empower good ideas no matter who comes up with them — even it’s the janitor.
To create an environment conducive to innovation, corporations must make employee empowerment into the cornerstone of their operation. By providing your employees with autonomy and accountability will motivate them to make positive contributions.
Educate the workforce
If your big business is like most companies of your size, everyone from new employees up to the C-suite executives have no idea what the other departments are doing. You need to create a cohesive culture so that employees know and appreciate what their peers are working on.
Therefore it’s important you educate your employees on the big picture. After they have a grasp of the whole company’s operations, encourage them to put new ideas into action. This requires changing the employee mindset. The best way to do that is through education.
Reform the system
Without mechanisms to encourage the rise of good ideas, they can easily get choked up in management bottlenecks and will never see their time of day. Employees trapped in organizations that don’t have systems in place to recognize and implement their good ideas will become frustrated and despondent.
As an example, Fortune 100 insurance company Humana has successfully put systems in place that enable entrepreneurial action. After educating their employees on how to build an innovative mindset, they were able to enable new ideas their employees came up with in a short timespan.
Humana created an environment that channelled their employees’ newfound entrepreneurial spirit and were able to create massive value for the company. Within their first year they already created $10 million in new value for the organization through running experiments on ways to improve customer service.
The truth is, big businesses don’t have to be left behind. While making changes to create an environment where employees are empowered as entrepreneurs isn’t the easiest the path, the rewards will pay off in the long run through better ideas that keep the company moving forward, ready to face whatever the future may hold.