Why are startups so attractive and why do so many of them fail? Why do multinationals continue to expand yet find it a challenge to attract and retain the best talent? The answers to these questions may be found in lessons each can learn from the other.
Let’s start with startups. The author of Drive, Daniel Pink, would argue these young companies offer three key elements of motivation that help them attract talent.
First, startups offer autonomy. With few resources everyone has a key role and a divide-and-conquer mentality. People enjoy the ability to set their own plan and work it. They are clear on their individual scope and they enjoy it.
Second, start-ups offer a great opportunity for mastery. People love to learn new things and experience increased confidence as they improve in new areas.
Third, start-ups often begin with a strong sense of mission. Early employees are attracted to the thought of being part of something bigger than them.
In my experience, too many large companies miss the opportunity to focus on these important attributes. However, larger companies could keep these elements if they remained committed to decentralization wherever possible, continual employee education and training, and a focus on objectives beyond an all-consuming attention to the bottom line.
So where do the lessons go the other way? In my experience there are at least three areas where well-run multinationals have something to offer start-ups.
First, strong multinationals can handle complexity. While change is a constant everywhere, the ability to stay responsive to massive change is a learned behavior and requires a healthy dose of discipline.
Next, strong multinationals are excellent at planning and adjusting. They develop detailed plans with associated dashboards of metrics and measures, including leading indicators to let them know when plans need to be adjusted.
Finally, strong multinationals utilize a well-understood set of values that are consistently communicated to unify their workforce.
In my experience, start-ups can learn from these practices even though it is common to eschew anything that looks too “corporate.” However, startups could benefit if they remained committed to regularly scheduled planning sessions, accountability reviews, dashboards (with leading indicators), and an agreed-to set of values available for everyone to see.
Both the best startups and multinationals excel when they share a practice of encouraging leadership at all levels. By swapping these best practices, each could be more successful.