The leadership in large organisations is taking learnings from start-ups and India Inc which will go a long way in making the organisation more agile and more open to change.

Large corporations, regardless of the industry, look pretty similar. They are structured, process- oriented, low on flexibility and more traditional in their approach. On the other hand, a start-up is an early stage venture that is in search of a profitable business model—one that can be scaled up rapidly with increasing demand for the product. Unlike large organisations where the workforce runs into thousands, and are organised into a well-defined hierarchical structure, a start-up is characterised with a small set of likeminded individuals with relatively no hierarchy.

Today, with the changing environment, what is debated in most forums is:

•  Can the start-up mindset be adopted by large and established organisations?

•  Can they innovate, shake things up, and be nimble like the best start-ups?

The pandemic has taught all of us many lessons and one of the key lessons is being more agile and open to change. Large corporations, which did not have the flexibility to pivot like start-ups, are now changing. The leadership in large organisations is taking learnings from start-ups and India Inc which will go a long way in making the organisation more agile and more open to change.

Looking at newer ways

Sometimes, while looking to pivot or adapt to new ways or working, the management of a successful organisation may wonder whether they should pursue a start-up philosophy, especially when the organisation is already profitable with a well-established and successful revenue stream. Given the volatile and unpredictable environment, it will be short-sighted not to look at learnings from start-ups. The current environment, while being fraught with challenges, is the best time to experiment with newer ideas and develop an innovative thinking culture within the organisation.

For any organisation, large or small, the key to making any organisational change depends on the culture. While most organisations will have a set of micro-cultures existing in different teams, the styles will vary based on the leadership, the employees, the environment, and a large number of factors. The four styles defined by Kim Cameron and Robert Quinn from the University of Michigan are some of the most popular.

They are:–

• Clan

• Adhocracy

• Hierarchy

• Market

Every organisation, so the theory goes, has its own particular combination.

Clan Culture

A culture found in many small businesses, start-ups, and family-run organisations, the Clan culture has an inward focus. It nurtures those who work within the company and emphasises interpersonal relationships, communication, and collaboration.

This style results in strong, tight-knit teams which work in a family like atmosphere. Members share knowledge, and leaders readily turn to their people for feedback and ideas. This style promotes and embraces change often found in start-ups. This culture promotes loyalty and a set of happy, engaged employees who feel valued, supported, and respected. However, as the organisation grows, this horizontal structure can cause limitations as it lacks the strong, decisive leadership needed to drive the business forward and provide a clear direction.

Adhocracy Culture

This is a culture that runs on adrenaline and thrives on disrupting the status quo. This style is defined by its eagerness to take risks. An Adhocracy culture prizes innovation and initiative and rides the waves of change with confidence. It also fails fast and learns from mistakes quickly to make the necessary changes next time. This is the type of culture found in technology companies, especially those which display entrepreneurship, dynamism, and vision. This style rewards confidence, creativity, and is future-focussed. While this style can be motivating, the individualistic approach can result in a lot of unnecessary competition in the workplace.

Market Culture

This is the most aggressive of the organisational culture types. Here the workplace is driven by targets, deadlines, and the need to get results, with a performance that is closely monitored. Clan and Adhocracy cultures embrace flexibility, but Market culture needs stability to function, making it a common feature in bigger and long-established companies. It promotes a workplace that encourages ongoing professional learning and development. However, being constantly pushed to achieve in a highly competitive environment affect productivity and morale, and thereby, can have a damaging effect on the bottom line.

Hierarchy Culture

This style is one with formality, with leaders at the top and an established chain of command. In essence, it is the traditional corporate structure. There is clarity of roles and responsibilities and results in efficiency, coordination, and organisation. Unlike the risk-taking Adhocracy culture, this model is all about policy, planning, process, and precision. The structure creates a sense of security and lays out a clear path for promotion – and the increased status and influence that comes with it. This can be very motivating for employees but also can result in rigidity. Multiple layers of management can also mean higher costs to the business, putting pressure on budgets spreading financial incentives being more thinly across the rest of the organisation.

Large organisations are usually characterised by either a Market or Hierarchy culture. Employees respond to the culture in which they exist and often comply with the culture of the organisation even if they believe otherwise. Changing culture is not easy. Leaders can influence a change in culture and slowly nudge the change in the desired direction.

Identifying the culture of your organisation is the first step.

• What are its strengths and weaknesses?

• Is it keeping pace with changes in the marketplace and the external world?

With the need for remote working, the demand for flexibility from the workforce and the VUCA environment, the time is now for large organisations to take on some aspects of the Clan and Adhocracy culture. It is not possible for large organisations to make an immediate pivot in style, however, there must be a sincere effort to identify which elements of the different organisational culture types are the best fit for your vision.

A change in course

Massive organisations are sometimes slowed by a bureaucracy of their own making. They typically spend crores of rupees to pursue a business goal. Changing course, then, is a huge decision in another direction. Innovation requires large corporations to integrate new products with legacy systems and processes as well as develop the skillsets within the workforce to support the change. Pivoting costs money and time.

A large automotive company that had an established set of products and was very profitable, decided to invest in a different line of business. The company had an evolved business model with many years of experience in the automotive space in India. Based on their innovative practices, customer insights and market understanding, they invested in a new line of business. This required a complete change in the way the company operated. The employee mindsets needed to shift to deliver results in the new line of business.

The operational excellence that the company was known for had to change to a different standard and become more flexible and responsive. In short, they had to bring a start-up culture into the large conglomerate that they were. A forward-thinking leadership team made a success of this experiment!

A motivated leadership

Leadership who tackle challenges head-on, who stay motivated when the going gets tough, who see feedback as constructive are the key to an organisation poised to tackle change. They are more engaged at work, dedicated to their personal success and the success of the organisation. A growth mindset and its benefits of engagement, tenacity, and creative problem solving are something you can cultivate in your existing employees.

It is important to define what we mean by ‘start-upyness’ or a start-up mindset.

• Do we mean only people who have previously worked at start-ups? or

• All people who are willing to move fast, fail, and learn from it?

The start-up mentality focuses on agile strategies that were typically fostered in small companies and adapted into a way of doing business. Depending on how the culture of the organisation has nurtured the workforce, even a Market or Hierarchy style can move to a Clan or Adhocracy culture in a finite period of time.

In any company, the organisational culture would comprise the firm’s basic personality or the essence of how its employees communicate and carry out various processes required to achieve collective goals. It is, nevertheless, an enigmatically complicated entity that keeps surviving and evolving as a result of shifts in leadership, strategy, and several other factors. It usually determines how things are done in an organisation.

In one of the organisations that I worked in, in the initial stages when the organisation was in the “start-up” mode, the clan culture was clearly prevalent in both locations where we had offices. As the business increased and the employee headcount and complexity grew, the culture shifted to Adhocracy style with shades of the Hierarchy culture in one line of business which had a large workforce. However, the Clan culture continued at all times with the founding team and continues today. So yes, large organisations can retain a start-up mindset, they can innovate, shake things up, and be nimble like the best start-ups. However, this requires conscious investment from the leadership.