4 minute read 26 Apr 2018
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Why established players need to rediscover their inner entrepreneur

By

Alison Kay

EY Global Accounts Committee Chair

Working across EY's largest accounts. Advocate for a diverse workforce. Accomplished pianist. Loves to sail.

4 minute read 26 Apr 2018

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Companies of any size can harness the power of an entrepreneurial mindset — and drive to disrupt.

Disruption is here, and it’s moving at a blistering pace. Every industry is being affected, and every business needs to become more innovative and agile.

It can be difficult to imagine the next year — no less than the next decade or century — when we are so firmly planted in the here and now. But, we need to reset our thinking.

How? We need to challenge our assumptions. Consider this:

  • Today’s big fish may not even be in the pond in 11 years. By 2027, it’s estimated that only 25% of today’s S&P companies will exist.
  • Cheap access to powerful technology is leveling the playing field. In the 1990s, mapping the human genome took 13 years and nearly US$3 billion. Today, genetics start-ups can determine from a saliva sample whether you carry genetic variants for diseases such as cystic fibrosis — all for under US$200.

It’s time to shift our thinking. We’re seeing industries change all around us:

  • A shift from manufacturing cars to enabling mobility in the automotive sector
  • Tremendous investor interest in FinTech start-ups, which often cherry-pick part of the banking value chain
  • The impact of smart technologies at a time of greater investment in distributed generation in the power and utilities sector
  • The rise of mobile apps and wearables in health care, not to mention the potential of surgical robots

Getting a whiff of that entrepreneurial spirit

While it may be tempting for incumbents to circle the wagons and hope disruptors go to play in someone else’s industry, don’t. You can — and should — disrupt yourself first.

Think about what entrepreneurs do well. They look at the world with fresh eyes. They think about what’s possible. They put themselves in the shoes of the customer and ask — what would make my life better?

Then they do something about it. Quickly.

Asking better questions

So how can big companies, some of which move at a glacial speed, become more entrepreneurial?

The starting point is to free a group of people from operational constraints, from the “tyranny of the urgent.” Make their job — their only job — to challenge assumptions. This is not about doing your current business better. This is not about tweaks. It’s about rethinking your purpose.

Free people from worries about financial forecasts, about whether what they dream up will cannibalize your current business. Free them to ask fundamental questions, such as:

  1. What business are we in?
  2. What is our purpose?
  3. Who are our customers?
  4. Who are our competitors?

The most important thing is to rekindle curiosity. Give your disruptors the space to experiment and to fail without fear of losing their jobs. Set expectations from the beginning about the cycle times needed, so they are comfortable with piloting ideas, ruthlessly pruning ideas that don’t work and accelerating those that do.

Person getting a tattoo

The ‘how to’ of self-disruption

So how do you set up your group of disruptors? There are many models. Every company will need to approach it differently, depending on its risk appetite for risk, leadership priorities and culture. But with a strong vision from the top, and a willingness to embrace the upside of disruption, even the biggest monoliths can turn themselves around.

There are three models that seem to be gaining traction in the market.

1. Incubate on the inside

Many companies are setting up their own corporate innovation lab, either with a distinct group of employees who work on innovation full-time or a set of internal events such as hackathons or "codefests," to encourage collaboration and innovation. The point is to liberate unconventional thinkers from their day jobs.

2. Bring in the outside

Some companies find bringing in innovators and experts from the outside faster and cheaper than developing the expertise themselves. Examples of this include advisory boards with diverse leaders, alliances with third parties, or direct collaborations with start-ups or entrepreneurs.

Health care is an example of a sector embracing alliances: in one study, over half the health care organizations surveyed were in digital partnerships and found them an effective way to strengthen their mobile, data, cloud computing and other capabilities. Other companies are setting up advisory boards to bring in the expertise in innovation or other skills they lack.

3. Co-create

A number of organizations are getting great results from bringing together their whole ecosystem to develop, challenge, nurture and test ideas. By involving innovators, academics, researchers, students, customers and entrepreneurs, development cycles can be radically reduced and new products and services can be piloted before millions are invested.

Acting like an entrepreneur

You don’t have to be an entrepreneur or a company made up of five people working out of a basement to be a disruptor. Big companies can be disruptors too. It’s not easy, and strong leadership from the top is essential, along with cultural change that embraces curiosity, experimentation and ability. Leading businesses are proving this can be done.

As you think about the future, don’t compare your company with the rest of your sector — disruption has made that irrelevant. Don’t compare yourself with existing businesses — think bigger. Think about what is possible because of disruption.

And start by disrupting yourself.

Summary

To survive disruption, you must disrupt yourself. And that takes curiosity, imagination, experimentation — and courage from leaders.

About this article

By

Alison Kay

EY Global Accounts Committee Chair

Working across EY's largest accounts. Advocate for a diverse workforce. Accomplished pianist. Loves to sail.