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Why Big Companies Fail at Acting Like Start-Ups

How to Save Top Corporations from
Themselves
By Marc Dresner, IIR
It's well known that the average
lifespan of major corporations has been declining at an alarming rate.
In fact, in 2012, Innosight'the innovation
consultancy co-founded
by Clay Christensen'published a report estimating that at the current rate
of churn, 75% of the S&P
500 just over a decade from now will be companies we've probably never heard of
.
Little
wonder, then, that many of the world's biggest and oldest companies have been scrambling
to emulate the start-ups potentially poised to supplant them.
Steve Blank

Anecdotally,
we also know that most such efforts aren't meeting expectations, primarily because
these big, successful corporations can't seem to get out of their own way.

That's according to Steve Blank'Silicon Valley serial
entrepreneur and co-author of 'The Startup Owner's Manual''who says what has made great corporations great may today
be their greatest liability.
'The 'Jack Welch
rules' no longer work.'
'The 'Jack Welch rules' no longer work in the 21st
Century,' Blank told me in an interview.
'Everything we knew about corporate innovation has been
disrupted,' he added. 'The challenge of innovation in the 21st Century
has a whole set of issues that the old business school books or even the current
ones don't even begin to describe.'
'Companies
dealing with continuous disruption need continuous innovation. Not innovation
by exception, but innovation by design.'
'Companies dealing with continuous disruption need
continuous innovation,' Blank emphasized. 'Not innovation by exception, but
innovation by design.'
'The good news is that we are just beginning to understand
how. The bad news is that we are just beginning to understand how,' he noted.
Blank'whose Customer
Development Methodology is credited with igniting the Lean Start-Up movement
popularized by his most famous pupil, Eric Ries'says the problem is that the
competencies necessary to behave like a start-up run counter to the cultures of most
large, successful corporations.
'Large companies are masters of pristine execution with
efficiency,' said Blank. 'But innovation requires very different processes and
procedures and incentives than execution.'

'Cultural issues
around execution really make it easy to strangle innovation.'
'Cultural issues around execution really make it easy to
strangle innovation on day one via the existing processes,' he said.
Big companies have somewhat embraced this idea, hence the
proliferation of skunkworks and other initiatives designed to run independent
from and parallel to their existing operations.
So why do these efforts continue to fall flat?
In this podcast for Forward Focus'FEI's special interview series'Steve
Blank discusses why so many attempts to act like start-ups fail and what companies need to do differently to achieve a state of continuous innovation in an era of continuous disruption.

Editor's note: Steve
Blank will be delivering the keynote, 'Dealing with Disruptive Innovation,' at the
13th Annual Front End of Innovation taking place May 18-20 in Boston.

For more
information or to register for FEI 2015, please visit www.frontendofinnovation.com
Ps. REGISTER TODAY with code FEI15BL and SAVE $100!



ABOUT THE AUTHOR
Marc Dresner is IIR USA's sr. editor and special communication project lead. He is the former executive editor of Research Business Report, a publication for market research and consumer insights professionals. He may be reached at mdresner@iirusa.com. Follow him @mdrezz.

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